The Kingdom of Saudi Arabia (KSA) has declined to provide any exemption from customs duties to Bangladeshi products due to a unified customs tariff system of Gulf countries.
Bangladesh requested the Saudi authorities to exempt customs duties on its 130 products during the fourteenth session of the Saudi-Bangladeshi Joint Committee meeting, held in Riyadh on October 30-31.
To this effect, the embassy of KSA in Dhaka has recently conveyed it to the Bangladesh foreign ministry through a note verbale. A note verbale is a diplomatic communication from one government to another, delivered through each other's diplomatic representatives.
The ministry then forwarded the letter to the commerce ministry.
"…the Bangladeshi side participated with 213 products in which requested from the Saudi side to study the possibility of exempting them from customs duties," according to the verbale.
The KSA has been associated with the Gulf Cooperation Council (GCC) countries in a customs union since January 1, 2003.
"Customs duties according to the unified customs tariff of the Council, except for what is exempted under an international agreement within the framework of the Gulf Cooperation Council, and accordingly the Saudi side is unable to provide any exemptions from customs duties," reads the embassy's note verbale.
Bangladesh exported only US$290 million to the KSA in the fiscal year (FY) 2021-22. Of the total volume, around U$ 144 million was RMG shipments, according to the Export Promotion Bureau (EPB) data.
But the actual volume of exports to the Gulf country is higher as a significant amount of export is conducted through informal channels, for instance, cargo or baggage.
KSA is the 24th largest export destination of Bangladesh out of 202 countries, while the Gulf country is also the 26th largest destination for Bangladeshi RMG items.
There is a huge opportunity for Bangladeshi products, including home textiles, agricultural products, leather goods, jute and ceramics, in the KSA.
The government and exporters concerned are sincerely working to explore the untapped market potential in Saudi Arabia as it is an important player in the Gulf region, said exporters.
Bangladesh's export earnings from the KSA can reach $5.0-7.0 billion within the next couple of years if the government takes right initiatives, they observed.
Now, Bangladesh is one of the largest recipients of remittance. And the KSA has been the largest hub of foreign remittance into Bangladesh.
