The country’s mobile manufacturing sector is facing significant hurdles, including difficulties in obtaining letters of credit (LCs), plummeting sales, and the rise of the grey market, according to the vice president of the Mobile Phone Industry Owners’ Association of Bangladesh. The shortage of US dollars has made it challenging to open LCs, leading to a decline in manufacturing. Mobile sales have dropped by over 40% in the first quarter of 2023, exacerbating the situation. This, coupled with a 5% value-added tax (VAT) on sales, has made handsets costlier and contributed to the expansion of the grey market. He emphasizes that a long-term progressive manufacturing policy is necessary to support the industry’s growth and urges the government to consider measures such as the introduction of the National Equipment Identity Register (NEIR) to combat the grey market. Despite the challenges, Bangladesh has the potential to become a global manufacturing hub, attracting brands looking to shift their manufacturing plants from China.
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