Bangladesh produces millions of smartphones labelled "Made in Bangladesh," yet the reality behind this achievement is less impressive than it appears. While local factories assemble handsets, almost all key components including processors, display panels, camera sensors, and printed circuit boards are imported. The country has mastered assembly but remains far from becoming a genuine manufacturer.
This transformation began in 2017 when the government introduced favourable tax policies that imposed higher duties on fully built imported phones while offering incentives for importing components. The policy successfully attracted major brands such as Samsung, Xiaomi, Vivo, and Walton to establish assembly plants in Bangladesh. As a result, smartphone prices declined, thousands of jobs were created, and locally assembled devices came to dominate the domestic market.
However, this success has exposed a structural limitation. Bangladesh has developed an assembly industry rather than a manufacturing ecosystem. Industry estimates suggest the country requires around 25-30 million smartphones annually, with locally assembled devices once accounting for more than 85 per cent of demand. Yet an expanding grey market, driven by smuggled and refurbished phones, now captures an estimated 40-50 per cent of the market, depriving legitimate manufacturers of sales and the government of substantial tax revenue.
More importantly, over 90 per cent of the value of a locally assembled smartphone still goes abroad to pay for imported components and intellectual property. Local value addition remains limited to assembly, plastic moulding, packaging and labour.
The reasons are structural. Bangladesh lacks the backward-linkage industries needed to produce sophisticated electronic components. Manufacturing semiconductors, processors, display panels, or advanced circuit boards requires billions of dollars in investment, cutting-edge research, and highly specialised engineering expertise. The country also faces persistent foreign currency shortages that disrupt imports of components, while limited research capacity and weak industry-academia collaboration hinder technological innovation. Regulatory uncertainty further discourages long-term investment in advanced manufacturing.
Moving beyond the "screwdriver economy" requires a comprehensive industrial strategy. The government should strengthen action against the grey market by fully implementing the National Equipment Identity Register (NEIR), encourage investment in component manufacturing through specialised electronics industrial clusters, and expand research in microelectronics and semiconductor technologies. Stronger collaboration between universities and industry is equally essential to develop a skilled workforce.
The current assembly model has played an important role in building Bangladesh's electronics sector. But if the country aspires to achieve genuine technological sovereignty, it must move beyond assembling imported parts and invest in the innovation, research, and industrial capabilities needed to create technology of its own.
Md. Rished Ahmed
Student
Jagannath University
mdrishedahmed@gmail.com
