Bangladesh Industrial Policy 2020 Overview
Bangladesh industrial policy is anchored by the National Industrial Policy 2016 (NIP 2016), with the core objective of increasing manufacturings share of GDP from 21% in 2020 to 30% by 2030. The strategy is to shift from reliance on one dominant export sector, Ready-Made Garments (RMG), to a diversified industrial structure including automotive, shipbuilding, electronics, pharmaceuticals, and agro-processing. In 2020, manufacturing contributed about USD 68B, around 21% of total GDP, while employing roughly 5M people directly.
Industrial infrastructure is expanding through BEZA, the Bangladesh Economic Zones Authority, which plans to establish 100 economic zones; 12 were already operating by 2020. BEPZA, the Bangladesh Export Processing Zone Authority, managed 8 EPZs with 520 firms. Incentives for foreign investors include up to 10 years of tax holidays, 100% foreign ownership, and free repatriation of profits. Yet land acquisition, power and gas reliability, and administrative inefficiency remain practical bottlenecks. For Korean firms, opportunities include the Mirsarai Korean zone, downstream joint ventures, and industrial park development participation.
NIP 2016 Framework
NIP 2016 defines seven priority sectors. 1) RMG upgrading: deepening backward linkages of raw fabric and accessories, shifting toward higher value apparel. 2) Agro-processing: raising food processing share from 2% to 20% as an export diversification lever. 3) Pharmaceuticals: moving from 97% domestic sufficiency toward export growth, including stronger active pharmaceutical ingredient (API) localization. 4) Shipbuilding: expanding from inland small-boat assembly toward export-oriented shipbuilding. 5) ICT: targeting USD 5B software and BPO exports, with 28 high-tech parks under designation. 6) Light manufacturing: upgrading leather, footwear, furniture, and plastics exports. 7) Automotive: progressing from CKD/SKD assembly toward greater parts localization. SMEs account for nearly 99% of business entities and 25% of GDP, so financing access and technological upgrading for SMEs are central to broadening industrial foundations.
| Sector | GDP Share | Exports ($M) | Employment (10k) | FDI | Policy Target | Notes |
|---|---|---|---|---|---|---|
| RMG Apparel | 12% | 27,900 | 400 | Limited | Higher value exports | 84% of exports |
| Food Processing | 2.5% | 800 | 50 | $200M | 16% processing target | Agri linked |
| Pharmaceuticals | 1.5% | 170 | 15 | $100M | API localization | TRIPS transition |
| ICT/Software | 1.1% | 1,300 | 50 | $300M | $5B export target | High-tech parks |
| Shipbuilding | 0.5% | 250 | 10 | $50M | Export shipbuilding | Domestic to export transition |
| Leather/Footwear | 0.8% | 1,000 | 30 | $150M | Green conversion | Relocation from Savar |
| Automotive | 0.3% | 50 | 5 | $100M | Parts localization | CKD assembly base |
| Total | 21% | $34B+ | 560 | $2.6B | GDP 30% goal | 2030 target |
Economic Zones and Industrial Infrastructure
BEZA and BEPZA are the two main pillars of Bangladesh industrial infrastructure. BEZA, established in 2010, is building 100 zones with Mirsarai BSMSN (33,000 acres) as the largest development project. Mirsarai also includes plans for 500 acres dedicated to Korean industry. BEPZA, founded in 1983, now operates 8 mature EPZs with 520 firms and exports around $7.5B, creating roughly 500,000 jobs. For Korean companies, incentive depth is significant: 10-year tax holidays, duty and VAT exemptions on imported inputs, full profit repatriation, and 100% foreign ownership. Land clearance and utility reliability (power, gas, water) are still key constraints.
Korean Manufacturing Opportunities
Bangladeshs 2020 industrial policy moved from an RMG concentration model toward seven-pillar diversification and manufacturing expansion. The BEZA roadmap to 100 economic zones is the physical backbone. Korean firms can immediately engage in four areas: Mirsarai Korean park development, RMG backward-linkage investments, automotive/electronics assembly, and industrial infrastructure projects. Combined tax and customs incentives can keep effective costs low, while land and utility constraints remain the main execution risks. With disciplined policy execution, Bangladesh can become a plausible alternative manufacturing hub to larger regional options.