The government will provide technical and financial assistance to tanneries in Savar that have yet to resume production after being relocated from Hazaribagh, as it seeks to revive the leather industry and boost its export competitiveness.
However, factories failing to comply with environmental regulations will not be allowed to operate, Commerce, Industries, Textiles and Jute Minister Khandaker Abdul Muktadir said on Wednesday.
He said the government was working to address longstanding problems in the leather industrial estate in Savar, including inadequate waste management and the need to meet international environmental standards.
“Those tanneries that have not yet started production will receive the necessary technical and financial support to become operational,” he said at the Bangladesh-Netherlands Sustainable Trade Forum 2026 at a hotel in Dhaka.
The forum also marked the launch of the Centre for the Promotion of Imports from Developing Countries (CBI) programmes on home textiles and leather. The event was jointly organised by the Dutch organisation and LightCastle Partners.
The minister said Bangladesh exported around $1.78 billion worth of leather and non-leather products last year, reflecting the sector’s substantial potential in international markets.
The European Union remains a major and promising destination for Bangladeshi leather products, while neighbouring India has also emerged as an important buyer, he said.
To tap the opportunities, the country needs to improve product quality, ensure environmental compliance and align production systems with international market requirements.
The prolonged relocation of tanneries from Hazaribagh to Hemayetpur in Savar had held back the industry’s development, the minister said, adding that the government was now taking steps to resolve the sector’s structural problems.
As part of the environmental compliance drive, factories occupying 50,000 square feet or more will be required to install their own effluent treatment plants (ETPs).
All tanneries in the Savar industrial estate will also have to obtain certification from the Leather Working Group (LWG), an international organisation that assesses environmental performance and sustainability in the leather supply chain.
The minister said there would be no relaxation in enforcing environmental standards.
The government is also working to enhance the capacity of the central effluent treatment plant (CETP) at the Savar estate and install an improved chromium recovery unit to strengthen waste management.
These measures would help Bangladesh’s leather industry become more competitive in global markets, he added.
On the broader industrial sector, Muktadir stressed the need to expand cottage, micro, small and medium enterprises (CMSMEs), saying their development was essential for inclusive growth, employment generation and reducing income inequality.
The sector currently contributes less than a quarter of the country’s gross domestic product, while its contribution should be raised to at least 60 percent to help narrow economic disparities, he said.
The government has increased the allocation under the SME loan refinancing programme to Tk2,000 crore from Tk300 crore since taking office, the minister said.
He added that the programme had a loan recovery rate of 98 percent, demonstrating the financial discipline and capacity of small and medium entrepreneurs.
The minister also called for stronger economic cooperation between Bangladesh and the Netherlands, particularly in technology transfer, skills development, sustainable industrialisation and access to international markets.
Dutch expertise could help improve the competitiveness of Bangladesh’s export-oriented home textile and leather sectors, he said.
Dutch Ambassador to Bangladesh Joris van Bommel and CBI Managing Director Judith Arends also spoke at the event, attended by government officials, business leaders, development partners and industry representatives.