Bangladesh witnessed a decline in local handset production in 2023, the first drop since domestic manufacturing began in 2017. Factors contributing to the 26.35% YoY decrease include the higher US dollar rate, increased taxes, and weakened consumer purchasing power.
Industry insiders also highlight the expansion of the gray market and supply chain disruptions due to restrictions on opening letters of credit. Handset prices have surged by about 40%, and the industry faces challenges unless consumer purchasing power is restored. Despite global supply chain disruptions in 2021, 2.95 crore handsets were produced, increasing to 3.16 crore in 2022, accounting for 99% of local demand.
However, mobile phone sales plunged by over 33% in 2023, exacerbated by the gray market’s expansion. Industry stakeholders call for government measures, including addressing the gray market and VAT reductions, to revive the sector.