The document provides an overview of industrial development policies and export-oriented industries in Bangladesh. It defines industrialization and discusses its benefits. The key objectives of industrialization in Bangladesh are to provide employment, increase GDP, supply goods, and improve the balance of payments. Major government organizations support industrial development by providing administrative, institutional and infrastructure facilities. Bangladesh's industrial policy aims to accelerate private investment and growth through an enabling environment. Major export industries include ready-made garments, home textiles, leather goods, jute products, agricultural products, fish and shrimp, light engineering, ceramics, pharmaceuticals, toiletries, software, ships, and electronics.

1. CHAPTER: INDUSTRIAL DEVELOPMENT
A) POLICIES FOR INDUSTRIAL DEVELOPMENT
1.1: Definition of Industrialization
Industrialization is a process that happens in countries when they start to use machines to do work
that was once done by people. Industrialization changes the society as it happens. During the
industrialization of a country people leave farming work to take higher paid jobs in factories in
towns. Industrialization is part of a process where people adopt easier and cheaper ways to make
things. Using better technology, it becomes possible to produce more goods in a shorter amount
of time.
1.2: Benefits of Industrialization:
1. Modernization and structural transformation of the economy and diversification of the
economic base
2. Increasing returns and economies of scale
3. Technological progress and productivity increase
4. Accelerated economic growth and employment creation
5. Increase in incomes and standard of living of the people
1.3: Objectives of Industrialization:
1. To provide employment to working labour force
2. To increase GDP
3. To supply consumer, capital and intermediary goods
4. To support agriculture and service sectors
5. To improve balance of payment positive by promoting export industry and import
substitute industries

2. 1.4: Government authorities for developing industrial policy : In order to provide
administrative, institutional and infrastructure facilities in the country's industrialization, there are
organizations such as the Bangladesh Stranded and Testing Institution (BSTI), Bangladesh
Industrial Technical Assistance Center (BITAC), Bangladesh Institute of Management (BIM),
Bangladesh Small and Cottage Industries Corporation (BSCIC), National Productivity
Organization (NPO) and Small and Cottage Industries Training Institute (SCITI) under the
Ministry of Industries, and the National Institute of Textile Training, Research and Design
(NITTRED), Bangladesh Silk Research and Training Institutes under the Ministry of Textiles and
Jute.
1.5: Industrial policy in Bangladesh
Bangladesh Government believes that rapid industrialization is a key to the country’s economic
development. Given the present global competition, the private sector is playing an important role
in the industrialization of the country. Therefore, the Government in the Ministry of Industries has
taken the role of a facilitator.
The key features of the Government industrial policy 2010 are indicated as follows:
• To expand the production base of the economy by accelerating the level of industrial investment
• To promote the private sector to lead the growth of industrial production and investment
• To focus the role of the government as the facilitator in creating an enabling environment for
expanding private investment and sustained economic growth
• To attract foreign direct investment in both export and domestic market oriented industries to
make up for the deficient domestic investment resources, and to acquire evolving technology and
gain access to export markets
To ensure rapid growth of industrial employment by encouraging investment in labor incentive
manufacturing industries including investment in efficient small and cottage industries
• To generate female employment in higher skill categories through special emphasis on skill
development

3. • To raise industrial productivity and to move progressively to higher value added products
through skill and technology upgrading
• To ensure a process of industrialization which is environmentally sound and consistent with the
resource endowment of the economy
• To effectively utilize the existing production capacity
• To coordinate all macroeconomic policies
• To develop indigenous technology and to expand production based on domestic raw materials
and inputs
• To rehabilitate and support deserving sick industries
If all structural and policy obstacles to industrial development could be overcome, Bangladesh
could expect to achieve a double-digit industrial growth in the coming years and move closer to
achieving the target of raising the industry sector’s share in GDP to 35-45% in the next decade as
set by the 2010 industrial policy.
B) EXPORT ORIENTED INDUSTRIES IN BANAGLDESH
2.1: Export-oriented industrialization (EOI): It is also called export substitution
industrialization (ESI) which is a trade and economic policy aiming to speed up
the industrialization process of a country by exporting goods for which the nation has
a comparative advantage. Export-led growth implies opening domestic markets to foreign
competition in exchange for market access in other countries.
However, this may not be true of all domestic markets, as governments may aim to protect specific
nascent industries so they grow and are able to exploit their future comparative advantage and in
practice the converse can occur. For example, many East Asian countries had strong barriers
on imports from the 1960s to the 1980s.

