Policy inconsistency puts local electronics investment at risk: Walton MD

Policy inconsistencies, tariff distortions and discrimination in state procurement threaten investment in Bangladesh's domestic electronics sector, Walton Hi‑Tech Industries Managing Director SM Mahbubul Alam has said.

Without urgent reforms, both local and foreign investment as well as national export ambitions will face major setbacks, he said at an industry dialogue at Bida headquarters in Agargaon, Dhaka, today (4 December).

He said current SROs have failed to draw effective distinction between importers, assemblers and manufacturers, despite differences in value addition at each stage. 

He added, "Absence of policy recognition for domestic value addition erodes investor confidence and pushes long-term investment into uncertainty."

To illustrate tariff distortions, he cited the example of glass shelves used in refrigerators. Finished or semi-finished imports arrive duty-free, but materials for local manufacturing face tariffs as high as 45%. 

He said this imbalance directly discourages domestic manufacturing and risks steering the country back towards import reliance.

The Walton MD also criticised procurement categories under state purchasing frameworks. "Public Procurement Rules and listings of Public Works Department, foreign brands are placed in 'A' category and domestic brands in 'B' category."

He added that local air conditioners, lifts and cables meet global standards and are exported to multiple regions, yet face obstacles to even participate in tenders at home, calling practice unjust.

Mahbubul highlighted competitive disadvantages within South Asia due to non-activation of the SAFTA Agreement. "Bangladesh must pay 20% duty on AC exports to Sri Lanka and 5% on fridge exports, while Indian firms export the same goods there at zero duty under SAFTA-Plus benefits." 

He cautioned that the rapidly growing electronics sector will face severe pressure on investment and exports unless urgent policy reforms, rational tariff structures and equal access to government procurement are ensured.