Bangladesh Must Follow India’s Lead on Fighting Inflation
We must break the silence of the graveyard. The cure for inflation is found in the shovel, the tax holiday, and the cold-room—not in a 15% interest rate. To follow India’s policy is to finally choose a stability that breathes.
The March sun hangs heavy over the delta, a singular, punishing eye that brooks no dissent. In the villages, the earth is beginning to crack, and in the city, the air is thick with the grit of a thousand stalled construction sites.
We are told by the high priests of finance that this stagnation is a necessity -- that by pushing effective interest rates toward a suffocating 15%, we are "cooling" an overheating economy.
But look closely at the dust. This isn't the cooling of a fever; it is the onset of rigor mortis. We are being sold the stability of a graveyard, where the only thing lower than our inflation is the pulse of our own production.
We must be honest: the obsession with high interest rates is a primitive response to a modern crisis.
India’s 2026 "Goldilocks" reality -- 7.4% growth at a mere 1.7% inflation -- was not won by making money impossible to touch. While we tighten the noose with 15% lending rates, New Delhi has maintained a pro-investment environment with a repo rate of 5.25%.
They realized that you do not lower the price of bread by making it impossible for the baker to buy an oven. If we are to survive, we must follow their lead.
Why Bangladesh’s Inflation is Different
To fix the problem, we must first admit what it is. Our inflation is not driven by "too much money chasing too few goods" -- it is driven by a supply chain that has been allowed to decay.
The Currency Wound
Since 2021, the taka has lost 43% of its value against the USD. In a nation that imports over $3.5 billion in cotton and nearly all its fuel, every dip in the taka is a direct hit to the consumer’s plate.
The Oligopoly Tax
Our markets are managed by middlemen syndicates. A handful of players control the flow. High interest rates do not hurt these giants; they only crush the small competitors who could break their monopoly.
The Waste Tax
Due to a lack of cold storage, we lose nearly 30% of our perishables before they ever reach the market. This "rot-induced scarcity" is a far greater driver of food inflation than any interest rate could ever manage.
The 15% Trap vs. The 4% Solution
The current policy of squeezing credit is a tax on the future of Bangladesh. When we allow interest rates to hit 15%, we aren't just dampening demand; we are dismantling the very infrastructure that could lower prices. At 15%, the math for new housing or agricultural storage simply fails.
To break this cycle, we must pivot to the Indian blueprint: super-low interest rates specifically targeted at supply-side infrastructure. We need a cold chain refinance scheme that allows entrepreneurs to borrow at a capped 4-5% rate, with the Bangladesh Bank covering the spread. You don't build a national cooling spine with "predatory" capital; you build it with visionary credit.
Tax Holidays for the Cold Spine
Building a cold storage network is not just a business; it is a national service. To spur the market mechanism and break the back of the syndicates, the government must offer a complete 10-year tax holiday for any new entity entering the cold storage or specialized last-mile delivery sector.
This holiday must extend beyond corporate tax to include import duties on specialized refrigeration equipment and refrigerated trucks. By lowering the barrier to entry, we allow thousands of small-scale entrepreneurs to enter the market, ensuring that no single middleman syndicate can control the flow of goods.
Cold Chain as Deflationary Shield
India’s inflation victory is built on 35% to 50% credit-linked subsidies for multi-commodity storage. They have turned perishables into durable assets, ensuring that a bumper crop in March doesn't become a rot-induced price spike in May.
Incentivizing the Private Sector
By offering targeted, low-interest credit and tax-free horizons, India has spurred the private sector to build the "cold spine" the state cannot.
Digital Market Mechanisms
Platforms like e-NAM have decapitated the middlemen who thrive on the desperation of a farmer with no place to store their harvest.
Spurring the Real Estate Spine
To achieve high growth, we must spur the real estate sector. In the Indian model, real estate is treated as a deflationary pressure valve. By streamlining land acquisition and boosting long-term funding, they have ensured that supply meets the demographic shift.
In Bangladesh, we do the opposite. We treat real estate as a luxury to be taxed and 15% interest rates as a weapon to be wielded. The result? Our inflation remains a relentless tax on survival (8.58%), while India’s remains benign.
We must break the silence of the graveyard. The cure for inflation is found in the shovel, the tax holiday, and the cold-room -- not in a 15% interest rate. To follow India’s policy is to finally choose a stability that breathes.
Kawsar “KC” Chowdhury is an entrepreneur, commentator, and Co-Chair of the Global Bangladeshi Alliance. He works closely with the Bangladesh Caucus in the US Congress, helping shape diaspora-driven policy, trade, and education initiatives.
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