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Bangladesh IT Outsourcing Industry 2020: Software Export and Digital Growth Analysis

Bangladesh IT Outsourcing Industry Overview

Bangladesh IT and software are expanding rapidly under the Digital Bangladesh vision. In 2020, ICT export value reached USD 1.2 billion, making this the third-largest export sector after RMG and leather. Growth has exceeded 20 percent on an annual basis, and Bangladesh is ranked as the second largest supplier country on global freelancing marketplaces. Core growth drivers are Hi-Tech Park development and labor-cost competitiveness.

USD 1.2B
ICT Exports
FY 2020
+22%
Growth Rate
5-year CAGR
4,500
IT Firms
BASIS registered
650,000
Freelancers
2nd globally
300,000
IT Employment
regular staff
28
Hi-Tech Parks
planned/operating

Breakdown of IT Exports

Bangladesh IT Export Segments (2020)
SegmentExport ValueShareGrowthKey Markets
Software developmentUSD 420M35%+25%United States / Europe
IT services (BPO)USD 280M23%+18%United States / United Kingdom
FreelancingUSD 240M20%+30%Global
Web and mobile appsUSD 150M13%+28%United States / Europe
Data processingUSD 70M6%+15%Japan / Australia
Other (games / AI)USD 40M3%+40%Global

Freelancing shows the strongest momentum, with 30 percent growth and growing visibility of Bangladeshi developers on Upwork and Fiverr. Game and AI segments are emerging as additional high-potential domains with 40 percent growth.

Hi-Tech Park versus Standard IT Firms

Companies in Hi-Tech Parks
Corporate tax10-year exemption
Tariff regimeduty-free equipment imports
Infrastructurededicated power and internet
Representative locationsKaliakoir / Jessore
Standard IT Firms
Corporate taxpartial exemption until 2024
Tariff regimestandard duties apply
Infrastructureprocured internally
ConcentrationDhaka Motijheel / Gulshan
01
Digital Bangladesh and IT Policy
The Digital Bangladesh vision announced in 2009 positions IT as a national growth engine. Main policy pillars include: (1) expansion of 28 Hi-Tech Parks such as Kaliakoir, Jessore, and Mohakhali, (2) corporate tax exemption for IT exports until 2024, (3) international bandwidth expansion through SEA-ME-WE 4 and SEA-ME-WE 5 cables, and (4) one-stop support by BHTPA, the Hi-Tech Park Authority. In 2025, the government set a USD 5 billion IT export target.
02
COVID-19 and the Remote Work Effect
In 2020, the pandemic had a relatively positive impact on Bangladesh IT. Global demand for remote outsourcing rose sharply, and freelancing income climbed 30 percent. Offshore BPO centers were temporarily disrupted for three to four months, but they recovered in the second half after remote work systems were normalized. Total IT exports still recorded a modest year-on-year increase.
03
Cooperation Opportunities for Korean Firms
1) Software development outsourcing: web and app development for Korean start-ups and SMEs, with monthly developer costs roughly USD 600 to USD 1,200. 2) IT education: entry for Korean institutions via coding bootcamps and certification programs. 3) BPO operations: Korean-language BPO and data labeling services. 4) Fintech collaboration: technology partnerships with mobile wallets such as bKash and Nagad. 5) Hi-Tech Park entry: joint ventures that can use tax and tariff incentives.
04
Market Outlook and Risks
Key structural issues remain: a shortage of mid-level and senior developers, because new talent is abundant but experienced engineers with over five years are limited; unstable power and internet outside Dhaka; and weaker English communication compared with India or the Philippines. IP protection is still underdeveloped. On the positive side, low wage levels (USD 600 to USD 1,500 per month) and a young workforce with a median age of 27 are clear structural advantages.

IT Export Growth Trajectory

2015
USD 300M
↓
2016
USD 450M
↓
2017
USD 600M
↓
2018
USD 800M
↓
2019
USD 1B
↓
2020
USD 1.2B
↓
2025 target
USD 5B
Bangladesh Pharma Market 2020Another strong growth industry
Bangladesh Leather Industry 2020A traditional export industry

Bangladesh IT exports reached USD 1.2 billion in 2020, still smaller than India and the Philippines but the fastest-growing among major outsourcing sectors. Korean firms can target development outsourcing at competitive monthly labor costs, IT education partnerships, and Korean-language BPO operations. The ten-year corporate tax exemption in Hi-Tech Parks remains a meaningful incentive.

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Bangladesh IT Outsourcing Industry 2020: Software Export and Digital Growth Analysis | Dhaka Trade Portal