Local production of 4G smartphones has nosedived by over 61% year-on-year in the first quarter of this year, as import costs increased for the Taka's depreciation against the dollar.
Also, a shortage of the dollar has made it difficult to open letters of credit, while high inflation has worsened the purchasing capacity of many users.
During the January to March period, local manufacturers made 1.42 million 4G smartphones, according to latest data released by the Bangladesh Telecommunication Regulatory Commission (BTRC).
Around 3.4 million units were made in the same period a year ago.
The smartphone market in Bangladesh witnessed a double-digit decline for the first time in seven years in 2022, according to the latest Market Monitor report by Counterpoint Research.
In its report, the global market research company said Bangladesh's smartphone shipments declined 23% year-on-year in 2022.
About 391,000 4G handsets were manufactured in January and 462,000 in February
However, the figures rebounded slightly in March, with plants producing 570,000 units of 4G smartphones.
The National Board of Revenue slapped a 5% value-added tax at each of the sales stages increasing cost for both manufacturers and consumers.
Consumers too are spending less as inflation has caused a rise in essential goods and services.
In Bangladesh, local handset production has taken impressive strides in recent years, aided by the government's huge tax benefits unveiled in FY18.
Since then, 15 plants have been set up, creating jobs for around 17,000 people.
Another four plants are in the pipeline.
But now they are battling the drop in sales in the local market.
Only 30.9% of individuals own a smartphone and 39% use the internet in Bangladesh, showed a preliminary report of "Survey on ICT Use and Access by Individuals and Households 2022" published by the Bangladesh Bureau of Statistics in late December last year.
Government officials often say there are more than 130 million internet users in Bangladesh.
However, smartphone penetration is over 50% among mobile phone users, according to the BTRC, which collects data from the mobile operators.
