• As of now, the value of the plastic industry in Bangladesh is USD 2.99 billion, and it is growing at a CAGR of 20%.
• The export value increased to USD 245 million in FY 2023-2024 which is a year-over-year increase of 14.6%.
• 10% cash incentives on exports along with other incentives for investment are provided by the government.
• Modern infrastructure alongside strategic location gives competitive advantages.
• With a current recycling rate of 30%, a strong focus on sustainability targets 50% by the year 2025.

The Bangladeshi plastic industry has rapidly become one of the crucial sectors in the country’s economic development. It has become one of the most important components of international trade in the past decade due to some policy changes, government support, and growing demand both in the country and abroad.

The Bangladeshi plastics industry is currently growing at an impressive rate of 15-20% and is receiving a lot of international attention from investors, businessmen, and policymakers. This article focuses on the impact of government aid on the growth of the industry by providing an evidence-based analysis of export promotion policy, business facilitation, and development aid. These efforts not only enhance the perception of Bangladesh by the investors but also demonstrate how much the country can achieve in establishing itself as a global player in the plastic industry.

Industry Overview

As per the Export Promotion Bureau (EPB), the plastic industry in Bangladesh accounts for approximately 1% of the GDP while employing more than 1.5 million people. The distinguishing characteristic of this industry is not only its shifts in the domestic market but also its growing share in global exports. Currently, Bangladesh’s export of plastic products has surged to approximately USD 245 million in FY 2023-2024, which is a two-fold increase over the past five years, with forecasts indicating even greater growth potential in the coming years.

Recognising its potential, the government has put into place elaborate policy frameworks designed to catalyse the growth of this industry, such as tax incentives, export subsidies, and investment in industry infrastructure.

Policy Initiatives to Support Export Growth

The authorities have put into action policies that are tailored to increase the exports of Bangladeshi products, especially focusing on aiding manufacturers and facilitating their access to global markets. Some of the initiatives include:

• In an attempt to encourage manufacturers to work towards fulfilling international demand and striving to meet industry standards, a 10 percent incentive scheme has been initiated for the exporters of selected plastics.
• Furthermore, the tax burden obliged in relation to the raw materials, which are used in the manufacture of goods is also eliminated with the duty-free keeping them in Bonded warehouses.
• Participation in Government-sponsored international trade fairs like the Dhaka International Trade Fair has enhanced Bangladesh’s marketing image in the global plastic market.

Top export destinations for Bangladeshi plastic products (FY 2022-2023)

Source: Export Promotion Bureau, Bangladesh

As such, the vibrant geographical diversity of export destinations demonstrates global trust in Bangladeshi plastic products, made possible through political advocacy and compliance with globally accepted standards.

Government Engagement with Trade Bodies

The government often works with trade associations, like the Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA), to meet the demands and challenges of the industry. This collection of programs directs assistance toward capacity-building programs such as workshops, training sessions, and focused funding for research & development.

Moreover, the relationship led to the establishment of various committees to address challenges in compliance with the environmental and normative recycling subordinate to industrial roadblocks and derive new solutions.

Bridging the Gap Between the Industry and Investors

The government also encourages networking via the use of SEZs (special economic zones) to attract and retain international investment. Currently, foreign direct investment (FDI) in plastics manufacturing is relaxed through tax holidays, fast-tracked permitting and better infrastructure because of the Korean Export Processing Zone (KEPZ) and Gazipur Economic Zone.

The Increase of Circular Economy Initiatives in Plastics

Bangladesh has shown its willingness to be sustainable by fostering the adoption of circular economy practices within the plastics industry. Private sector engagement towards the plastic waste management transformation project incorporates improving recycling processes.

• The launching of the Clean Innovation Programme with top universities and research organisations detailed the focus on biodegradable materials.
• Green Finance Initiatives co-funded by international organisations such as the Asian Development Bank (ADB) pay manufacturers for waste reduction and investments in sustainable production methods.

