Policy consistency vital for growth of light engineering sector

Research, innovation and policy consistency are key to fostering the growth of the light engineering sector, currently accounting for 3 per cent of the country's GDP, speaker at a seminar said on Thursday.

They said the light engineering sector is now facing various challenges, including policy inconsistency, lack of easy access to finance, quality of products, lack of lab and R&D (research and development) and data of actual demand.

Dhaka Chamber of Commerce & Industry (DCCI) organised the seminar titled 'Import Substitute Industry in Bangladesh: Perspective of Light Engineering Sector' held at the DCCI Bhaban in the city, reports UNB.

Addressing the function, Planning Minister MA Mannan said if Korea, Taiwan, Malaysia and China could successfully develop the light engineering sector, Bangladesh will also be able to succeed in the future.

Inconsistency among the government agencies regarding different policies is not good for the private sector, he said, laying emphasis on policy consistency.

"If we can formalise the small light engineering hubs at Dholaikhal and Jinjira, one day they will be able to contribute to the economy," said the minister.

Industries Secretary Zakia Sultana said Bangladesh's light engineering sector is still import-based. The light engineering sector is an untapped sector, which has great prospects of creating a large backward linkage industry ensuring diversified industrial base.

Noting that the entrepreneurs of this sector should be incentivized to mitigate import reliance, she said the government will try to boost policy harmonization and coordination among the agencies concerned.

The industries secretary said the government is also planning to establish an Automobile Research Institute in Narayanganj with the help of Japan.

DCCI President Barrister Md. Sameer Sattar said if right policy support is given, the light engineering sector can serve as the backward linkage industry to many mainstream local industries such as food, leather and footwear, electronics, agro-processing and pharmaceuticals industries.

"To secure the target of private investment to 27.35% of GDP by FY 2025, development of the light engineering sector is crucial as it will strengthen local value and supply chain in many allied industries," he said, noting that the light engineering sector was recognized as a high-priority sector in the Industrial Policy 2022.

He, however, said the current tariff structure on import of light engineering products is counter-productive for the growth of the local light engineering sector.

The DCCI president urged the authorities concerned to bring about appropriate changes in the tariff structure that will protect this sector.

Additional Managing Director of Walton SM Shoyeb Hossain Nobel, in his keynote paper, said the light engineering sector contributes about 3 per cent to the GDP and it is growing at 10 per cent every year.

"In FY 2021-22, the export of light engineering sector was worth $796 million," he said.

Citing that this sector is completely import-based, he demanded separate duty structure and backward linkage industry policy for this sector.

"Lack of easy access to finance, quality of products, demand uncertainty, policy inconsistency, no incentives for local manufacturers, lack of lab and R&D, data of actual demand are few of the challenges of this sector," he said.

President of Bangladesh Steel Manufacturers Association Manwar Hossain said now attention should be given to other promising sectors alongside the readymade garment one.

Chief Marketing Officer of Fair Group Mohammad Mesbah Uddin emphasized on proper policy guidelines, upgrading science and technology-based education system and maintaining long-term policy consistency to unlock the potentials of this sector.