Bangladesh's mobile market has grown rapidly with rising incomes and smartphone use, yet the industry has been steadily hollowed out by a fast-expanding grey market that undermines the formal ecosystem.
First Years of the Grey Market
Early signs appeared quietly: unfamiliar brands in small shops, phones without warranties and unusually low prices. Even as consumer demand rose, official distributors saw revenues shrink. Multinational brands that had invested in factories, retail networks and service centres suddenly faced competition from devices that bypassed regulatory costs. Government tax receipts from handset imports also began to fall, signalling a widening problem and raising concern across the still-nascent local manufacturing industry.
Rise of an Unchecked Market
Official companies began shifting to local production in 2017–18, strengthening the industry and lifting revenues; FY2021–22 saw sales reach 13 million units. This stability collapsed after the 2022–23 VAT changes. The previous 5 per cent VAT was replaced with levies at every stage of the supply chain, pushing up costs and contributing to an almost 35 per cent production drop by FY2024–25.
Higher prices drove consumers toward the grey market, where industry estimates indicated that about one in three devices sold, and in some assessments 50–60 per cent of the market, were unofficial. The impact was severe. Official manufacturers saw revenues fall sharply, while companies that once paid significant VAT, import duties and corporate taxes struggled to stay profitable. Planned investments in local assembly stalled as grey imports bypassed both duties and compliance.
Distributors closed, authorised retailers saw margins shrink to unsustainable levels, and unofficial sellers expanded rapidly without regulatory costs. Job losses followed across retail, logistics and assembly. The government forfeited hundreds of crores in annual revenue that could have supported healthcare, education or infrastructure. The need for a corrective mechanism became unavoidable: Bangladesh required a system capable of protecting both public revenue and consumer safety.
NEIR: Towards a solution
NEIR is straightforward: every mobile phone must be authenticated through its IMEI to access Bangladesh's networks. Registered devices stay active; unregistered ones do not. Countries like Turkey and India use similar systems to curb smuggling, support local manufacturing and protect consumers.
Implementing NEIR, however, required coordination across agencies. NBR, BTRC and law enforcement assessed the scale of grey-market inflow, while media reports highlighted the risks of unofficial devices. Brands such as Samsung also ran awareness campaigns to educate consumers. Gradually, a broad consensus emerged that NEIR was essential not just as a technical safeguard but as a policy measure to protect jobs, revenue and long-term industry stability.
Reinstatement: A Turning Point
The government's decision to reinstate NEIR is a major turning point for Bangladesh's digital future. It signals a shift toward long-term market stability.
NEIR also aligns Bangladesh with global best practices. Countries like Turkey and India saw major revenue gains and sharp reductions in counterfeit and stolen devices after adopting similar systems. Bangladesh stands to recover a large share of taxes previously lost to smuggled handsets, strengthening its development budget.
The system further supports manufacturing and FDI by creating a predictable, fair market. Local assembly plants can expand, new factories can open and jobs can grow across production, engineering, logistics and service networks.
For consumers, NEIR delivers safer, verified devices backed by proper warranties. It does not raise handset prices; it simply ensures buyers receive genuine, compliant phones.
A Collaborative Future Ahead
As NEIR will become operational from December 16, official mobile companies remain committed to working closely with the government to ensure its success. Multinational brands such as Samsung can collaborate even more deeply with regulators to strengthen compliance mechanisms and support initiatives that bring unofficial sellers into the formal economy.
There is also a meaningful opportunity here: those who previously operated in the grey market can now become official distributors/authorised retailers. They can continue running their businesses, only now with better protection, better product quality, and full alignment with the law.
