MOHAMMAD SUMAN and JAGARAN CHAKMA

Bangladesh is planning to establish its first free trade zones (FTZs), with the government positioning the initiative as a transformative trade strategy that could slash export lead times, attract foreign suppliers and turn the country into a regional logistics hub.

The Cabinet Committee on Economic Affairs yesterday gave in-principle approval to the establishment of FTZs near the Matarbari deep-sea port in Cox’s Bazar and in Anwara, near Chattogram Port, Cabinet Secretary Md Nasimul Gani said.

According to officials familiar with the matter, the zones will cover around 600 acres. Development of the Anwara zone is expected to begin this year. The Matarbari FTZ is slated for 2030–2033, alongside expansion of the deep-sea port.

Gani said the FTZs are expected to facilitate trade, logistics and manufacturing, attract investment and strengthen Bangladesh’s position as a regional trade hub. He added that the initiative was part of a long-term policy effort.

“This is the most successful (trade zone) model yet,” said Ashik Chowdhury, executive chairman of the Bangladesh Investment Development Authority (Bida). “Nearly 37 percent of Dubai’s trade comes from FTZs. Given our country’s geopolitical position, it has become critical for us.”

Unlike conventional economic zones or export processing zones (EPZs), the proposed FTZs will allow both local and foreign investors to engage in a broader range of trading, logistics and manufacturing activities.

Chowdhury described the FTZ as an “EPZ++” -- a more advanced evolution of the EPZ model introduced in the 1980s. “Global trade has evolved a lot since then. Under the current global trade structure, FTZs give you a very different proposition,” he said, adding that EPZs would continue to operate alongside the new zones.

The core proposition of the FTZ model is that the zones will function outside Bangladesh’s customs territory. Investors can import raw materials and machinery duty-free, undertake value addition and re-export finished goods. Products may also enter the domestic market upon payment of applicable duties.