Local and foreign brands alike have started taking advantage of the growing market by setting up mobile phone manufacturing plants in Bangladesh. Production and sales of “Made in Bangladesh” handsets are growing rapidly amid a sharp decline in imports.
Locally manufactured handsets from about a dozen small and large factories are meeting the bulk of the demand for smartphones and feature phones in Bangladesh.
Many top foreign brands have started manufacturing handsets by setting up factories in the country. Some indigenous brands are now leading the local market by producing handsets at affordable prices.
Consumers can buy high- and mid-configuration handsets at affordable prices as they are made locally. Apart from this, according to the experts of the sector, customers with low budget can also fulfill their desire of using a smartphone.
The import and production figures of the last few financial years show that the import volume is gradually decreasing, and the volume of manufacturing and assembling of phones in the country is increasing.
However, many phones are still coming into the country illegally. From time to time, entrepreneurs and importers have been saying that phones brought under the goods rule are hurting their business.
According to data from the Bangladesh Telecom Regulatory Commission, imports and local production were about the same three years ago. But imports have gradually fallen as local factories have ramped up production.
In the 2021-2022 financial year, out of the total 45 million handsets in the market, the number of imported sets was 10 million. Factories in the country manufactured 35 million sets.
Factories in Bangladesh made around 12.91 million handsets in the first half of the current fiscal year. The country imported only 50,000 handsets during this period.
Over 31.47 million mobile phone handsets are expected to be manufactured in 2022, while around 306,000 are imported. Imported handsets account for less than one percent of the total devices.
According to people associated with this sector, local manufacturers are fully meeting the local demand by making the most of the tax and duty benefits offered by the government under the Made in Bangladesh campaign.
Bangladesh is now almost self-sufficient in mobile handset production, said Mohammad Mesbah Uddin, chief marketing officer of Fair Electronics, a local partner of South Korean brand Samsung.
“Not much handsets have been imported in the last six months as local supplies have been able to meet almost the entire demand.”
However, industry insiders said that the higher dollar value and imposition of 100 per cent cash margin for opening letters of credit to control imports are also the main reasons for the decline in imports.
The policy made in Bangladesh opened the way
In 2017, the government introduced a policy for 30 percent value-added production in the country.
The policy raised duties on imported handsets, which encouraged brands to localize manufacturing, and 14 brands including Samsung, Walton, Nokia, Symphony, Xiaomi, Oppo and Vivo opened plants in the country.
As per the latest statutory, a total duty of 58.6 per cent including 25 per cent customs duty, 15 per cent value added tax, 5 per cent value added tax, 3 per cent regulatory fee and 2 per cent advance income tax has been imposed on importing mobile handsets. Regulatory Order Data.
In contrast, local factories have to pay 18 per cent tax including 10 per cent customs duty, 5 per cent VAT and 2 per cent AIT for imports required for production.