Over the past few decades one industry is making a significant difference, often hailed as the
“mother of all industries”. An industry, which in Bangladesh emerging as a powerful engine of
growth, innovation and job creation. We are talking about the light engineering industry of
Bangladesh. This particular industry is playing a crucial role in supporting a wide range of
industries namely, automotive, electronics, agriculture and construction.

A Sector to Look Out For

Comprising with over 80,000 factories and employing approximately 1 million people the light
engineering sector contributes significantly to both domestic needs and export earnings. As of the fiscal year 2023-24 the light engineering sector has generated 486.75 million dollars in
export earnings. Positioning itself strongly as the seventh largest export earning sector.
Currently the domestic market holds a huge growth potential as its estimated domestic market size is 12 billion dollars and local manufactures are currently meeting only 50% of the total demand.

Sub Sectors On the Rise

Several sub sectors within the LES are looking exceptionally promising
Bicycles: With 80% of the products going to major European markets like Germany, Austria and the UK the exports of the bicycle sector reached 82.5 million dollars in fiscal year 2023-24. The local demand is also soaring with 1.5 million units sold annually and a projected staggering 30% growth rate.

Electrical and Electronics Goods: Major global and local brands such as Samsung, LG, Walton and Singer are assembling televisions, refrigerators and other home appliances in Bangladesh. This sub sector has earned 149.5 million dollars in export revenue, currently growing at 21.53% year on year.

Automobiles: 99% of motorcycles sold in Bangladesh are now either assembled or
manufactured in Bangladesh. As the government is promoting electric vehicle (EV) production and export initiatives, the market is expanding at a rapid pace.

Batteries: Since the demand for EVs and electronic devices is continuously rising the battery market is valued at 1.23 billion dollars which projected to hit 1.54 billion dollars by the year 2032.

Competitive Advantage

Bangladesh has a low labor cost, which gives the country the strongest advantage. The average monthly wage in Bangladesh is lower than its neighboring countries like India, China or Indonesia. As per JETRO survey 2023, this cos effective labor has made Bangladesh one of the top three most profitable locations for manufacturing in Asia. The country’s young and tech savvy workforce- with over 2.3 million new workers joining the labor force each year- offers an unparalleled demographic advantage. With 70% of the population under 40 and a literacy rate of 77.9%, Bangladesh is well positioned for long term industrial growth.

Policy Support and Opportunities

The Government of Bangladesh has taken several policies which is encouraging growth in the sector. Initiatives such as:

• Income tax exemptions
• Rationalized tariffs
• Long term low interest loans
• Export Readiness Fund (from EC4J – Backed by World Bank)
• Specialized training in sustainability and compliance
• Development of technology centers and Light Engineering Clusters near Dhaka

Moreover, Bangladesh enjoys a unique duty free access to a lot of major markets such as the EU, UK, Japan and Canada. Which provides a significant boost in global competitiveness.

With abundant resources, proactive policies and a competitive workforce, the Light Engineering Sector of Bangladesh is poised to evolve into a world class manufacturing and export hub ensuring jobs, innovation and sustainable economic growth.