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Develop light engineering to meet investment-GDP ratio targets
DCCI president tells seminar
STAR BUSINESS REPORT
The light engineering sector’s development is crucial for meeting the investment-GDP ratio target of 27.35 percent by fiscal year 2024-25, said DCCI President Md Sameer Sattar yesterday.
The development will strengthen local value and supply chains for many allied industries, he said.
The sector also needs to be recognised as a high-priority one in National Industrial Policy 2022 so that sufficient incentives can be provided to ensure substantial growth, he said.
With the right policy support, the sector can serve as the backward linkage industry for many mainstream local industries such as that of food, leather and footwear, electronics, agro-processing and pharmaceuticals, he added.
There is a lot of potential in this sector, Sattar told a seminar styled “Import Substitute Industry in Bangladesh: Perspective of Light-Engineering Sector” organised by the Dhaka Chamber of Commerce and Industry (DCCI) at its office in the capital.
The current tariff structure on the import of light engineering products is counterproductive for the sector’s growth, he said.
A study needs to be conducted to further know about the sector’s needs and bring appropriate changes to the tariff structure to protect the sector, he said.
If the light engineering sector of South Korea, Taiwan, Malaysia and China can attain success, Bangladesh’s one can do so too. “We are on the right track,” said Planning Minister MA Mannan.
There are challenges but Bangladesh’s private sector is resilient enough to overcome those and all possible policy support will be provided from the government, he assured.
Inconsistencies among the government agencies regarding different policies does not fare well for the private sector, he agreed. Bangladesh’s light engineering sector is still reliant on imports, said Zakia Sultana, secretary to the Ministry of Industries.
The light engineering sector is untapped and has great prospects of creating a large backward linkage industry to ensure a diversified industrial base, she said.
The government will try to boost policy harmonisation and coordination among the agencies concerned, she said, adding that capacity building, skills development and curriculum upgradation were also necessary.
On another note, she said the government was planning to establish an automobile research institute in Narayanganj with the help of Japan.
The sector is generating annual revenues of Tk 20,000 crore and contributing about 3 percent to the GDP, which is increasing by 10 percent every year, said SM Shoyeb Hossain Nobel, additional managing director of Walton, in a keynote paper.
Highlighting the import dependency, he recommended a separate duty structure and backward linkage industry policy for the sector.
A lack of easy access to finance, laboratories, research and development, demand data and quality products, demand uncertainties, policy inconsistencies and absence of incentives are a few of the sector’s challenges, he said.
Bangladesh’s consumer market is ready and many global brands want to invest here, such as US company Whirlpool which invested to form a joint venture, said Arshad Huq, managing director of Transcom Electronics Limited.
He laid emphasis on maintaining product quality, policy consistency and developing human resources.