Manufacturing expands amid India trade halt

Gazi Anowar :

In the wake of the July uprising, Bangladesh’s manufacturing sector has demonstrated unexpected resilience and growth, with domestic industries gaining momentum despite ongoing geopolitical uncertainty.

Experts suggest that the suspension of trade with India-once viewed as a severe economic blow – may ultimately drive the country towards greater economic self-reliance.

Over recent months, sectors such as garments, electronics, agro-processing, and light engineering have reported increased domestic production and rising interest from regional and global markets beyond India. Concurrently, local consumers have shifted their preference towards homegrown products, fuelling demand and encouraging rapid industrial adaptation.

The electronics sector, in particular, has seen notable expansion. As of early 2025, locally produced and assembled televisions account for approximately 90 per cent of the domestic market. Additionally, 70-75 per cent of air conditioners and 80 per cent of refrigerators sold are now
manufactured within the country.

Projections estimate the consumer electronics market will reach around $5.17 billion by the end of the year.
Economists view this shift as a potential turning point for the broader manufacturing landscape.

“We are witnessing an unexpected industrial awakening,” said Dr Nasreen Haque, an economist at the University of Dhaka. “The disruption has spurred innovation and the diversification of supply chains. Rather than relying on imports, Bangladeshi firms are investing in domestic research and manufacturing capabilities.”

Prior to the disruption, India accounted for more than 15 per cent of Bangladesh’s imports, supplying essential raw materials and intermediate goods. However, industry leaders now describe the situation as an opportunity for import substitution and greater economic autonomy.

“It was challenging at first, but we’ve started sourcing materials locally or from markets such as Vietnam and Turkey,” said Mohammad Iqbal, Managing Director of Bengal Engineering Ltd.

“The shift is making our supply chains more resilient, even though the transition has been tough.”
Nonetheless, some analysts urge caution against a total economic decoupling from India, stressing the importance of long-term regional cooperation.

“Strategic decoupling must be approached with balance,” warned economist Dr. Sayeed Mahmud. “While self-reliance is commendable, Bangladesh should not entirely close the door on regional trade with India if conditions permit a return to peaceful commerce.”

Government initiatives have played a crucial role in supporting the transition.

Tariff incentives for domestic manufacturers and funding for technological upgrades have contributed to the sector’s upward trajectory. Challenges persist, particularly in infrastructure development and access to high-tech components.

However, the broader outlook remains cautiously optimistic. Many observers now regard the July uprising as a catalyst not only for political change but also for a new era of industrial transformation in Bangladesh.