The Ministry of Commerce has already identified some measures to contain the import spree that contributes to increasing trade deficit, sources said.

The measures are imposing higher margin for opening letters of credit (LCs), introducing supplementary tax and creating other non-tariff barriers to discourage imports of unnecessary and luxury items.

But import of essential items like sugar, rice, wheat and edible oil may also be included in the list for putting restriction, in order to restraint the unusual upward trend in import.

The ministry placed the proposed measures to the cabinet committee on export at its meeting yesterday with Commerce Minister Amir Khosru Mahmud Chowdhury in the chair but the committee decided to discuss the issues at its next meeting.

Foreign Minister M Morshed Khan, Shipping Minister Akbar Hossain, Industries Minister Matiur Rahman Nizami and Commerce Secretary Suhel Ahmed attended the cabinet committee meeting held at the commerce ministry.

Bangladesh's trade deficit is on rise alarmingly in recent years mainly due to lower export and higher import growths.

According to commerce ministry statistics, rice import increased by 720 per cent (from $29.62 million to $242.82 million) during July-May period of 2002-03 fiscal year compared to the corresponding period of the previous fiscal.

Sugar import went up by 311 per cent (from $31 million to $127.54 million), edible oil 53 per cent (from $208.64 million to $318.2 million) and wheat 46 per cent (from $130.21 million to $189.66 million) during the period.

The overall import during July-May period of FY03 went up by 8.88 per cent.

"It is clear from the statistics that the import growths for rice, sugar and edible oil are not showing a normal trend," said a commerce ministry official. Without elaborating he hinted at some other factors behind the unusual trend.

"There is nothing harmful if imports of capital machinery and raw materials increase. But rise in importing luxury items definitely harms local industries and it should be discouraged," said another official of the ministry.