Tariff, policy hurdles bane of toy exports

Bangladesh's toy industry has shown promise but continues to fall short of its global potential, largely due to tariff barriers, infrastructure gaps, and the absence of a supportive policy framework, according to industry leaders.

Stakeholders at a focus group discussion in Dhaka on Tuesday stressed that unless these challenges are addressed, the sector will remain underutilised despite its growing domestic base and expanding international demand.

The discussion, titled "Diversifying the Export Basket: Innovation, Export Potential and Market Expansion of the Toy Manufacturing Industry," was organised by the Dhaka Chamber of Commerce and Industry (DCCI).

Participants underscored that the global toy market, valued at over US$100 billion and projected to reach $150 billion by 2030, offers enormous scope for Bangladesh. Yet the country's export earnings from toys are just $77 million - a fraction of its potential.

Speakers identified several interlinked bottlenecks holding back growth: high tariffs on imported raw materials, lack of bonded facilities, inadequate testing infrastructure, and the absence of a toy-specific policy, which have prevented the industry from becoming globally competitive.

Limited research capacity, weak product innovation, and overreliance on imported inputs further inflate costs, leaving local manufacturers unable to compete on design, price, or quality in international markets.

DCCI President Taskeen Ahmed, in his welcome remarks, said the sector's potential remains largely untapped because of insufficient policy attention and weak institutional coordination.

He stressed stronger involvement of academia in design and innovation, alongside improved inter-agency collaboration, to unlock growth opportunities.

From the government side, Muhammad Mubinul Kabir, member (Customs: Policy and ICT) at the National Board of Revenue (NBR), acknowledged the urgency of diversifying exports beyond ready-made garments in the post-LDC era.

He says NBR is working to simplify procedures and expand bonded facilities for emerging sectors. However, he cautioned that tariff structures are aligned with the 2023 Tariff Policy and donor agency recommendations, leaving limited room for mid-year policy adjustments.

Necessary reforms may only come during the next budget cycle, he noted.

International partners also weighed in. Martin Dawson, deputy development director at the British High Commission in Dhaka, said Bangladeshi toys hold immense export potential and that the UK market could absorb much higher volumes if policy barriers were eased.

Presenting the keynote paper, Shamim Ahmed, president of the Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA), says around 5,000 enterprises operate in the plastics sector, of which 250 are engaged in toy production, employing an estimated 1.5 million workers.

In FY24, exports from the broader plastics sector stood at $276 million, while the domestic toy market is valued at nearly Tk 400 billion.

Toy exports have grown from $15.23 million in FY17 to $77 million in FY23, reaching 88 countries. Despite this progress, Mr Ahmed argued, the sector's contribution remains negligible compared with its potential.

Industry leaders stressed that product innovation and novel design are essential for sustaining competitiveness.

"Without innovation, survival in this sector will be difficult," said Md Juhirul Islam Shimul of Redmin Industries.

Others highlighted how high tariffs on imported plastic raw materials raise production costs and consumer prices, eroding competitiveness.

Participants put forward a range of recommendations. These included lowering tariffs and duties on raw materials and machinery, developing clusters, strengthening supply chains, and ensuring intellectual property protection.

Md Anisur Rahman of ACI's Premiaflex Plastics Ltd emphasised the need to lower bank interest rates and implement tariff policies consistently.

Yasir Obaid of Cupcake Exports Ltd urged streamlining policies and improving government coordination.

Belal Ahmed of Golden Son Ltd argued that the absence of a dedicated policy for toy manufacturers deprives entrepreneurs of critical government support.

Officials from regulatory bodies also made recommendations.

Md Mamun-Ur-Rashid Askari of the Bangladesh Trade and Tariff Commission urged businesses to adopt single-window facilities to simplify imports, while Dr Ashoke Kumer Roy of the Ministry of Industries stressed the need to embrace patents, designs, and trademarks rather than imitating global brands.

Environmental concerns also entered the discussion. Dr Abdullah Al Mamun of the Department of Environment noted that renewal fees for green and yellow category plastic industries have been waived for up to five years, easing compliance.

He called for academia's involvement in research and capacity building in areas such as energy, water, and waste management.

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