The Bangladeshi shipbuilding industry is seeking greater government support to expand its export capacity by enhancing design capabilities, upgrading infrastructure, and aligning with international standards. Officials from the Commerce Ministry have outlined plans aimed at helping local entrepreneurs access markets in Europe and North America, thereby diversifying Bangladesh’s export portfolio.

Despite the establishment of a Tk 20 billion refinancing fund intended to support the sector, shipyard owners report difficulties in accessing these funds due to stringent eligibility requirements. The fund, introduced over the past five years, has yet to benefit industry players effectively, leading to calls for revision of the policy and easing of conditions.

Bangladesh Bank issued a circular on February 8 extending the refinancing scheme designed to promote the growth of the coastal shipbuilding industry. Initially, participating banks were permitted to apply for refinancing until June 30, 2024. However, in recognition of the sector’s export potential, the deadline has been extended to December 31, 2026, allowing banks to seek refinancing against loans or investments made under the scheme.

Industry representatives have expressed concerns regarding challenges such as the lack of bank guarantees and high borrowing costs, which hinder local shipyards from securing significant export contracts. These difficulties have resulted in orders shifting to international competitors, notably India and Vietnam.

Engr Abdur Rashid, managing director of Karnaphuli Dry Dock, highlighted the lengthy production timelines involved in shipbuilding, which can extend up to two and a half years, exacerbating the impact of costly financing. He emphasized the need for affordable credit and adequate guarantees to remain competitive in the global market.

Rashid pointed to India’s substantial investment in domestic shipbuilding, supported by a national policy aimed at retaining spending within its shipping sector. He urged Bangladesh to adopt similar financing mechanisms to capitalize on emerging opportunities prompted by rising labor costs in Europe and North America, which are making Bangladesh’s shipyards more attractive to international clients.

While welcoming the government’s renewed interest in the sector, Rashid noted that stronger policy measures could attract larger conglomerates into this capital-intensive field, helping Bangladesh establish a more solid footing in the global shipbuilding industry. Without such support, the country risks missing out on growing export opportunities despite its promising prospects.