Strategic Framework to Overcome Industrial Stagnation and Equipment Contraction

Situation

Bangladesh faces an industrial slowdown driven by a sustained slump in capital equipment imports. BBS data indicates industrial growth fell from 8.18% in FY2022-23 to 3.71% in FY2024-25, and slowed further to a provisional 2.86% in FY2025-26 [The Business Standard, September 25, 2026]. Over four fiscal years from FY2021-22 to FY2024-25, import volume of capital machinery, medical gear, vehicles, and heavy equipment dropped by 45.1%, falling from 2.26 million tonnes to 1.24 million tonnes [The Business Standard, September 25, 2026]. FY2025-26 recorded a modest rebound of 13.7% to 1.41 million tonnes after three consecutive years of negative growth [The Business Standard, September 25, 2026]. CCCI President Amirul Haque noted that rising consumer imports reflect expanding household consumption, but domestic productive capacity lags due to weak machinery acquisition [The Business Standard, September 25, 2026]. While Bangladesh manufactures approximately 90% of knit fabric locally, it remains heavily reliant on woven fabric imports predominantly from China [The Business Standard, September 25, 2026]. Former BGMEA Vice-President Naser Uddin Chowdhury urged a five-year national plan to expand manufacturing capacity in import-dependent sectors [The Business Standard, September 25, 2026].

Evidence

Import volume collapsed 45.1% across four fiscal years, falling from 2.26 million tonnes in FY2021-22 to 1.24 million tonnes in FY2024-25 [The Business Standard, September 25, 2026].
In FY2025-26, import volume rebounded 13.7% to 1.41 million tonnes after three consecutive years of negative growth [The Business Standard, September 25, 2026].
Annual import volumes and expenditures: FY2021-22: 2.26 million tonnes at Tk 30,406.20 crore [The Business Standard, September 25, 2026]. FY2022-23: 1.51 million tonnes at Tk 28,130.14 crore [The Business Standard, September 25, 2026]. FY2023-24: 1.45 million tonnes at Tk 28,233.38 crore [The Business Standard, September 25, 2026]. FY2024-25: 1.24 million tonnes at Tk 29,417.22 crore [The Business Standard, September 25, 2026]. * FY2025-26: 1.41 million tonnes at Tk 34,497.00 crore [The Business Standard, September 25, 2026].
Across a 15-year period from FY2009-10 to FY2025-26, combined import volume dropped 41.5% from 2.41 million tonnes to 1.41 million tonnes, while expenditure surged 152.7% from Tk 13,653 crore to Tk 34,497 crore [The Business Standard, September 25, 2026].
BBS recorded industrial growth at 8.18% in FY2022-23, falling to 3.71% in FY2024-25, and slowing to a provisional 2.86% in FY2025-26 [The Business Standard, September 25, 2026].
Domestic production satisfies approximately 90% of knit fabric demand, but woven fabric remains dependent on imports predominantly from China [The Business Standard, September 25, 2026].
Business leadership assessments: CCCI President Amirul Haque stated consumer imports outpace domestic productive capacity due to machinery deficits, and former BGMEA Vice-President Naser Uddin Chowdhury urged a five-year national plan for import-dependent industries [The Business Standard, September 25, 2026].

Prescription

Action A (Bangladesh Bank): Allocate priority foreign exchange liquidity and ease letter-of-credit cash margins for capital machinery, heavy equipment, and medical gear. This intervention directly addresses the 45.1% volume slump between FY2021-22 and FY2024-25 [The Business Standard, September 25, 2026]. Cash margins must remain restrictive for non-essential consumer imports, countering the divergence identified by CCCI President Amirul Haque between consumption imports and productive machinery acquisition [The Business Standard, September 25, 2026].
Action B (National Board of Revenue): Provide fast-track customs clearance and targeted tariff relief on capital goods and intermediate industrial equipment. With import expenditure reaching Tk 34,497.00 crore in FY2025-26 [The Business Standard, September 25, 2026], NBR must suspend advance taxes on machinery replacement. NBR should waive duties on equipment imported for backward linkage production, particularly woven fabric machinery to cut reliance on imports predominantly from China [The Business Standard, September 25, 2026].
Action C (Ministry of Industries with Ministry of Commerce): Formulate and execute the five-year national plan recommended by former BGMEA Vice-President Naser Uddin Chowdhury to expand domestic manufacturing in import-dependent industrial segments [The Business Standard, September 25, 2026]. Replicating the knit fabric model, where local production reaches approximately 90% [The Business Standard, September 25, 2026], this plan must allocate industrial plots and utility guarantees for woven fabric mills to revive industrial growth from the provisional 2.86% rate [The Business Standard, September 25, 2026].
Action D (Ministry of Finance): Establish a concessional capital equipment refinancing window to support industrial retooling. Partnering with Bangladesh Bank, the Ministry of Finance should provide subsidized term loans to consolidate the 13.7% volume rebound in FY2025-26 [The Business Standard, September 25, 2026] and reverse the industrial growth decline from 8.18% in FY2022-23 to 3.71% in FY2024-25 [The Business Standard, September 25, 2026].