4. Reduced tariff barriers, a floating exchange rate (a devaluation of national currency is often
employed to facilitate exports), and government support for exporting sectors are all an example
of policies adopted to promote EOI and, ultimately, economic development. Export-oriented
industrialization was particularly characteristic of the development of the national economies of
the Asian Tigers: Hong Kong, South Korea, Taiwan, and Singapore in the post-World War
II period.
2.2: Export-led growth: Export-led growth is an economic strategy used by some developing
countries. This strategy seeks to find a niche in the world economy for a certain type of export.
Industries producing this export may receive governmental subsidies and better access to the local
markets. By implementing this strategy, countries hope to gain enough hard currency to
import commodities manufactured more cheaply elsewhere.
2.3: Major export oriented industries in Bangladesh:
In last few years, Bangladesh has experienced rapid growth in export earnings with total figure
reaching US$ 31.21 billion during the last financial year from July 2014 to June 2015. Owing to
rapid expansion of the export-oriented manufacturing sector, Bangladesh’s export earning has
doubled in just five years, despite slow pace in the recovery of global economy. Though textile &
apparel sector still remains the predominant contributor in the country’s export earnings, other
sectors such as pharmaceuticals, ceramic tableware, plastic and ceramic articles, leather products,
agro-products, software & IT solutions, home appliances, electrical gadgets, ships & vessels, light
engineering products are emerging progressively.
Bilateral trade between Bangladesh and China has been growing at an exponential rate. Bilateral
trade between China and Bangladesh reached US$ 10.31 billion in 2013 from only about a billion
USD in 2002. China has emerged as the largest source of imports for Bangladesh is 2007.
Similarly, Bangladesh is China’s third largest trading partner in South Asia. There is still huge
potential for growth in bilateral trade. Chinese investments in labour-intensive manufacturing in
Bangladesh will substantially increase Bangladesh’s imports of capital goods and industrial inputs

5. from China and the import of component parts or semi-processed items produced in Bangladesh
under such arrangements as inputs for China’s high-end manufacturing would not only help
maintain a healthy balance in bilateral trade but also facilitate China’s ongoing economic
restructuring. Major export items/industries of Bangladesh are as follows:
Ready-made Garments:
Bangladesh is the second largest textile and apparel items exporter in the world, after China.
Ready-made Garments (RMG) sector contributes about 80% of the total export earnings of
Bangladesh and about 10.5% of the country’s GDP. Bangladesh has earned about US$25 billion
from export of ready-made apparels in financial year 2014-15. Knitwear items manufactured with
locally knitted fabrics qualify duty free/zero tariff access to EU, Japan, Australia, Norway, and
Canada. Bangladesh is one of the biggest suppliers of knit items to the EU.
Home Textile Products:
Home textile products from Bangladesh, which include all sorts of towel, bath robe, wash cloth,
kitchen gloves, dish cloth, napkin, bed sheet, bed cover, pillow cover, are quite popular in the
world market for their quality and design. Major importing countries of Bangladeshi home textile
products are UK, USA, France, Canada, Germany, Belgium, Sweden, Austria, Malaysia, UAE,
Italy, Hong Kong, Japan and Saudi Arabia.
Leather and Leather Goods:
Because of the synergy of latest technology with abundant raw materials and inexpensive skilled
labour, leather and leather products are now playing an important role in export earnings of the
country. Bangladesh produces the world’s finest quality goatskin of smooth grain pattern. Many
manufacturers are producing various types of high quality leather items like: shoes, mokasins,
travel goods, suitcases, briefcases and fashion accessories, belts, wallets, hand bags, case holders,
etc for overseas markets. Bangladesh has also entered in the field of leather fashion garments with
items of distinction and prestige. At present, leather products are exported to about 60 countries of
the world including USA, UK, Italy, Germany, and Brazil.

6. Jute and Jute Products:
Bangladesh is blessed with the favourable climate and the potentials to be the largest grower and
exporter of the best quality jute, the golden fibre. This gives Bangladesh advantage over other jute
growers anywhere in the world. Through uncompromising resolve to stick to the use of the best
raw jute, strict adherence to buyers’ needs and specifications, rigorous quality control and timely
delivery, Bangladesh has earned international eminence as the principal source of high quality jute.
Traditional use of jute fibre includes production of geo-degradable bag and sacks for packing all
kinds of agricultural produces, minerals, fertilizer, cement, sand, sugar etc. Fine-count jute clothes
are also used as carpet backing and some other purposed. A number of unconventional jute
products such as footwear, hand bag, wallet have already been introduced and efforts are going on
to further improve the quality of jute fabrics as well as to develop high-value innovative products
from jute fibre and jute straw.
Agricultural Products:
Bangladesh is gifted with a fertile land and favorable climate for the production of various
agricultural products. In view of the sector’s great potentials, the Government has given much
emphasis on the development of agricultural products and agro-based industries in the country.
Vegetables, fruits, aromatic fine rice, tea and other agro-products are being exported regularly.
Besides, a number of processed agro-based items such as spices, chanachur, potato chips, fruit
juice, pickles, are being exported to overseas markets. Major importing countries of agro products
are Saudi Arabia, Kuwait, UK, USA and Germany. The Government and the private sector are
working together to set up “export villages” for the production of quality fruits and vegetables.
Fish and Shrimps:
Bangladesh, a riverine deltaic country having 0.33 million hectors of inland water and 480 km
coast line with its warm tropical climate, offers a vast reserve of fresh and brackish water fish,
including shrimps and crabs. Bangladesh is the fourth largest sweet water fish producing country
and the fifth largest fish cultivating nation in the world. Because of the Government’s continued
financial & technical supports and growing initiatives from the private sector, Bangladesh’s fish

