KEY ASPECTS
Economic Significance
The light-engineering sector supports key industries like agriculture, construction, and automobiles, employing 800,000 people and fostering local manufacturing and import substitution.
Employment and Entrepreneurship
This sector creates opportunities for rural entrepreneurship and employs thousands through 60,000 micro-enterprises and 12,000 SMEs, contributing significantly to local economies.
Growth and Innovation
The sector shows remarkable growth potential, driven by rising demand for locally made products and the adoption of technology-driven manufacturing and digital solutions.
Government Support and Future Potential
Recognized as a priority sector, government initiatives like skill development, infrastructure upgrades, and financial incentives aim to bolster its contribution to industrialization and export growth.
SECTOR PROFILE
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Light Engineering INDUSTRY KEY PRODUCTS
KEY EXPORT MARKET
50.4%
Growth rate
4000
Number of products
60
Exported to countries
$15 bn
Target to achieve
COMPETITIVE ADVANTAGES
Competitive Workforce
Bangladesh has duty free access to developed countries (under the Generalised System of Preferences) such as the EU, UK, Japan, Canada, Russia, and Australia. Few countries get this benefit when it comes to exporting Light Engineering products, thus indicating the industry’s potential for export competitiveness.
Duty-Free Market Access
Competitive labor costs serve as a strong competitive advantage for all the export-oriented industries of Bangladesh. Although China and ASEAN countries continue to be amongst the major competitors in the overseas market, competitive labor cost has and will continue to put the Bangladeshi plastics industry in a stronger position.
Locally Available Raw Materials
Local availability of high-quality raw materials like steel, crude steel (billets) and other metals.
POLICY SUPPORT
Fiscal Incentives
Reduced tax on automobile, bicycle, electronics production, and more
Reduced import duties on brass wire and copper plate as inputs for mold fabrication
15% cash incentive on export value of light engineering goods, including batteries
Reduced import duties on raw materials, tools, and equipment used for Light Engineering
Import duty exemption on capital machineries
No VAT imposition on export goods
Non-fiscal
Recognized as one of the highest priority sectors in the Export Policy 2021-24
Light Engineering products were declared as Product of the Year by the Government of Bangladesh in 2020
Bonded warehousing facility for large imports of ingredients to be used for production
Development of 10 additional light engineering industrial parks planned by the Ministry of Industries in districts of Dhaka, Narayanganj, Jashore, Bogra, Nilphamari and Narsingdi
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