Businesses call for recognising Dholaikhal, Jinjira as light engineering hubs

Infographics: TBS

Businesses have called for the recognition of Dholaikhal and Jinjira, widely known for replica product manufacturing in Dhaka, as light engineering hubs, enabling them to make significant contributions to the development of the industry.

At a seminar titled "Import Substitute Industry in Bangladesh: Prospects of the Light-Engineering Sector," they also urged the government to provide a formal structure to the areas, which have been operating informally for decades.

The government authorities often conduct raids in Dholaikhal and Jinjira areas on allegations of manufacturing counterfeit parts, businessmen said at the event organised by the Dhaka Chamber of Commerce and Industry (DCCI).

They stated that, as a result, businesses in those areas face harassment though their products are widely used across the country. Therefore, this business should be transitioned into a formal structure instead of being suppressed.

"By formalising the local small light engineering hubs at Dholaikhal and Jinjira, we can enable them to make significant contributions to the economy," said Planning Minister MA Mannan.

There are approximately 7,500 shops, factories, and workshops in Dholaikhal and Jinjira, providing employment for around 60,000 individuals. 

Businesspeople in the areas are mainly engaged in the manufacturing of motor parts, small components, and spares for vehicles and various industries, which are collectively known as light engineering products.

DCCI President Sameer Sattar mentioned that with the appropriate policy support, the light engineering sector could function as a crucial backward linkage industry for several major local sectors, such as food, leather and footwear, electronics, agro-processing, and pharmaceutical industries.

He also said that in the Industrial Policy 2022, light engineering was recognised as a high-priority sector to provide sufficient incentives to ensure substantial growth of the sector.

To secure the target of private investment at 27.35% of GDP by FY25, the development of the light engineering sector is crucial as it will strengthen local value and supply chains in many allied industries, he added.

The current tariff structure on imports of light engineering products is counterproductive for the growth of the local light engineering sector. In this regard, a study is needed to better understand the needs and bring about appropriate changes in the tariff structure that will protect this sector, he proposed.

SM Shoyeb Hossain Nobel, additional managing director of Walton, presented a keynote paper at the seminar.

He highlighted that the light engineering sector of Bangladesh generates revenue of Tk20,000 crore, contributes about 3% to the GDP, and is increasing at 10% annually. About 16 lakh people are employed in this sector, which meets 50% of the local demand.

In FY22, the export of the light engineering sector was $796 million.

MA Mannan said, "When countries like Korea, Taiwan, Malaysia, and China have achieved success in the light engineering sector, Bangladesh will also succeed in the future, and we are on the right track."

He agreed that there are challenges, but the private sector of Bangladesh is resilient enough to overcome these challenges, and from the government, all possible policy support will be given.

He agreed that inconsistency among government agencies regarding different policies is not good for the private sector.

He also urged for policy consistency and later said that at present, the public-private partnership and relationship are at their best as the government is very business-friendly.

Industries Secretary Zakia Sultana said the government will try to boost policy harmonisation and coordination among the agencies concerned.

The government is also planning to establish an automobile research institute in Narayanganj with the help of Japan.

In the panel discussion session, President of Bangladesh Steel Manufacturers Association Manwar Hossain said, "Now we have to focus on other promising sectors other than the ready-made garment.

"Our investment in human capital is still poor." 

He urged the government to increase cash incentives for this sector.

Mohammad Mesbah Uddin, chief marketing officer at Fair Group, said the light engineering market by the year 2030 will reach $10 billion.

Arshad Huq, managing director at Transcom Electronics, said many global brands want to invest in Bangladesh.