Bangladesh has taken a policy decision to establish its first-ever Free Trade Zone (FTZ), a move aimed at boosting global trade connectivity, cutting lead times for exporters and strengthening the country’s industrial base.
The decision was announced on Monday after a meeting of the governing board of the Bangladesh Economic Zones Authority (BEZA), chaired by Chief Adviser Professor Muhammad Yunus, at the Chief Adviser’s Office in Tejgaon.
Speaking after the meeting, BEZA Executive Chairman Chowdhury Ashik Mahmud Bin Harun said the proposed FTZ would be located in Anowara, in the port city of Chattogram, covering around 600 to 650 acres of land.
He said Bangladesh currently does not have a free trade zone and described the initiative as a major policy shift. Under the plan, the zone would function as an offshore territory in terms of customs regulations.
“Goods kept in the free trade zone will not be subject to customs duties,” he said. “They can be stored, processed, manufactured or re-exported, as the zone will be treated as technically outside the country’s customs boundary.”
According to Ashik Chowdhury, the main objective of the FTZ is to sharply reduce time-to-market for raw materials, which is crucial for Bangladesh’s export-orientated manufacturing sector.
He cited American cotton as an example, noting that it often takes a long time to reach Bangladesh after orders are placed, making it difficult to meet short production timelines. Under the proposed system, such raw materials could be stored in advance inside the FTZ and accessed immediately by local manufacturers when needed or re-exported to other markets if demand shifts.
He said the concept draws inspiration from global models such as the Jebel Ali Free Zone in Dubai, which he described as a benchmark for offshore trade-led growth.
Ashik Chowdhury noted that the Jebel Ali Free Zone alone handles trade worth around $190 billion and contributes about 36% to Dubai’s gross domestic product, exceeding Bangladesh’s total trade volume. He said Bangladesh aims to replicate aspects of this success to generate offshore trade-driven economic activity.
While the governing board has given its policy-level approval, the proposal will now be sent to the Cabinet for final clearance. Ashik Chowdhury said the initiative would require amendments to existing laws and regulations, a process expected to be carried forward by the next government.
He expressed optimism that an initial milestone for establishing the FTZ could be achieved by the end of 2026.
At the same meeting, BEZA also approved a policy decision to establish a dedicated Defence Industrial Park. Ashik Chowdhury said the park would be located in Mirsarai, using about 80 acres of land.
He explained that the site had previously been earmarked for the Indian Economic Zone, which was later cancelled, making the land available for repurposing. The defence park will now be incorporated into BEZA’s national master plan.
He said the global defence industry is expanding rapidly and that Bangladesh has an opportunity to enter the sector, both economically and strategically. Beyond exports, the park is intended to help secure domestic supply chains for essential military equipment.
Referring to recent global conflicts, he said shortages often arise not in advanced weapons systems but in basic supplies such as ammunition and key components. Developing local manufacturing capacity, he added, is crucial for national security.
Ashik Chowdhury said the proposal was developed through long-term coordination between the Armed Forces Division, BEZA, the Chief Adviser’s Office and the Ministry of Defence. With policy approval now in place, work to include the park in the economic zone master plan will begin immediately.
The BEZA governing board also decided to repurpose the Kushtia Sugar Mill into a full-scale industrial park. Acknowledging that many state-run sugar mills are struggling financially, Ashik Chowdhury said the new plan would transform the Kushtia site into an economic zone under BEZA’s supervision.
He said the initiative would be implemented through coordination with relevant authorities, with the aim of revitalising underutilised industrial assets and creating new economic opportunities.