Financing and Tax Incentives

To make Bangladesh even more alluring for potential investment and increase foreign direct investment (FDI) in the country, specifically for the plastic sector, financing options are quite favourable. These include low-interest loans from government-sponsored banks and tax incentives like hundred percent duty exemptions on the import of capital machinery for sustainable manufacturing.

Innovation and Research

It is supported by the government of Bangladesh through research and development (R&D) funding to promote innovation and sustainability within the sector. A number of research institutes dedicated to developing sustainable products, processes and materials have been established in the country. These include the Bangladesh Council of Scientific and Industrial Research (BCSIR), an institute focused on polymer research that has made advances in developing sustainable alternatives to plastic.

Moreover, Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) works with universities to develop research and development centres on plastic waste management and recycling technologies. Not only do these initiatives support sustainability, but they also give the opportunity for young researchers to become involved in developing sustainable industry solutions. (Source: Bangladesh Investment Development Authority (BIDA))

Why Bangladesh is the Next Frontier for Investors

Untapped Opportunities

Backed by the government and a young, educated population, the plastic industry in Bangladesh offers immense potential for growth in specialized sectors such as bioplastics and 3D-printed materials. However, giving these technologies a jumpstart can lead to exponential growth, reflecting global trends in sustainable manufacturing in the region, which remains a relatively unexplored area. Forward-thinking investors who invest in these early-stage sectors are likely to receive a high return on investment.

Strategic Geographical Advantage

Bangladesh is located at the junction of South and Southeast Asia, which is very advantageous in expanding the trade relationship with several continents. Combined with its membership in trade pacts such as the South Asian Association for Regional Cooperation (SAARC), this gives the country easy access to omnifarious markets. This positions itself strategically not only to enhance export potential but also to procure raw materials at competitive costs.

Capitalizing on a Culture of Industry Expansion

Government efforts to instil confidence in investors through transparent regulatory frameworks will help Bangladesh retain its competitive status in the regional supply chain for plastics manufacture and exports. A consistent effort to improve the business ecosystem creates an environment where growth and innovation can thrive.

A World Without Limits to Explore

The expansion of Bangladesh’s plastic sector is not just a numbers game but a story of opportunities, sustainability, and innovation. This flourishing ecosystem is a golden opportunity for startups,

policymakers, and investors to take advantage. While the government has laid the groundwork with proactive support for sustained growth, ongoing innovation and collaboration are ensuring Bangladesh is one of the rising stars in global plastics. With the use of advanced technology, encouragement of public-private cooperation, and the drivers of environmental responsibility, the plastics industry of Bangladesh has the potential to expand even more and contribute to the global stage. For an entrepreneur, policymaker, or investor thinking about getting into this high-growth sector, the time is now.

A New Journey Begins

In the last few decades or so, Bangladesh has demonstrated adequate and steady industrial growth in the manufacturing and export sectors, including textiles, agriculture, IT, and, most recently, plastic manufacturing. With the support of government policies, cultivated entrepreneurial spirit, and external investment, the country has been able to tackle challenges and trends with global strategic solutions, adapting as needed. The shift and diversification towards fulfilling global demand while addressing internal consumption needs has cemented Bangladesh as a key international player. With an increased focus on education, green technologies, and infrastructure, the country would further solidify its position as a global manufacturing hub. Now seems to be one of the most opportune moments to invest in and partner with the country. Entrepreneurs, policymakers, and investors are now provided with the enormous opportunity to be a part of the growth narrative and take action to propel the economy. By leveraging its existing strengths and implementing visionary strategies, Bangladesh is carving its future economy for itself and leaving a mark on the world.

References

1. Export Promotion Bureau (EPB), Bangladesh
2. Bangladesh Investment Development Authority (BIDA)
3. Asian Development Bank (ADB)
4. Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA)
5. Bangladesh Council for Scientific and Industrial Research (BCSIR)
6. World Bank
7. South Asian Association for Regional Cooperation (SAARC)
8. National Bureau of Statistics, Bangladesh
9. Ministry of Commerce, Government of Bangladesh