Trade Policy

Bangladesh Slashes Solar Import Duties to 0% for 5 Years – How Much Can Chinese Exporters Benefit?

     On June 11, 2026, Bangladesh's Finance Minister Khosru announced a blockbuster measure in the national budget – a 0% tax rate on the solar energy sector. This policy covers not only solar power generation projects themselves, but also import tariffs: customs duties, regulatory taxes, surcharges, and advance income taxes on more than a dozen key product categories – including PV modules, inverters, lithium-ion batteries, energy storage systems, battery management systems, mounting structures, specialized cables, and thermal management systems – have all been reduced to zero.

     Behind this policy lies a nation's urgent energy transition, and a structural opportunity that Chinese exporters cannot afford to miss.

1. What Exactly Has Been Exempted?

     Previously, Bangladesh's comprehensive import duty rates on solar products were staggering: PV modules faced about 26% total duties, inverters as high as 37%, and mounting structures up to 58.6%. Now, all these are reduced to zero.

The duty-free list covers a wide range of products:

   ·Solar PV modules/panels

   ·Solar inverters

   ·PV mounting structures

   ·Lithium battery cells and lithium-ion batteries

   ·Battery pack enclosures

   ·Battery energy storage systems (BESS)

   ·Battery management systems (BMS)

   ·UV-resistant solar DC cables

   ·Battery thermal management systems

Key effective periods:

   ·Import duties, regulatory taxes, surcharges, and advance income tax on core solar power generation components are exempted until June 30, 2031.

   ·Solar power projects enjoy 0% corporate income tax until June 30, 2035.

   ·Residential and commercial users of solar power receive a 5% tax rebate on electricity bills.

     It should be noted that the exemption periods vary by product: tariffs on solar cells, mounting structures, and battery packs are exempted until June 2028, while the zero-duty on full PV modules extends to June 2031.

2. Why Is Bangladesh Going All In?

     Bangladesh's energy dilemma is the fundamental driver behind this policy shift.

     The numbers tell a stark story: The country currently has only 1,797 MW of installed renewable energy capacity, of which solar accounts for 1,504 MW. Renewables make up about 6% of total installed capacity, and an even more dismal 2.3% of actual grid-connected electricity – far below the global average of 33.8%.

     Heavy reliance on imports comes at a cost: Bangladesh's energy mix is dominated by natural gas, and fossil fuels are heavily imported. Any fluctuation in international energy prices hits the national budget hard. Coupled with gas shortages and the shutdown of some coal-fired plants, Bangladesh has even been forced to import electricity from India.

The targets are clear:

   ·By 2030: Renewables to meet 20% of national power demand.

   ·By 2050: Clean energy share to rise to 30%–50%.

     To this end, the government has allocated Taka 1,499.6 billion (approximately USD 11.3 billion) for the power sector. The Energy Minister has explicitly stated: "We have set a target to supply 5,000 MW of solar power to the national grid by 2030, and I hope actual capacity will be even higher."

     The gap – from 1.5 GW to 5 GW or even 10 GW – will be filled almost entirely by imported equipment.

3. How Much of This Pie Can Chinese Exporters Claim?

China stands to be the single biggest beneficiary of this policy.

     First, an established presence. China is already Bangladesh's number-one source of solar equipment imports. The joint China-Bangladesh Shirajganj PV plant (around 68 MW) is a successful precedent.

     Second, cost advantages are now overwhelming. Chinese PV products were already 20%–30% cheaper than European and American alternatives. With 26%–58% duties removed, this is no longer just "cost-effective" – it's a complete market disruption.

     Third, full-chain exemption supports integrated solutions. Not just modules, but inverters, mounting structures, lithium batteries, and storage systems are all zero-rated. Bangladesh's Energy Minister has made it clear that "solar expansion must go hand in hand with battery storage to ensure reliability and roundtheclock supply." This means complete "PV + storage" solutions enjoy a fullchain cost edge.

      Fourth, enormous market demand. Bangladesh aims to add 10 GW of new renewable capacity in the near future. Industry analysis projects the solar market will reach 3.9 GW by 2030, at a CAGR of 38.6%. The Energy Minister's target of 5,000 MW of solar generation further underscores the scale.

     The Chairman of the Bangladesh Sustainable and Renewable Energy Association (BSREA) noted that these incentives demonstrate the government's strong commitment to renewables. Long-term tax incentives, combined with whole-industry chain cost reductions, are expected to fully activate the Bangladeshi solar market.

4. What Should Exporters Do Now?

01 Review your product portfolio and confirm dutyfree eligibility

     Check the exemption list above to see if your products are covered – modules, inverters, mounting, lithium batteries, storage systems, BMS, solar cables – most core PV products are included.

02 Re-quote to turn tariff savings into competitiveness

 Previously, quotations had to factor in 26%–58% duty costs. Now that these are zero, you can choose to:

   ·Lower prices to win orders – undercut competitors significantly; or

   ·Maintain prices and double your profit margins – savings go straight to the bottom line.

     Tailor your approach according to customer type and market strategy.

03 Monitor local manufacturing incentive policies

     Bangladesh is also promoting local manufacturing of renewable energy equipment with supporting policies. For companies considering capacity relocation, this is worth watching – low labor costs, tariff preferences for exports to Europe and the US, plus local manufacturing incentives could make Bangladesh the next Southeast-Asia-level manufacturing hub.

04 Use trade data to identify buyers

 The policy window is only 5 years. First movers win. Use customs data to find out:

   ·Which Bangladeshi companies are importing solar equipment?

   ·What are their procurement frequencies and volumes?

   ·Have your competitors already entered?

     While others are still hesitating, compile your prospect list now. Direct access to genuine buyers reduces customer acquisition costs and boosts conversion efficiency.

05 Pay attention to certification and compliance

     While solar equipment enjoys zero import duties, standard import tariffs in Bangladesh generally range from 0%–25%. Even with duty exemptions, you still need to comply with local product certification and customs clearance requirements. Secure relevant certifications in advance to avoid entry barriers.

5. Risk Reminders

   ·Policy implementation timeline: The budget proposal still awaits final parliamentary approval – monitor the official effective date.

   ·Local manufacturing competition: Bangladesh is nurturing domestic PV manufacturing, which could become a long-term competitor.

   ·Payment risks: Bangladesh faces foreign exchange reserve pressure – be cautious with LC settlement risks. 

   ·International competition: Global PV overcapacity may intensify price wars.

     Bangladesh's policy represents a structural dividend lasting over 5 years. From 1.5 GW to 5 GW or 10 GW, the market's value will only grow. For exporters of PV modules, inverters, and storage systems, now is the best time to enter. The policy is in place, demand is clear – the only question left is: Will you move, or wait?