Government Policy

Category: English Published on Thursday, 21 August 2014 Written by Super User

The Ministry of Commerce, Government of Bangladesh has taken a number of steps to create a conducive environment for the Light Engineering Sector. Recently Ministry of Commerce, has set up the Light Engineering Product Business Promotion Council (LEPBPC) with a view to:

  • Promote and facilitate export of Light Engineering products & services in Bangladesh.
  • Encourage and assist in the balanced development of Light Engineering products & services.
  • Set up a Common Facility Center for testing, training, standardizing and certifying Light Engineering products and services.
  • Edit, print and publish journals, brochure and sales materials for business promotion.
  • Promoting market surveys, export, joint ventures and collaborations, engineering consultancy and studies.
  • Developing linkages with different Institutions/Enterprises, nationally and internationally, promoting participation and aiding the development of human resources required by the Light Engineering Industries.

In the Export policy 2003-2006, the Government of Bangladesh had identified the following five sectors to have the High Priority: Light Engineering Products (including auto-parts and bi-cycles), Software & ICT products, Agro-products & Agro-processing products, Leather goods and High value-added readymade garments.

The Export Policy promises the following support to sectors of High Priority:

  • Supply of investment credit at reduced rate on high priority basis,
  • Moratorium on income tax,
  • Various cash assistances,
  • Export credit on easy terms and reduced rate of interest,
  • Subsidized rate for Air Transportation,Duty drawback and bond facilities,
  • Assistance for establishment of related industries including infrastructure development for reducing the cost of production,
  • Institutional and technical assistance for improving quality of products and giving quality assurance,
  • Assistance for market access,
  • Assistance in scoping foreign markets
  • Cooperation for foreign investment.

In Bangladesh, various reform measures have yielded macro-economic gains in cutting down fiscal and current account deficits, improving balance of payment, reducing external dependence for development programs, and maintaining healthy foreign exchange reserves and containing inflation rates. The Government believes that the key to sustained economic growth lies in investing in infrastructure and human resource development. This requires enormous capital. As in most developing countries, insufficient capital formation is the major constraint in Bangladesh as well. Therefore, in order to attract direct foreign investment the Government has offered one of the most liberal investment incentive packages to foreign investors. This includes:

  • Foreign investment up to 100% is allowed with no restriction on repatriation of capital including capital gains.
  • Tax holiday for 10 years, exemption on income tax on salaries of technicians for 3 years, complete exemption from dividend tax during tax holiday period, duty free import of machineries and raw materials and exemption of income tax on interest on borrowed capital.
  • Availability of developed land and infrastructure facilities including road, electricity, gas, telephone, water supply and banking and insurance facilities, are ensured in the Export Processing Zones.

Bangladesh with a large and adaptive workforce is well positioned having close proximity to the large market of the South Asian countries, constituting one-fifth of the world population on the one side and the fast growing vast market in South East Asian countries on the other.
Bangladesh can provide a low cost production base in several sectors like light engineering industries, agro-based industries, food processing and preservation, development of poultry, dairy, fisheries and livestock, leather, rubber based industries, textiles and infrastructure development.

China and Bangladesh, two friendly neighboring countries, have been enjoying stable and healthy mutual relations ever since the establishment of diplomatic relations - with great achievements in trade and economic cooperation and exchanges. In recent years with personal concern and support from leaders from both countries, mutual trade and economic cooperation have gained momentum for further development and this is also the result of the involvement of enterprises of the two countries.

The business enterprises in Bangladesh are eager to increase cooperation in trade and investment with the Chinese. Bangladesh Engineering Industry Owners? Association (BEIOA), the representative trade organization of Light Engineering sector in the country will extend all support and cooperation to increase trade deals and investment in Bangladesh. Until formal relationship is established with the counterpart private sector organization in China, BEIOA will with Chinese Embassy in Dhaka to assist necessary contacts and interaction.

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