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Mobile phone imports dip as production surges in BD

Published : Monday, 6 February, 2023 at 12:00 AM  Count : 326

Local and foreign brands alike have started reaping the benefits of setting up mobile phone manufacturing plants in Bangladesh by taking advantage of the growing market. The production and sales of "Made in Bangladesh" handsets are increasing rapidly amid a sharp fall in imports.

Locally manufactured handsets from around a dozen small and large factories are meeting the lion's share of the demand for smartphones and feature phones in Bangladesh.

Many top foreign brands have started manufacturing handsets by setting up factories in the country. Some home-grown brands are now leading the local market by producing handsets at affordable prices.
Consumers can buy high and medium-configuration handsets at an affordable price as these are locally made. Moreover, according to sector experts, low-budget customers can also fulfil their desire to use smartphones.

The import and production data of the last few fiscal years show the amount of imports is gradually decreasing, and the amount of manufacturing and assembly of phones in the country is increasing.
However, many phones are still coming to the country illegally. From time to time, entrepreneurs and importers have been saying that the phones brought under the baggage rule are hurting their business.
According to data from Bangladesh Telecommunication Regulatory Commission, imports and local productions were the same three years ago. But imports have gradually fallen as local factories scaled up production.

In the 2021-2022 financial year, out of the total 45 million handsets in the market, the imported sets numbered 10 million. The factories in the country manufactured 35 million sets.

The factories in Bangladesh made approximately 12.91 million handsets in the first half of the current fiscal year. The country imported only 50,000 handsets during this period.

More than 31.47 million mobile phone handsets were manufactured in 2022, while around 306,000 were imported. Imported handsets accounted for less than one percent of the total devices.

Making the most of the government-offered tax and duty benefits under the Made in Bangladesh campaign, local manufacturers are meeting the local demand fully, according to people involved in the sector. Bangladesh is now almost self-reliant in mobile handset production, said Mohammed Mesbah Uddin, chief marketing officer of Fair Electronics, a local partner of the South Korean brand Samsung.

"Not many handsets have been imported in the past six months as local supply has been able to keep up with almost the entire demand."

However, the high price of dollars and the imposition of a 100 percent cash margin for opening letters of credit to control imports are also major reasons for the decline in imports, said industry insiders.

The government introduced the policy in 2017 for production with 30 percent value added in the country.

Tariffs on imported handsets increased under the policy, which encouraged brands to go for local manufacturing and 14 brands, including Samsung, Walton, Nokia, Symphony, Xiaomi, Oppo and Vivo, opened their plants in the country.

A total of 58.6 percent duty, including 25 percent customs duty, 15 percent value-added tax, 5 percent added tax value, 3 percent regulatory duty and 2 percent advance income tax, have been imposed on importing mobile handsets, according to the latest statutory regulatory order data.

On the contrary, the local factories need to pay 18 percent tax, including 10 percent customs duty, 5 percent VAT and 2 percent AIT, for imports necessary for production.

Despite the efforts to introduce full-fledged local production, the factories are making phones by bringing most of the important parts from abroad and assembling them. ome factories have started manufacturing many of these parts locally. Many local manufacturers are also making chargers, casings and other parts. �

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