Is Made in Bangladesh Product Produced Locally?

Is Made in Bangladesh Product Produced Locally

Switzerland is known for its cheese and chocolate, Japan for its dependable and efficient automobiles and technology, and the Maldives as a vacation destination. Bengal was also well-known for its muslin and superior textiles even a few hundred years ago. Branding a nation based on its famous goods or location is a very ancient technique. In recent years, the government has placed a greater emphasis on branding the Made In Bangladesh slogan to promote various items made in Bangladesh and boost the country’s standing. While Bangladeshi RMG goods have been exported to the United States, the European Union, and Canada for decades, the branding began with the Made In Bangladesh label. For various geopolitical reasons, Bangladesh has the potential to become a worldwide manufacturing powerhouse for items other than RMG. Due to the government’s new policy, several local and international firms have begun producing Made In Bangladesh goods.

In terms of RMG export, Bangladesh stands second after China. In FY 2021-22, the total RMG export was more than $42 billion, which is more than 80 percent of Bangladesh’s total export. Bangladesh’s RMG sector is the main face of Made In Bangladesh products in the global market. Apart from RMG, the textile industry of Bangladesh carries the recognition of Made In Bangladesh products in the worldwide market. Bangladesh exported textile products worth about $2 billion (1.94) in the FY 2021-22. After RMG and textile, the country’s leather, leather footwear, and other leather products like a belt, moneybag, etc., is in the third position. Bangladesh earned $1.2 billion from this sector in FY 2021-22. Apart from this, Bangladesh earns a large amount of foreign exchange by exporting items such as cottages, jute, ceramics, ships, steel, bicycle, and furniture, which is also increasing the reputation of Made In Bangladesh products around the world.

Is Made In Bangladesh Product Produced Locally

The Government of Bangladesh is committed to expanding various industries across the country, increasing domestic production as an alternative to imports, and establishing the “Made in Bangladesh” brand to introduce Bangladesh as a manufacturing hub. The government has been using the “Made In Bangladesh” tag as a brand itself for the last few years to achieve that recognition. For example, in December 2021, the Bangladesh Foreign Trade Institute (BFTI), under the Ministry of Commerce of Bangladesh, conducted the Made In Bangladesh campaign jointly with international media CNN. Besides, under government sponsorship, Bangladesh Garment Manufacturers & Exporters Association (BGMEA) and Bangladesh Apparel Exchange (BAE) conducted Made In Bangladesh Week campaign in November 2022, where the campaign featured the Bangladeshi garment and apparel industry. Also, to encourage manufacturing in the country, in FY 2021-22 budget, the government proposed tax exemption for three-wheeler and four-wheeler automobile manufacturing companies for ten and 20 years, subject to conditions. In addition, not only automobiles, but also manufacturers of home appliances, kitchen appliances, and light engineering products were also proposed to be given conditional tax exemption for ten years.

Taking advantage of this opportunity, various electronics manufacturing companies are already producing these products in Bangladesh and marketing them under the Made in Bangladesh tagline. As a result, the country’s consumer electronics sector has shifted from being completely import-dependent to a manufacturing-dependent industry. Although the businesses operating in different sectors in Bangladesh, including electronics brands, still do not manufacture complete products. They import products manufactured from China, Indonesia, Thailand, or any other international source and launch them in the market as private label brands. Some companies import different product parts separately to get tax benefits, assemble them in the country’s factory, and sell them using the Made in Bangladesh tagline. For example, Samsung, Xiaomi and other mobile manufacturing brands mainly import components like chipsets and motherboards from their international factories and suppliers to Bangladesh and assemble them in the country’s plants. Due to this, these products cannot actually be called completely Made in Bangladesh. Again, there is considerable doubt regarding Made In Bangladesh products being CKD products. For example, several domestic firms have established joint venture assembly plants with international car brands where CKD vehicles are assembled. But several companies are trying to import Chinese brand CKD cars, assemble them in the country, and promote those under Made In Bangladesh tag.

Although the government has provided many benefits, it has yet to set any specific criteria for product quality compliance. Due to this, there is an opportunity for various organizations to mislead buyers by using this tag. Many manufacturers are also exporting these products internationally, beyond the domestic market, which might damage the reputation of Made In Bangladesh brand internationally. For example, globally, “Made in China” products had a negative consumer perception of Chinese manufactured products. Although China has significantly upgraded its manufacturing in the past few decades and several global brands, have emerged in smartphone and automotive manufacturing, this perception of Chinese products still exists among worldwide consumers. Again, the perception of customers is very positive in the case of Japanese, German or US-made automobiles and machinery. As the government is trying to promote Made In Bangladesh, the government should now lay down guidelines to maintain certain criteria for product quality and use of Made In Bangladesh tag. The Bangladesh government has already asked these manufacturing companies to add 20 to 30 percent value of manufactured goods to avail of the taxation under Made In Bangladesh tag. 

But, the government should set a minimum target of 50 percent value addition to ensure product quality, using the Made In Bangladesh branding. For example, world-famous Swiss Made watches are certified only when the watch’s casing, internal movement, and final inspection are completed in Switzerland. There is also a requirement that a minimum of 60 percent of the watch’s manufacturing effort be made in Switzerland. In addition, the casing and internal movement also have specific criteria that are fulfilled only when the certification is issued, only then can the watch be sold as a Swiss watch. Also, Japan is famous for Wagyu beef and has set a standard grading system for different varieties of Wagyu beef based on intramuscular fat or marbling texture, fat color, and meat firmness. On the other hand, in the case of Italian Parmesan Cheese, the highest grade certification is only given if it has less than 32 percent moisture, 32 percent or more milk fat, and has been cured for at least ten months. As Bangladesh is gradually becoming a global manufacturing hub, the government and the Ministry of Commerce should focus on quality from the beginning. By doing this, it will be possible to maintain the quality of globally Made In Bangladesh products and growth in the country’s overall industry. It will also develop backward linkages to support manufacturing, further strengthening Bangladesh’s manufacturing capacity. As can be observed in the case of neighboring country India, while the country’s automobile sector was once dependent on assembly, Indian automobile brands are now becoming recognized globally due to the country’s strict rules and regulations. Currently, Indian automobile brands are manufacturing most of the car parts and components to complete cars in India and exporting them abroad.

world-famous Swiss Made watches are certified only when the watch's casing, internal movement, and final inspection are completed in Switzerland

Suppose the government does not immediately take a strong stand for the use of Made In Bangladesh tag, and companies keep assembling, selling, and exporting under the Made In Bangladesh brand. In that case, other domestic companies will not be interested in investing in setting up factories. Everyone will then want to manufacture at low cost from global manufacturing hubs, assemble it in the country, and export it without any big investment, which will hinder Bangladesh’s overall industry growth and destroy Bangladesh’s potential to become a global manufacturing hub. In this case, the government should refrain from allowing the use of Bangladeshi products or “Made in Bangladesh” branding in the case of assembled products. In that case, the companies will be forced to start investing in manufacturing the entire product in the country. By doing so, more new companies will be created in backward linkages to manufacture other components required to manufacture that product, creating more employment and accelerating the country’s industrial growth. In addition, by ensuring the quality of these products and exporting them abroad, it will be possible to earn a large amount of foreign currency and brand Bangladesh as a quality product manufacturer. However, as Bangladesh has the potential to become a global hub in manufacturing, these sectors will grow more strongly if they are standardized with appropriate guidelines for quality assurance and value addition.

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