As Bangladesh aspires to become a global manufacturing hub, its outdated customs system is a major stumbling block, business leaders have said, expressing frustration over delays in implementing a government project to modernise three major customs houses.

Despite its approval by the Executive Committee of the National Economic Council (ECNEC) in March 2023, the project to modernise customs houses in Chattogram, Dhaka, and Benapole has seen little progress.

The slow pace of modernisation is hindering the country’s ability to compete with regional rivals and attract foreign investment, the business leaders noted, adding that the absence of automated customs systems results in significant wastage of time and money, misinformation, and logistical challenges when handling raw materials and goods at ports while perpetuating corruption.

Automation or modernisation of customs houses, on the other hand, could save time, provide accurate information, and eliminate the need for physical presence, particularly benefiting sectors like Readymade Garments (RMG), according to them.

They also emphasised that modernising customs houses would simplify export processes, particularly for the RMG sector, facilitating smoother transactions with international buyers.

Moreover, automation is expected to mitigate corruption and bribery incidents during the release of imported goods by ensuring transparency in customs operations.

Project Director of the three major customs house modernisation project AKM Nurul Huda Azad confirmed to the Daily Sun that no tangible progress had been made as of November 2024.

“We are currently calling for tenders to procure modern equipment and develop necessary infrastructure. Japanese and Korean companies have submitted bids. Physical work will commence after the bidding process is complete,” he stated.

The project, estimated to cost Tk1,686.46 crore, is primarily funded by the World Bank, which will provide 87% of the financing.

Once implemented, it is expected to address the challenges posed by Bangladesh’s transition from a Least Developed Country (LDC) in 2026.

A senior NBR official explained that the modernisation would reduce import and export handling times, improve customs efficiency, and enhance revenue generation through a modernised system.

“The project aims to cut import and export clearance times by 25%, increase the number of assessed import and export declarations, and reduce physical inspections,” the official said.

Currently, import clearance at Chattogram port takes around 11 days, while export clearance requires approximately five days. The introduction of e-customs facilities, part of the project, would significantly decrease the need for physical presence at ports, potentially reducing it by 60%. Businesses would be able to track their shipments’ status via automated systems. Additionally, an e-customs system would align Bangladesh with global best practices and enhance its competitiveness in international markets.

Shamim Ehsan, former vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), stressed the critical need for modernisation, saying, “The customs system must be automated to boost the economy. A manual system is inefficient and prone to corruption. Modernisation will save time, reduce corruption, and cut costs.”

Md Mohiuddin Rubel, former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), echoed these sentiments.

“Automation is the global standard. It is high time our customs houses adopted full automation to ensure smooth and efficient business operations,” he said, adding that modernisation would increase revenue and the volume of trade.

In the absence of automation, businesses face prolonged delays and increased costs, particularly in handling raw materials and finished goods.

Trade bodies have pointed out that manual systems lead to inconsistencies, human error, and inefficiencies that hinder economic growth. Stakeholders also argue that the slow progress in implementation undermines confidence in the government’s ability to meet its development targets.

The delays have left businesses frustrated, as they continue to face unnecessary costs and inefficiencies.

With the bidding process ongoing, businesses urge the government and NBR to expedite the implementation of the project to deliver the promised benefits of automation and enable smoother trade operations.

Business leaders have called for a clear timeline and consistent updates on the project’s progress to ensure accountability and transparency in its execution.