The hum of machinery in factories across Gazipur, Narayanganj and other industrial hubs tells the story of Bangladesh's quiet revolution in mobile handset manufacturing.
Once almost entirely reliant on imports, the country has, within a remarkably short span of time, emerged as a noteworthy player in the global electronics supply chain.
Such a breakthrough in manufacturing and assembling of mobile-phone handsets has been possible due to an ambitious policy, rapid technological evolution and staying in the market competition despite the persistent economic challenges.
Only a few years ago, the idea of marketing smartphones inscribed with "Made in Bangladesh" seemed a distant dream. The domestic market was dominated by imported devices, resulting in a significant outflow of foreign currencies.
Keeping such a situation in view, the government took a bold move a few years back to develop a domestic manufacturing ecosystem.
Through targeted tax incentives and supportive regulations, it paved the way for a business-friendly environment for encouraging investment in this sector.
Local pioneers such as Walton came up to grab the opportunity, establishing sophisticated production facilities.
They were soon joined by global giants, according to the sector insiders.
Samsung partnered with Fair Electronics, while Chinese brands including Oppo, Vivo, Realme, and Xiaomi set up assembly and manufacturing plants. Even Nokia entered the fray through its collaboration with Vibrant Software, they observed.
This strategic shift gave an impetus to the sector's growth, it was learnt.
According to the industry operators, by the fiscal year 2020-2021 the results were striking as more than 41 million handsets entered the market, of which an estimated 63 per cent or more than 25.9 million units were assembled or manufactured in Bangladesh.
Such efforts continued with local production reportedly meeting around 99 per cent of official market demand in 2022.
The vision of a technologically self-reliant Bangladesh began to crystallise, creating thousands of jobs and nurturing domestic expertise.
Data from the Bangladesh Telecommunication Regulatory Commission (BTRC) reveal a continued reliance on feature phones.
For example, an approximate 2.27 million handsets were produced locally in March 2025, about 68.51 per cent of them were feature phones.
These remain vital in rural and low-income communities due to the affordability as well as simple and easy use.
Smartphones, despite having their growing demand, accounted for the remaining 31.49 per cent.
Such a ratio reflects Bangladesh's ongoing digital transition. While 2G and 3G handsets still, particularly in the feature phone segment, demand for 4G devices has surged alongside the expansion of high-speed mobile internet.
The emergence of 5G, however, remains in its infancy. In January 2025, for instance, some 850 units of 5G handsets were imported, 11 of them were smartphones-indicating a nascent but growing appetite for advanced connectivity.
Despite making commendable progress, the industry is grappling with significant headwinds.
In 2023, handset production fell by 26.35 per cent year-on-year to 23.3 million units-the first such decline since the beginning of local manufacturing.
The downturn had persisted through 2024, with production reaching a 17-month low in May 2024.
Manufacturers have attributed such a fall in the domestic production to their availability in the grey market.
This shadow market of illegally smuggled and unregistered handsets has become a major threat to legitimate manufacturers, according to them.
These unauthorised or illegal devices bypass taxes and regulatory checks, allowing them to be sold at significantly lower prices.
As a result, they undercut official products, erode profits, and deprive the government of substantial tax revenue. Industry estimates suggest the grey market now comprises 35 to 40 per cent of total handset demand-a staggering figure, they observed.
The National Equipment Identity Register (NEIR) system, intended to block unauthorised devices, has struggled with implementation delays and enforcement challenges, allowing this illicit trade to thrive.
The recent initiative to resume the NEIR to block illegal handsets also was thwarted by some industry players.
Persistently higher inflation in the past few months eroded consumers' purchasing power, rendering mobile phone upgrades a luxury for many.
The devaluation of Bangladesh Taka (BDT) against the US dollar has further raised the cost of imported components and raw materials, squeezing margins and straining operations, according to the insiders.
Recent revision of the tax policy has been blamed also. Increases in Value Added Tax (VAT) on locally-made and partially locally-made components, as well as across the supply chain have inflated the end prices of locally-assembled phones.
This has further compromised their competitiveness against untaxed grey market alternatives.
While the sector faces undeniable challenges, its foundational ambition remains intact.
Locally manufacturing of mobile handsets has not only reduced their import dependence, but also created employment and played a vital role in Bangladesh's digital transformation.
To give the industry a further momentum, several strategic issues should be addressed, according to the industry operators.
Firstly, there is a need for full and effective implementation of the NEIR system, which is essential to curb the grey market and ensure a level-playing field, according to them.
Secondly, re-evaluation of the tax structures is needed to ensure the economic viability of the local manufacturing sector.
Lastly, a congenial business atmosphere and a stable political environment are also necessary for the sector's further growth, they said.
If these issues are not resolved, the vision of exporting "Made in Bangladesh" smartphones and contributing meaningfully to the government's $5 billion ICT export target by 2025 would remain a far cry.
bdsmile@gmail.com
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