Bangladesh Zeroes Out Import Duties On Solar Equipment, Opening A Window For Overseas Suppliers

Bangladesh's FY2026-27 budget has cut import duty, regulatory duty, supplementary duty and advance tax on core solar equipment to 0% in one move. It is the largest tax adjustment for the solar sector in years, and a clear signal to overseas exporters and EPC contractors: this South Asian market is shifting from "high tax burden" to "zero threshold."
 

Presenting the budget in parliament in June 2026, Finance Minister Amir Khosru Mahmud Chowdhury announced that the following equipment is now on the duty-exemption list:
 

Solar inverters
 

Lithium batteries, lithium-ion cells, and battery pack housing
 

Solar PV modules/panels
 

Mounting structures
 

Battery Energy Storage Systems (BESS)
 

Battery management systems and battery thermal management systems
 

UV-protected solar DC cables

The exemption periods are not uniform. Duty relief on core equipment - modules and inverters - runs through June 30, 2031. For several supporting categories, including mounting structures, DC cables, and BESS, the exemption is set to expire on June 30, 2028. Industry association representatives have called the move a long-standing demand that has finally been met.
 

How significant is this cut? Most solar equipment imported into Bangladesh previously carried a combined tax incidence of 27.5% to 28.7%, and some storage-related components faced a burden exceeding 60%. Local industry estimates suggested that cutting import taxes to 15% alone could lower installation costs by roughly Tk 500,000 per megawatt. This time, the rate goes straight to zero, and the industry broadly expects a 25-30% reduction in downstream generation costs.

 

Import duty relief is only part of the picture. The budget, together with related policy updates, forms a broader package:
 

Corporate tax: The zero-rate corporate income tax for solar power generation companies has been extended through 2035, giving investors more certainty over payback periods.
 

Consumer side: Households using solar power will be eligible for a 5% tax rebate on electricity, improving the economics of distributed generation.
 

Renewable Energy Policy 2025: Provides a clearer access and operating framework for rooftop solar and distributed generation projects.
 

Net Metering Guidelines 2025: The government is concurrently revising net metering rules to encourage grid connection for residential and commercial distributed solar.
 

The president of the Bangladesh Sustainable and Renewable Energy Association (BSREA) had previously noted publicly that once inverter duties came down, other related taxes would follow - a prediction this budget has largely fulfilled.

 

Bangladesh's renewable energy share remains low, and its power system remains heavily dependent on imported fuel. The ruling party has written a 20% renewable energy target by 2030 into its election platform. That suggests procurement demand for modules, inverters, and storage equipment is likely to keep rising over the next few years.
 

For module, inverter, and battery manufacturers, a few practical considerations follow:
 

The cost structure has changed. With duties at zero, landed-price competitiveness now depends mainly on ex-works pricing and logistics costs, rather than being eroded by import taxes.
 

The policy window has an expiration date. Exemptions on mounting structures, DC cables, and BESS end in mid-2028. Companies that move early will capture the full benefit period.
 

Local industry protection is part of the conversation. Bangladesh's domestic solar module manufacturers association has raised concerns that without adequate protection, local manufacturing capacity could erode further. This suggests overseas suppliers should factor local partnership and channel strategy into their pricing and market-entry plans, rather than relying solely on finished-product exports.
 

Grid-side execution still has friction. Bangladesh Power Development Board (BPDB) has previously seen solar tenders go unfilled. This is a reminder that translating policy tailwinds into actual project pipeline still depends on tender terms, interconnection processes, and other execution-level details.
 

Bangladesh has taken solar equipment import taxes from close to 30% down to zero in a single step, paired with a long-term corporate tax holiday and an improving net metering framework. This largely closes the gap between the country's previously "policy-friendly but tax-heavy" positioning. For solar and storage companies evaluating the South Asian market - or already active there - the next one to two years will be the key window to watch for how orders convert and how the policy plays out on the ground.
 

This article is compiled from public reporting on Bangladesh's FY2026-27 budget and public statements from industry associations. Specific tax rates, HS code classifications, and scope of application should be confirmed against official notifications from Bangladesh's National Board of Revenue (NBR). Companies are advised to verify current details with local compliance advisors before making customs filings or investment decisions.