Bahrain has enacted Decision No. 63 of 2025, a significant regulatory reform permitting local factories to import essential raw materials and industrial inputs free of customs duties. This policy becomes effective from September 2, 2025, and aims to lower production costs while enhancing the competitiveness of Bahrain’s manufacturing sector.
Eligibility Conditions for Duty Exemptions
The customs duty exemptions apply if factories meet one or more of four criteria: if the required inputs are not domestically produced, if local products fail to meet necessary quality standards, if manufacturing locally would cause project delays, or if producing the inputs locally costs more than 10% above the import price. These guidelines provide manufacturers with more sourcing flexibility to maintain efficient and timely production.
Alignment with Bahrain’s Economic Vision
Industry and Commerce Minister Abdulla bin Adel Fakhro stated this initiative represents a strategic effort to strengthen national industries and expand local content. The manufacturing sector is a cornerstone of Bahrain’s economy, and the duty exemptions support not only cost reduction but also self-sufficiency and sustainable industrial growth. The policy dovetails with the Industrial Sector Strategy 2022–2026 and Bahrain Economic Vision 2030 to position the country as a regional industrial hub.
Economic Benefits and Complementary Programs
Beyond reducing input costs, the new customs exemption is expected to stimulate factory growth, create job opportunities, and boost exports of Bahraini-made products. It complements government initiatives such as the Takamul programme, which incentivizes local sourcing and employment of Bahraini nationals, particularly in public sector contracts.
Additional programs promoting industrial advancement include the ‘Made in Bahrain’ trademark for products with a minimum of 35% local content, the ‘Green Factory Seal’ recognizing sustainable manufacturing, and the ‘iFactories’ initiative encouraging digitalization and smart technologies within the sector. Together, these efforts aim to enhance local value addition, technological capability, and environmental sustainability.
This policy marks a notable step in Bahrain’s commitment to fostering an environment where local industries can thrive through strategic support and access to competitive resources.
Leave feedback about this