Lack of confidence that Bangladesh can produce quality exportable engineering and electronic products was also holding back its potential
Absence of real-time information on market demand, supply gap, access to low-cost fund, and globally accredited certification authority, among others, were identified by experts at a seminar as major bottlenecks to expand export portfolio of the country’s light engineering sector.
Lack of confidence that Bangladesh can produce quality exportable engineering and electronic products was also holding back its potential of increasing export earnings.
Bangladesh needs to set up a competent authority, whose certification would be recognized globally, provide cash incentive, organize single country trade shows, and offer duty-free facility for importing raw materials, they surmised.
These were suggested to raise export earnings, especially to the UK. The country has introduced preferential Developing Countries Trading Scheme (DCTS) this year, marking its departure from the European Union’s Generalized System of Preference (GSP).
The observations and recommendations came at a stakeholders’ consultation titled “Expanding Exports to the UK Market: Light Engineering Products.”
Research and Policy Integration for Development (Rapid) and UKAID jointly organized the event on Wednesday.
As part of the study, Rapid identified several potential export sectors for the UK market.
Local leather and footwear and light engineering sectors are among the most prominent ones to unleash their export potential.
Presenting his keynote, Rapid chairman MA Razzaque said the UK DCTS can be a game-changer for Bangladesh to break into non-RMG export sectors, including various light engineering products.
Explaining the DCTS, he said after Bangladesh’s LDC graduation in 2026, the country will continue to enjoy the same benefits for three more years until 2029.
As an LDC, Bangladesh also stands to benefit from more generous UK Rules of Origin (RoO) requirements, as the minimum value-addition requirement for the LDCs has been reduced from 30% to 25%.
The UK DCTS offers relaxed and liberal product-specific rules, and extended cumulation facilities, allowing inputs to be imported from 95 countries, and yet the LDC manufacturers of final products are eligible for duty-free exports, he noted.
Citing Bida statistics, he said there are about 40,000 light engineering companies here, employing around 600,000 workers.
Bangladesh fetched $796 billion in last fiscal from export of their products.
In 2021, Bangladesh’s export of light engineering products to the UK was only $56 million against the country’s overall import of such products over $327 billion.
Of the $56 million export earning, $51 million came from bicycle goods, holding a 10% share in the UK’s $516-million market, he added.
Speaking there, MMA Tanvir Titash, chief executive officer of Meghna Group, focused on bridging the gap between local exporters and UK buyers by organizing trade fairs.
Titash, also president of the Bangladesh Bicycle and Parts Manufacturers and Exporters Association (BBPMEA), stressed for introducing alternative of REX (registered exporter), a system of certification of origin of goods — based on a principle of self-certification followed by the EU, saying they are facing difficulties.
