Known as the “mother of all industries” Bangladesh’s light engineering sector stands at a strategic crossroads. This sector provides essential tools, components and machineries to a broad spectrum of industries such as automobiles, agriculture, construction and electronics. Which makes this sector a crucial engine of industrial progress. Hence the name, mother of all industries.
Thriving Domestic Market
With a staggering 12 billion dollars’ worth of local market, the local manufacturers are only meeting 50% of the total demand. This gap highlights a major opportunity for domestic manufacturers to upscale operations and reduce dependency on imports.
This sector comprises of 80,000 enterprises amongst which 60,000 are micro and 20,000 small and medium sized businesses. Together these enterprises are ensuring employment for more than 1 million people. The sector is deeply integrated into the country’s supply chain as it produces everything from automobile parts and construction tools to power transformers and electronic goods.
A standout area is perhaps the motorcycle assembly, with 99% of the motorcycles now manufactured or assembled in Bangladesh. Due to governments emphasis on Electric vehicles the demand for rechargeable batteries is growing continuously which in result accelerating the need for domestic battery production, a market valued at 1.23 billion dollars in 2024 and projected to reach 1.54 billion dollars by the year 2032.
Expanding Global Footprint
Bangladesh’s Light Engineering Sector (LES) earned 486.75 million dollars in export revenue in the fiscal year 2023-24. Which positions it as the seventh largest export earning sector of the country.
With 80% of shipments destined for the EU, particularly Germany, Austria and the UK, the bicycle industry alone has also generated 82.5 million dollars in exports. Local companies are now manufacturing a variegated range of bikes from mountain bicycles to children’s bicycles.
Another segment which is showing robust export growth is the electrical and electronics segment. International brands like Samsung, LG, Nokia and VIVO are all assembling products here in Bangladesh. With a staggering 21.53% growth rate in FY 2023-24, export revenue from this segment reached 149.5 million dollars.
Strategic Advantages
Bangladesh enjoys several structural advantages:
- Low Labor cost
- Young skilled workforce
- Duty free access to major markets
- Locally available raw materials
Policy Support
Under the EC4J project the government provides:
- Tax Exemptions
- Long term low interest loans
- Export Readiness Fund
- Technology access and specialized trainings
With increasing global demand, rapidly growing domestic market and strong policy backing, Bangladesh’s LES holds the key to industrial diversification and export expansion. Soon, Bangladesh will become a global sourcing hub. Which will fuel innovation, create employment and ensure sustainable development.
