Industry leaders urge dedicated industrial park for light engineering sector

Highlights:

• Speakers also urged considering tax and VAT issues
• Ideas were sought to make sector alternative to RMG
• BIDA roadmap says light engineering sector has highest potential
• Industrial park would help sector become internationally competitive

The Bangladesh Engineering Industry Owners' Association (BEIOA) has urged the government to establish a dedicated industrial park for the country's light engineering sector – similar to the Savar Leather Industrial Park, where entrepreneurs were provided plots at subsidised rates.

"We have long demanded a dedicated industrial park to unlock the immense potential of this sector," BEIOA President Md Abdur Razzaque said at the inauguration of the Bangladesh Light Engineering Expo 2025, held today (29 May) at the Shahid Abu Sayed International Convention Centre Auditorium in the capital.

He added, "We also need policy support and tax exemptions on the import of raw materials."

Speakers at the event highlighted that a dedicated industrial zone would enable manufacturers to set up compliant, globally competitive factories. They also urged the government to address tax and VAT issues, and to provide adequate policy and infrastructure support.

The two-day expo, jointly organised by BEIOA and the Export Competitiveness for Jobs (EC4J) Project under the commerce ministry, features 27 industrial enterprises showcasing local engineering products, services, and technologies.

The light engineering sector in Bangladesh comprises five major sub-sectors – moulds, electrical and electronics, agro-machinery, foundry, and bicycles – and supplies essential engineering products to almost all other industries.

Govt eyes export potential

Commerce Secretary Mahbubur Rahman, who attended the event as chief guest, emphasised the importance of shifting focus toward engineering and technology-based exports.

"Bangladesh needs to prioritise exports in engineering and technology, and the light engineering sector can play a key role in this transition," he said. 

The commerce secretary added that Bangladesh is currently facing reciprocal tariffs from the United States and struggling with a $6 billion trade deficit. "In FY2021-22, light engineering exports stood at around $700-800 million, but have since dropped to $400-500 million," he noted.

Although allocating separate land for the light engineering sector may be challenging, Commerce Secretary Mahbubur Rahman assured that the government would seriously consider it, acknowledging the sector's significant potential. 

He suggested that light engineering could eventually serve as an alternative to Bangladesh's dominant ready-made garment industry.

Citing global trends, the commerce secretary pointed out that Vietnam earns a substantial share of its export income from engineering and tech products, whereas Bangladesh remains heavily reliant on garments.

Global market focus

Hosne Ferdous Sumi, senior private sector specialist at the World Bank and task team leader of the EC4J Project, stressed the need for integrating the sector into global value chains. "There is room for both innovation and diversification," she said.

FBCCI Administrator Hafizur Rahman called the sector a potential "game-changer," referencing the BIDA roadmap that identifies light engineering as having the highest growth prospects. He urged for more supportive tariff and tax policies.

Abdur Rahim Khan, EC4J project director, cited coordination and policy gaps as major hurdles. Commercial counsellors from several countries also recommended focusing on niche sub-sectors to boost competitiveness and unlock global market access.