The Bangladesh Mobile Phone Manufacturing Association (BMPMA) has sought loan from the government-declared working capital fund to survive the Covid-19 pandemic shutdown, which caused all the handset assembling factories to be closed.
In a letter to Finance Minister AHM Mustafa Kamal, the association urged on Thursday to get financing under the stimulus package one, where Tk30,000 crore was announced for big industries and the service sector as a working capital loan at 9 percent interest rate, with the government providing 4.5 percent in subsidy.
The BMPMA said the financial incentives were needed to pay the salaries and wages of the workers for six months [April to September].
Last year, for the first time in the country's history, local assembly of smartphones took the lead over import, buoyed by tax benefits for the assembling industry.
According to the latest data of the Bangladesh Telecommunication Regulatory Commission (BTRC), in 2019, the number of locally assembled smartphone increased to 20 lakh from 7 lakh in the previous year.
In contrast, the number of smartphone import fell to 9.67 lakh last year compared to 24.44 lakh in the previous year.
"The pandemic hit our industry long before the shutdown was imposed in Bangladesh, as the lion's share of the required backward linkage material is sourced from China," BMPMA Secretary General Jakaria Shahid told The Business Standard on Saturday.
He added that currently there are around two lakh workers engaged in the production of smartphones and feature phones in the country.
"Not only the production remains halted, but also a huge number of phones were sold on credit in the market. Besides, due to this lockdown there are almost zero sales. So a big chunk of money is stuck there," said Shahid.
He hoped that the government would consider the matter as it is an import substitute industry.
The phone assemblers also sought a waiver on utility charges of the closed factories for April to September.
In 2018, the government allowed nine companies to assemble mobile phone handsets locally.
The companies are Walton Digi-Tech Industries, Fair Electronics, EDISON Industries, Carlcare Technology BD, Alamin and Brothers, Anira International, OK Mobile, Transsion Bangladesh and Best Tycoon (BD) Enterprise.
Currently, there is 57 percent customs duty on imported smartphones while the duty on components of locally assembled smartphones is 15 percent.