Known as the mother of all industries, the light-engineering sector makes an important contribution to the industrial, agricultural, automobile, and construction sectors of the country. Bicycle, electrical goods & electronics, automobiles and battery are the segments of this sector. A recent International Finance Corporation (IFC) study showed this sector in Bangladesh employs 600,000 people in 50,000 micro-enterprises and 10,000 Small and Medium Enterprises.
8.2 BILLION USD DOMESTIC MARKET SIZE IN 2021
795.63 MILLION USD EXPORT EARNINGS IN FY2021-22(EPB)
600,000 PEOPLE EMPLOYED BY 40,000 LE COMPANIES (2021)
34 LE CLUSTERS ACROSS THE COUNTRY
HUGE GROWTH POTENTIAL IN THIS SEGMENT AS LOCAL PRODUCTION ONLY MEETS 50% OF THE TOTAL DEMAND
GREW BY 50.4% YOY TO REACH
Light Engineering Sector (LES) offers a wide and diversified array of products with proven quality and conformity standards. These includes bicycle, battery, automobiles, automobile spares, construction equipment, iron chain, stainless steel wares, optical lens etc. Electrical goods and electronics are essential LES products. A new generation of dynamic entrepreneurs have entered into this product segment and taking Bangladesh to a new height. Currently they are producing power transformer, switch gear, electric wires and cables, refrigerator, compressor, transistor, mobile-phone, TV, diode, energy saving bulbs, switch-socket, electric generators, water heater, humidifier and dehumidifier, all types of fans, fancy light fittings, IPS, voltage stabilizer, spare parts of lifts and escalators, remote control switch, microprocessor-based control system etc. Moreover, the sector offers manufacturing machinery and spare parts for various engineering and non-engineering sectors.
According to the Export Promotion Bureau (EPB), the Bangladeshi small and medium scale manufacturers exported USD 795.63 million worth of engineering goods in the FY 2020-2021, posting an 50.4% growth year on year.
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.
DUTY-FREE MARKET ACCESS
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.
Reduced corporate income tax for 5 to 10 years depending on location for newly-established industries engaged in the production of automation and robotics design or manufacturing including components of automobiles, bicycles, electronics, boilers, compressors, electrical transformers, LED TVs, mobile phones, textile machinery 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
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