Risks and tradeoffs

Balance of payments exposure: Across the 15-year period from FY2009-10 to FY2025-26, import expenditure rose 152.7% from Tk 13,653 crore to Tk 34,497 crore despite a 41.5% volume drop [The Business Standard, September 25, 2026]. Accelerating capital equipment imports risks worsening foreign exchange reserves given high expenditure per physical tonne.
Consumption containment tradeoffs: Curbs on consumer imports to preserve foreign exchange for machinery, responding to CCCI concerns on consumption outpacing capacity [The Business Standard, September 25, 2026], could induce domestic consumer price inflation.
Backward linkage gestation lags: Developing domestic capacity to replicate the knitwear sector's achievement of approximately 90% local fabric production [The Business Standard, September 25, 2026] involves long setup horizons and large capital commitments. Premature protectionist measures could raise costs for garment producers while factories remain reliant on fabric imports predominantly from China [The Business Standard, September 25, 2026].

Bottom line

The collapse in capital machinery imports to 1.24 million tonnes in FY2024-25 and the deceleration of industrial growth to 2.86% in FY2025-26 demonstrate a severe impairment of domestic productive capacity [The Business Standard, September 25, 2026]. The Ministry of Finance, Bangladesh Bank, NBR, and line ministries must coordinate foreign exchange allocation, tariff incentives, and a five-year national plan to rebuild industrial capital formation [The Business Standard, September 25, 2026].

Share card

Key figures from the 2026-09-25 brief as a shareable card

Sources

Over four fiscal years (FY22 to FY25), Bangladesh's import volume of capital machinery, medical gear, vehicles, and heavy equipment dropped by 45.1%, falling from 2.26 million tonnes in FY2021–22 to 1.24 million tonnes in FY2024–25. [The Business Standard, September 25, 2026]
In FY2025–26, import volume of capital machinery, medical gear, vehicles, and heavy equipment saw a modest rebound of 13.7% to 1.41 million tonnes after three consecutive years of negative growth. [The Business Standard, September 25, 2026]
In FY2021–22, import volume was 2.26 million tonnes with an expenditure of Tk 30,406.20 crore. [The Business Standard, September 25, 2026]
In FY2022–23, import volume was 1.51 million tonnes with an expenditure of Tk 28,130.14 crore. [The Business Standard, September 25, 2026]
In FY2023–24, import volume was 1.45 million tonnes with an expenditure of Tk 28,233.38 crore. [The Business Standard, September 25, 2026]
In FY2024–25, import volume was 1.24 million tonnes with an expenditure of Tk 29,417.22 crore. [The Business Standard, September 25, 2026]
In FY2025–26, import volume was 1.41 million tonnes with an expenditure of Tk 34,497.00 crore. [The Business Standard, September 25, 2026]
Over a 15-year period from FY2009–10 to FY2025–26, the combined import volume dropped 41.5% from 2.41 million tonnes in FY2009–10 down to 1.41 million tonnes in FY2025–26, while import expenditure surged by 152.7% from Tk 13,653 crore to Tk 34,497 crore. [The Business Standard, September 25, 2026]
Industrial growth stood at 8.18% in FY2022–23, plummeted to 3.71% in FY2024–25, and slowed further to a provisional figure of 2.86% in FY2025–26 according to Bangladesh Bureau of Statistics (BBS) data. [The Business Standard, September 25, 2026]
Bangladesh now manufactures approximately 90% of its knit fabric locally, but remains heavily reliant on woven fabric imports predominantly from China. [The Business Standard, September 25, 2026]
Naser Uddin Chowdhury, former Vice-President of BGMEA, urged the government to introduce a five-year national plan to expand local manufacturing capacity in import-dependent industrial segments. [The Business Standard, September 25, 2026]
Amirul Haque, President of the Chattogram Chamber of Commerce and Industry (CCCI), noted that while rising consumer imports indicate expanding household consumption, domestic productive capacity has failed to keep pace due to lagging machinery acquisition. [The Business Standard, September 25, 2026]

Grounded in 12 source documents in the evidence record.

Today's other watched topics

2. Monetary Policy Committee Holds Policy Rate at 9.5% Bangladesh Bank held its policy rate at 9.5% on September 23 to assess fallout from fuel price hikes and the new pay scale, dampening stock market sentiment as the DSEX dropped 17 points.
3. IMF Reports 36% Educated Youth Unemployment Amid Skills Mismatch An IMF report revealed 36% of educated youth are unemployed, underscoring severe structural bottlenecks as tertiary graduates expanded 2.5 times over 12 years to 750,000 annually without commensurate high-skilled private sector job creation.
4. Foreign Bank Retrenchment and Banking Sector Stress Standard Chartered is exploring divesting its Tk 8,479 crore retail and cards book, signaling foreign retrenchment from domestic consumer banking alongside liquidity strains in major Islamic banks and regulatory debt relief for jute exporters.
5. Taka Cross-Rate Appreciation Against the Indian Rupee The Taka gained 7.6% year-on-year and 11.6% over two years against the Indian Rupee to ₹0.781 per Tk 1, providing a critical buffer to lower import costs from Bangladesh's second-largest import partner.

Topics ranked by gemini-3.8-flash; prescription drafted by gemini-3.8-flash; grounding verified by gemini-3.8-flash. Generated 2026-09-25T11:32:56.121844+00:00.