First meeting of the Policy Coordination Unit (PCU) held on Thursday at the Ministry of Commerce, senior officials and trade leaders. Photo: BSS

DHAKA, March 12, 2026 (BSS) - Bangladesh is moving decisively to fortify its 
multi-billion dollar export trade against tightening European regulations, 
initiating the development of a comprehensive 'National Traceability 
Strategy'. 

At the first meeting of the Policy Coordination Unit (PCU) held on Thursday 
at the Ministry of Commerce, senior officials and trade leaders emphasized 
that establishing a strategic roadmap is now a matter of national economic 
security to meet the European Union's (EU) Ecodesign for Sustainable Products 
Regulation (ESPR), said a press release here today.

The session, chaired by Md. Abdur Rahim Khan, additional secretary (Export), 
focused on a Gap Analysis and Needs Assessment conducted by Business 
Initiative Leading Development (BUILD) in collaboration with the Ministry of 
Commerce and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH under the STILE-II 
Project.

Dr. Wasel Bin Shadat, research director at BUILD, informed the unit that the 
ESPR represents a fundamental structural shift in global market access.

The regulation transitions the industry from voluntary environmental 
standards to legally binding requirements for nearly all physical goods 
entering the EU, he added.

Md. Abdur Rahim Khan clarified that while the ESPR is a mandatory regulatory 
requirement for market access, the DPP serves as the essential tool to 
comply. 

To maintain access to the European market, he said, Bangladeshi exporters 
must be prepared to provide machine-readable data accessible at the border, 
comprehensive information on material composition and granular data regarding 
carbon footprints and environmental impact.

The economic stakes of non-compliance are severe, particularly as Bangladesh 
prepares for its LDC graduation and seeks to maintain its global 
competitiveness. 

Research presented at the meeting quantified the immediate threat to the 
national exchequer:

Failure to adapt to these traceability requirements could put an estimated 
US$ 0.36 billion to $ 1.20 billion of annual export revenue at risk.

The "Gap Analysis and Needs Assessment" identified 62 specific readiness gaps 
across six compliance domains. Of these, 15 "Tier 1" gaps were classified as 
requiring immediate national intervention to prevent substantial losses in 
export earnings.

To bridge these gaps, the PCU recommended a Federated Architecture for the 
national traceability platform.

Ferdaus Ara Begum, CEO of BUILD, stressed that a "deep dive" into these 
evolving rules is now a necessity for the private sector to survive the 
regulatory shift.

She specifically identified the Registered Exporter (REX) system, currently 
managed and operated by the Export Promotion Bureau (EPB), as the 
foundational framework for this initiative. 

Because the REX system already functions as a verified database for 
exporters, it provides the established "data rails" necessary to anchor a 
robust national traceability platform, allowing the government to integrate 
current export processes with the high-level digital requirements of the EU.

The meeting highlighted a sharp disparity in readiness across different 
export sectors. 

Vidiya Amrit Khan, vice president of BGMEA, noted that the apparel sector is 
already navigating increased demands for verifiable evidence of sustainable 
sourcing. 

She emphasized that the ESPR is designed to strictly monitor production to 
ensure it is free from child labor, unfair labor practices, and environmental 
degradation, affirming that compliance is "mandatory and non-negotiable".

Conversely, Major Rafiqul Islam, secretary general of LFMEAB, reported 
significant awareness gaps within the leather and footwear sectors. 

He noted that many association members remain largely unfamiliar with ESPR 
requirements and called for immediate, organised awareness campaigns. 

He also suggested that the government explore potential avenues for timeline 
flexibility to prevent these sectors from being sidelined.

Md. Towhidul Islam, additional director of the Sustainable Finance Department 
at Bangladesh Bank, informed the PCU that a fund of Taka 2,500 crore is 
available to facilitate industries in adopting green and compliant practices. 

This fund is intended to help manufacturers modernize operations to meet the 
environmental standards demanded by European regulators, he added.

Michael Klode, project head for GIZ (STILE-II), provided a critical technical 
clarification: the current collaboration between the Ministry of Commerce and 
BUILD is focused on developing the National Strategy, not the physical 
creation of Digital Product Passports for individual companies. 

This strategic roadmap is intended to provide the policy framework and 
guidance, while the actual implementation of DPPs remains an industry-level 
responsibility.

A B M Fakhrul Alam, group sustainability lead at Urmi Group, issued a stern 
warning that any delay in implementing traceability systems would result in 
an "unmanageable compliance burden" in the near future. 

He advocated for the swift development of a simplified national platform to 
assist manufacturers in data management.

In response, the Ministry of Commerce decided to form a specialized Task Team 
to lead sector-specific dialogues to ensure every industry is prepared for 
the transition. 

The meeting saw broad-based participation from the public sector, including 
the Ministry of Industries, MoEFCC, Planning Division, Ministry of Textiles 
and Jute, ICT Division, Ministry of Labour and Employment, BEZA, EPB, SREDA, 
BSTI, DoE, and SMEF. Private sector stakeholders included representatives 
from DCCI, BGMEA, BKMEA, LFMEAB, BPGMEA, BTMA, BGBA, BTGWPEA, and BAFFA.