Smuggled cosmetics threaten local industry

Local cosmetics makers have warned that the industry faces an uncertain future unless stricter controls are introduced to stop smuggling and misdeclared imports.

Despite growing production capacity, they said the steady influx of grey market goods is undermining progress, deterring investment, and damaging domestic productivity. If left unchecked, this could push the sector back into import dependence.

At a seminar in Dhaka yesterday, Jamal Uddin, secretary of the Association of Skin Care and Beauty Products Manufacturers and Exporters of Bangladesh, said, "Tax evasion and consumer deception are now open secrets. Consumers are being cheated with these counterfeit products and facing serious health risks."

The association hosted the event, titled "Export Potential of the Cosmetics and Skincare Industry: No More Fake and Substandard Products", at the office of the Directorate of National Consumers Right Protection (DNCRP).

Speakers said some dishonest cosmetics and skincare item traders are resisting the National Board of Revenue's new customs policies, which aim to intensify measures against false declarations, under-invoicing, tax evasion, and the sale of expired or substandard goods.

At the programme, Uddin called for policy support to help local producers grow and offer quality products at affordable prices.

He also urged the government to encourage global brands to manufacture in Bangladesh by improving access to raw materials and raising tariffs on finished imported cosmetics.

Official figures from the NBR show that colour cosmetics imports were worth around Tk 500 crore in the last fiscal year.

But the association estimates the true figure is closer to Tk 1,600 crore when under-invoicing and weight manipulation are excluded.

This suggests that about Tk 1,100 crore is being dodged in taxes.

Revenue data also show that in the fiscal year 2024-25, all cosmetics importers together paid only Tk 17 crore in revenue.

By contrast, one domestic manufacturer alone contributed more than Tk 100 crore in taxes, the association said.

MS Siddiqui, former vice-president of the International Business Forum of Bangladesh, said reducing import duties on essential raw materials for cosmetics would help expand local production. Around 90 percent of these materials must be imported at high cost.

He argued that Bangladesh could turn its cosmetics sector into a leading export earner with the right government support, including lower tariffs on raw materials, higher duties on finished imports, stronger enforcement against illegal consignments, and efforts to stop counterfeits.

Ishaqul Hossain Sweet, a former director of the Federation of Bangladesh Chambers of Commerce and Industry, echoed similar views.

He said making it easier to import essential ingredients while raising duties on finished foreign cosmetics would boost domestic production and entrepreneurship.

Mohammed Alim Akhter Khan, director general of the DNCRP, said consumers are regularly misled about product quality in sectors such as cosmetics, edible oil, and food.

"The same businessman who is fined today is seen violating the law again tomorrow. Unless this reality changes, fines alone will not be enough to bring about meaningful reform," he said.