Bangladesh is the world's second-largest clothing exporter — and one of the most cost-effective sourcing destinations for UK importers. Under the UK's Developing Countries Trading Scheme, nearly all goods from Bangladesh enter at 0% import duty. But claiming that rate isn't automatic. Here's exactly how DCTS works, what the rules of origin require, and what you need to put on your customs declaration.
Not a bilateral free trade agreement — but something arguably better for importers: the Developing Countries Trading Scheme (DCTS). Bangladesh qualifies as a Least Developed Country (LDC), which gives it Enhanced Preferences — the most generous tier of the DCTS — covering virtually all goods at 0% import duty.
DCTS replaced the EU's EBA (Everything But Arms) scheme when the UK left the EU. It came into force in June 2023 and is the UK's unilateral preference programme for developing nations. Unlike an FTA, it doesn't require Bangladesh to reciprocate with lower tariffs on UK exports.
Under DCTS Enhanced Preferences, Bangladesh's major export categories all qualify for 0% UK duty:
| Product category | HS chapters | Standard MFN rate | DCTS rate |
|---|---|---|---|
| Knitted clothing (T-shirts, knitwear, hosiery) | 61 | 12% | 0% |
| Woven clothing (shirts, trousers, dresses) | 62 | 12% | 0% |
| Textiles and fabrics | 50–60 | 4–12% | 0% |
| Footwear | 64 | 3–17% | 0% |
| Leather goods and bags | 42 | 2.7–4% | 0% |
| Ceramics and homewares | 69 | 6–12% | 0% |
| Jute and jute products | 53 | 0–6% | 0% |
| Most other manufactured goods | Various | Varies | 0% |
The difference between paying 0% and 12% on a £10,000 order of clothing is £1,200 in saved duty — and because import VAT is charged on customs value plus duty, the VAT saving is on top of that.
Claiming 0% under DCTS requires two things: the right documentation from your supplier, and the correct preference code on your UK customs declaration.
Your Bangladeshi supplier must provide a statement of origin — a declaration on the commercial invoice (or a separate document) certifying that the goods meet DCTS rules of origin. The format is standardised:
"The exporter of the products covered by this document declares that, except where otherwise clearly indicated, these products are of [Bangladesh] preferential origin."
For shipments with a value above €6,000, the supplier must be registered under the REX (Registered Exporter) system and must include their REX number on the statement. For smaller shipments, any supplier can make the statement without being REX registered.
Your freight forwarder files your UK import declaration via the Customs Declaration Service (CDS). They must enter the DCTS preference code in the appropriate field. For DCTS Enhanced Preferences from Bangladesh, the tariff preference code is typically 1Y6. Without this code, HMRC will apply the MFN rate regardless of what documents you hold.
For clothing (HS Chapters 61 and 62), the DCTS rule of origin requires dual transformation. This means:
In practice, the major Bangladeshi garment factories operating for export — especially in the Dhaka and Chittagong Export Processing Zones — typically source yarn from Bangladesh, India or other DCTS-eligible countries, so this rule is generally met.
The situation to watch is fabric sourcing: if your supplier buys woven or knitted fabric directly from China and cuts/sews it into garments in Bangladesh, the goods may not meet the dual transformation rule and DCTS preference may not apply. Ask your supplier about their fabric sourcing to confirm eligibility.
For clothing specifically, also ensure garments carry fibre content labels in English and country of origin labelling as required by UK Textile Products Regulations. Goods landing without compliant labels can be held by Trading Standards.
Worked example: You import 1,000 cotton T-shirts from Dhaka. Supplier price £3,500 FOB Chittagong. Sea freight to Felixstowe £750, insurance £10.
Compare to the same order sourced from China at MFN rates:
Saving by sourcing from Bangladesh: £613 on a £3,500 order. On larger volumes, this is significant.
Nearly all goods qualify under DCTS Enhanced Preferences. The only categorical exclusion is arms and ammunition. For clothing, textiles, leather, footwear, ceramics and most manufactured goods, the duty rate is 0%. Some complex products (e.g. electronics where components originate outside Bangladesh) may face rules of origin challenges — check the specific rule for your commodity code in the HMRC Trade Tariff.
REX (Registered Exporter) is the system that allows exporters in DCTS countries to self-certify that their goods meet the rules of origin. For shipments over €6,000, your Bangladeshi supplier must be REX-registered and include their REX number on the origin statement. For smaller shipments, any supplier can make the declaration without registration. You can verify a supplier's REX number on the European Commission's REX database.
The UK DCTS is designed to be stable and predictable. Bangladesh's LDC status gives it Enhanced Preferences — the most generous tier — and there is no indication this will change. Preferences could be suspended in exceptional circumstances (as happened with Myanmar due to human rights concerns), but Bangladesh has faced no such risk. That said, the UK Government reviews the DCTS periodically, so it's worth monitoring GOV.UK for any changes.
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