Govt plans electronics manufacturing incentives to make country global tech hub

The government has announced plans to provide the electronics and consumer electronics manufacturing sector with long-term incentives and policy support ,similar to those enjoyed by the garment industry, to transform Bangladesh into a global tech hub by 2030.

The initiative forms one of the four key pillars of the government's strategy for the ICT and telecom sector. The other pillars are - connectivity, digital public infrastructure (DPI), and data centres and artificial intelligence (AI), said Finance Minister Amir Khosru Mahmud Chowdhury in this budget speech delivered in parliament on Thursday (June 11).

According to the plan, the electronics and consumer electronics manufacturing sector will receive "every single benefit" currently available to the garment sector for the next 10 years. 

The policy is aimed at creating a favourable environment for investment, manufacturing and exports in the technology sector.

Explaining the rationale behind the initiative, the minister said the government intends to replicate the measures that contributed to the growth of the garment industry since 1978. The approach was described as following the same model that helped the sector flourish over the decades.

The proposed support package includes zero percent tax on raw materials, options for zero value addition and financial incentives for exports. These measures are expected to serve as key ingredients in building a competitive electronics manufacturing industry in Bangladesh.

The finance minister also announced a gradual reduction in tax rates for the sector over the coming years. He said the tax rate will be reduced over next 5 to 10 years.

The electronics and consumer electronics manufacturing initiative is part of a broader roadmap designed to strengthen the country's digital economy and technology ecosystem.

As part of the policy formulation process, the government held consultations with a wide range of stakeholders, including freelancers and content creators, to determine the steps needed to ensure the country's future success. Inputs and recommendations gathered during those consultations were meticulously reviewed and incorporated into the budget presented by the finance minister.

The connectivity pillar of the strategy focuses on a robust rollout of 5G services across the country and the provision of international-standard Wi-Fi facilities.

Under the digital public infrastructure pillar, the government plans to introduce a digital ID and a digital wallet for every citizen. The initiative is intended to strengthen the country's digital foundation and expand access to digital services.

The roadmap also prioritises the development of data centre infrastructure and the opening of API access to support startups and innovators. The measures are aimed at creating an environment that encourages innovation and technological development.

Highlighting the long-term vision behind the strategy, the finance minister further said that with consistency and the right policy framework in place over the next three to five years, Bangladesh has the opportunity to emerge as a global tech hub by 2030.

The proposed incentives for electronics and consumer electronics manufacturing, together with investments in connectivity, digital infrastructure, data centres and AI, have been identified as central components of that vision.

Outlining the government's long-term vision, Prime Minister's Adviser on the Ministry of Posts, Telecommunications and Information Technology Rehan Asif Asad said Bangladesh could become the world's ninth-largest consumer and digital economy by 2029. He referred to studies conducted by BCG and other organisations.

"We have to prepare ourselves. We have to get ourselves ready," he said.

He said work would begin next month on establishing Bangladesh's first Digital Public Infrastructure (DPI), which would include a "one citizen, one digital ID, one digital wallet" framework.

Under the initiative, every citizen would have access to a digital identity and be connected to the digital economy through a digital wallet.

The adviser said the government also intends to develop data centre infrastructure and promote the use of artificial intelligence while opening digital platforms to innovators and startups.

He said the government's role would be to create the ecosystem while allowing the private sector and innovators to develop applications and services.

"No government, no country in the world can deliver that. The government will create the ecosystem and the private sector will innovate," he said.

Rehan said the fourth pillar of the government's strategy is the development of the electronics and consumer electronics industries.

According to him, the electronics and consumer electronics sectors will receive the same benefits for the next 10 years to encourage investment and manufacturing growth.

The adviser expressed confidence that with policy consistency and sustained support, Bangladesh could emerge as a global player by 2030.

He said the government would continue working closely with telecom operators, vendors, innovators, investors and regulators to advance the country's digital transformation agenda.

"We need to do it together as partners," he said, assuring stakeholders that the government would remain open to their views and committed to supporting the sector's development.

The Fiscal Year 2026-27 budget includes a series of fiscal incentives to boost electronics, digital device and semiconductor manufacturing. Duty exemptions on raw materials for products such as mobile phones, refrigerators, air conditioners, washing machines, CCTV cameras, computers and other digital devices have been extended until June 30, 2030.

To support the semiconductor industry, raw materials used for chip design, testing and packaging will be exempted from regulatory duty, supplementary duty, VAT and advance tax, with only a one percent import duty applicable until June 30, 2031.

The budget also extends conditional VAT exemptions for mobile phone manufacturing and assembly, as well as computers and technology products, until June 30, 2030. VAT on locally manufactured refrigerators, freezers, air conditioners and compressors has been reduced from 15 percent to 7.5 percent for the same period.

In addition, the Advance Income Tax rate on 22 raw materials used in mobile phone manufacturing has been cut to one percent, while an additional 5 percent import duty on key raw materials for smart card and bank card production has been waived.