Bangladesh drops import duty on guns, artillery

Bangladesh has proposed to lift all import duties on a wide range of military-grade weapons, including guns, howitzers, mortars, torpedoes, rocket launchers, grenade launchers, flame throwers and other artillery systems, as part of its fiscal strategy for 2025–26.

Finance Advisor Salehuddin Ahmed presented the budget proposal on Monday through a televised address on state broadcaster BTV.

All categories of artillery weapons have been included among the 110 products proposed for full customs duty withdrawal.

The existing 5 percent duty on these weapons is to be cut to zero under the proposed measures.

The list includes multiple categories of arms -- such as assault rifles, howitzers (a type of field cannon), mortars, rocket launchers, torpedo tubes, flame throwers, and grenade launchers.

Additional types of weapons, listed separately, are also set for full customs exemption.

The tariff removal is part of a broader concession package involving 626 products linked to Bangladesh’s efforts to rebalance trade with the United States ahead of upcoming trade talks.

"In order to gradually reduce the taxes and duties and as part of preparations for trade dialogue with the United States, it has been proposed to completely withdraw import duties on 110 products and reduce import duties on 65 products," Salehuddin said.

"In addition, supplementary duties on nine products are proposed to be fully withdrawn, while those on 442 products are proposed to be reduced. This will ease the tax burden on citizens and reduce anti-export bias."

Bangladesh has a $6 billion trade surplus with the US-- meaning it exports $6 billion more to the US than it imports.

This imbalance has drawn scrutiny in Washington, particularly under the US administration’s reciprocal tariff policy introduced by President Donald Trump.

Under that policy, the US had announced new tariffs on imports from over 100 countries.

For Bangladesh, this took the form of a proposed 37 percent hike in tariffs on top of the average 15 percent base level.

This meant that Bangladeshi goods entering the US would face up to 52 percent in total duties before hitting the market.

While the US suspended the additional 37 percent duty for three months following a request from the Bangladesh government, an extra 10 percent duty is still being enforced -- in addition to the original 15 percent.

Business leaders fear the higher tariff burden could undercut Bangladesh’s export capacity in the US market, which is the country’s largest destination for garments.

In 2024, Bangladesh exported goods worth nearly $8.4 billion to the US, of which $7.34 billion came from the ready-made garment sector alone.

To avoid long-term damage, Dhaka is now seeking to increase imports from the US as a strategy to narrow the trade gap -- with duty waivers on arms and other items forming part of that plan.