Guide to exporting from Indonesia to Bangladesh

It is a standard practice for companies to continually seek new trade avenues for expansion to stay ahead. However, with Indonesian markets becoming increasingly competitive, identifying and leveraging these new opportunities is not just advantageous — it’s essential for survival and growth.

According to the ASEAN Experts Group on Competition (AEGC), the level of business competition in Indonesia is on an upward trajectory. This is evidenced by Indonesia’s Business Competition Index (IPU), which rose from 4.87 in 2022 to 4.91 last year. This uptick indicates a high level of competition within the country that is only growing, underscoring the need for local manufacturers and businesses across various sectors to explore new markets for expansion. And one such promising market is Bangladesh, a growing economy with a demand for diverse products.

However, before tapping into this market, it is crucial for exporters to understand the intricacies of exporting from Indonesia to Bangladesh, such as market opportunities, trade agreements, import regulations and logistical challenges. By grasping these aspects and forming strategic logistics partnerships with trusted logistics providers like DHL Express, Indonesian businesses can gain a competitive edge in this new market.

Market research and identifying export opportunities

For Indonesian businesses aiming to expand into Bangladesh, it is crucial to first understand the local market and identify trading opportunities through comprehensive industry research. This approach helps in pinpointing sectors where demand aligns with Indonesian export capabilities, such as apparel and agricultural products.

According to CEIC, Bangladesh’s total imports recorded US$5.6 billion in January 2024, marking a growth from the previous month’s value of US$5.0 billion. Recent data from CEIC also highlights that Bangladesh’s total imports grew by 15.2% year-on-year in January 2024, signalling a robust and expanding market receptive to diverse goods.

As reported by Trading Economics, Bangladesh’s top imports consist of the following:

Petroleum and oil (11%)
Textiles (10%)
Food items (9%)
Iron and steel (7%)
Edible oil (4%)
Chemicals (4%)
Yarn, plastic and rubber articles (4%)

These insights highlight the breadth of opportunities available for Indonesian businesses in Bangladesh. By aligning product offerings with Bangladesh’s trade demands, Indonesian businesses can effectively penetrate and prosper in this growing market.

Understanding trade agreements and regulations

For Indonesian exporters keen to enter the Bangladeshi market, it’s essential to grasp the trade agreements and regulations governing exchanges between these regions. A thorough understanding of legal trading frameworks, like free trade agreements, not only ensures compliance but also maximises the benefits of shipping cargo to Bangladesh from Indonesia.

One key agreement is the Preferential Trade Agreement Among Developing-8 Member States, which includes a list of countries such as Bangladesh. Signed in 2006 and implemented in 2011, this trade agreement facilitated a gradual reduction in tariffs, which ranged from 25% to 10% on various products imported and exported within these member states. Furthermore, as of September 2023, Indonesia and Bangladesh were negotiating Preferential Trade Arrangements to bolster trade cooperation. These negotiations represent a promising avenue for new opportunities, potentially easing access and strengthening economic ties between the two nations.

Moreover, understanding import procedures and regulations is crucial as these regulations can vary widely depending on the type of goods. These regulations can also encompass everything from standard customs duties to specific restrictions. For instance, it is mandatory for importers in Bangladesh to submit documents to the country’s Import Control Authority concerning the price paid or payable for imported goods.

While it may be daunting for Indonesian exporters to navigate these regulations, partnering with an experienced logistics provider such as DHL Express can ensure effective management of all compliance aspects, from navigating the intricacies of customs clearance to adhering to local and international shipping regulations, thereby facilitating smoother and more reliable trade operations.

Navigating customs clearance in Bangladesh

Customs clearance is a critical step in the shipping process. Whether you’re exporting garments or other goods, meticulous preparation is essential to ensure your shipments navigate through Bangladeshi customs without delays. Here are the key aspects to take note of when exporting goods from Indonesia:

1. Duties, taxes, and fees

Engaging with the customs process in Bangladesh involves understanding the applicable import duties, tax rates, and fees. Crucial factors include:

The de minimis value, which exempts low-value shipments from taxes and enhances cost-effectiveness for smaller shipments.
Correctly classifying goods using the Harmonized System (HS) codes to determine the appropriate duties and taxes and if any additional licenses or registration is required.
Leveraging Trade Agreements which can significantly reduce duties.

2. Export documentation

A smooth customs clearance process requires a comprehensive set of documents. For Indonesian businesses looking to export their goods, there is a set of export documents which must be submitted. This list includes the Certificate of Origin (COO), commercial invoice, and packing list, among other documents.

These documents must be accurately completed and submitted prior to shipping to ensure compliance with export regulations and facilitate a seamless transit through customs. Additionally, for Indonesian businesses exporting certain types of goods, an additional export license from the Indonesian Ministry of Trade is required. This could be an export registration license or an export approval license, depending on the nature of the goods and their destination.

3. Packaging tips

Choosing the right packaging materials and employing proper packing techniques are critical to ensure that goods withstand the rigours of international transport. The correct packaging not only protects items during transit but also reduces the risk of damage, ensuring that products reach Bangladesh in optimal condition. Here are a few basic packaging tips that exporters should employ:

Select sturdy boxes: Opt for double-walled or corrugated boxes for added strength and durability, especially for heavier items.
Use cushioning: Employ ample cushioning materials like biodegradable packing peanuts, crumpled paper, or corrugated bubble wrap to protect items from shocks and vibrations.
Secure seams tightly: Use high-quality, water-resistant packing tape to seal boxes. Ensure all seams are taped to prevent opening during transport.
Fill voids: Fill any empty spaces within the box to prevent items from moving during shipment. Materials such as air pillows made from recycled materials offer both protection and sustainability.
Wrap items individually: Wrap items individually to provide additional protection. Use recycled paper or eco-friendly bubble wrap for delicate items.
Label clearly: Clearly label the package with "Fragile," "This Side Up," or other necessary handling instructions using ink that doesn’t fade. Consider labels made from recycled or sustainable materials.
Choose sustainable materials: Whenever possible, use sustainable packaging materials that are recyclable and sourced sustainably to reduce the environmental impact. Inform customers of the sustainable packaging to enhance brand image.

Ship to Bangladesh with DHL Express

Venturing into foreign markets can be a daunting prospect for many businesses, but DHL Express makes the process of exporting from Indonesia to Bangladesh straightforward and efficient. With expert handling of customs clearance, we guarantee a fast and smooth export process, minimising potential delays and complications. Additionally, DHL Express’ robust online tools allow businesses to easily send couriers, track shipments, and manage deliveries, ensuring transparency and control over the entire journey from Indonesia to Bangladesh.

Open a business account with DHL Express today and expand your business with ease and confidence.