7. production has increased by about 55% over the last decade. Bangladesh is exporting frozen
shrimp to about 30 countries of the world including USA, Japan, Belgium, UK, The Netherlands,
France and Germany. Over the past decade, Bangladesh’s fish export has increased by 135%.
Light Engineering Industries:
Light Engineering Industries play a significant role in augmenting the industrial base and volume
of foreign trade of Bangladesh. More than 30,000 light engineering units are in operation around
the country. Meanwhile, bicycle has emerged as one of the potential products in the Light
Engineering sector in Bangladesh. Export of motor-cycles, component parts for automobile and
various equipments/machinery, steel and copper ware, optical and medical instruments is gradually
increasing.
Ceramic Table wares:
Bangladesh has emerged as one of the successful manufacturing and exporting countries of quality
ceramic tableware. Almost all the producing units have succeeded in establishing their brand
names in the international ceramic tableware market. To ensure proper quality and goodwill, all
the producing units use advanced manufacturing plant with high-tech latest machinery. Each of
the units has its own in-house laboratory facility for quality control and testing mechanism. At
present, ceramic tableware is being exported to USA, UK, Italy, Spain, France, New Zealand, the
Netherlands and Australia, Sweden.
Pharmaceuticals:
Pharmaceutical is one of the fastest growing sectors in Bangladesh. At present, Bangladesh exports
a wide range of pharmaceutical products covering all major therapeutic classes to over 100
countries including highly regulated US and EU markets. Along with regular forms like tablets,
capsules and syrups, Bangladesh also exports specialized products like HFA inhalers, CFC
inhalers, suppositories, nasal sprays, injectables, IV infusions, etc. These products have been well
accepted by medical practitioners, chemists, patients and the regulatory bodies of all of their

8. importing nations. The packaging and the presentation of the products of Bangladesh are
comparable to any international standard.
Toiletries and Cosmetics:
In recent times, toiletries and cosmetics items of Bangladesh have made significant improvement
as regards quality and packaging. Using the most modern method of production, technology and
world class raw materials, the finished products are of international standard and capable of
competing with products of the renowned companies of the world. Toiletries and cosmetics
products produced in the country are exported to UAE, Malaysia, Republic of Korea, Oman,
Jordan, Sri Lanka, Saudi Arabia, France, Singapore and other countries.
Software and ICT products:
The software is a recent booming industry in Bangladesh and enjoys progressive rises in export
volume. Bangladesh export earnings from software crossed US$ 100m for the first time in the last
fiscal year 2012-13. Country’s software export registered more than 40% growth for last few years.
Target has been set to earn US$ 1billion annually from software export by next 5 years. At the
moment, main destinations of Bangladeshi software products are USA, UK, Canada, Australia,
Denmark, Netherlands, Germany, India and Japan.
Ships and vessels:
In the recent years, shipbuilding has become a major promising industry in Bangladesh with great
export potentials. Bangladesh has now over 200 shipbuilding or repair units, mostly concentrated
in Dhaka, Chittagong, Narayanganj and Khulna. Some of the private companies have formed joint
ventures to meet the growing international demands for advanced vessels. In 2008, Bangladesh
has become a ship exporting country. In view of growing amount of export deals secured by local
shipbuilding companies as well as the abundance in skilled workforce at low cost, experts suggest
that Bangladesh could emerge as a major competitor in the global market of small to medium size
ocean-going vessels.

9. Electronics and electrical products:
Electronic and electrical industry in Bangladesh is one of the fastest growing industries with
immense potential. In last three decades, numerous electronic products assembly plants and spare
parts producing companies have been established in Bangladesh. By this time, a number of
multinational companies have set up assembly and manufacturing plants in the country. Recently,
a few local companies have also established complete manufacturing plants for many electronic
products in joint collaboration with foreign companies. Bangladesh now exports varieties of home
appliances and other electronic and electrical products to Africa, the Middle East and some other
regions of the world.