Bangladesh's largest-ever budget — Tk 9.38 lakh crore — rewrites the rules for electric mobility and solar energy. Here's what it means for the industry, investors, and you.
On June 11, 2026, Finance Minister Amir Khosru Mahmud Chowdhury presented Bangladesh's largest-ever national budget — Tk 9.38 lakh crore — under the theme "Economic Democratisation and Decentralisation: Bangladesh in the Trillion-Dollar Economic March." For the EV, automobile, and energy sectors, this is arguably the most transformative budget in a decade.
For the first time, Bangladesh's budget explicitly positions green energy and electric mobility as structural economic priorities, not just aspirational targets — with hard tax cuts, tiered AIT reductions, and zero-duty import proposals all announced in a single budget speech. The BNP government's first budget signals a full pivot away from fossil fuel dependence.
The FY27 budget creates a deliberate policy asymmetry — punishing fossil fuel dependency and rewarding green transition. Here's the sector-by-sector breakdown.
Bangladesh's EV sector receives its most comprehensive fiscal stimulus package to date. The FY27 budget operationalises key pillars of the Electric Vehicle Industry Development Policy 2025, targeting two-wheelers, electric buses, trucks, and the entire charging ecosystem.
Previous flat AIT was Tk 2,00,000 regardless of vehicle type. The proposed tiered system:
Import duties on e-bike raw materials and lithium-ion batteries proposed to be slashed from 60% to 1% for local EV manufacturers. CPD additionally calls for reducing EV customs duty from 25% to 10% and removing the 20% supplementary duty.
Cabinet has approved sweeping tax exemptions on imported electric buses (min. 17 seats) and trucks (min. 5-tonne capacity). All duties eliminated except a 15% VAT — making electric commercial transport the most incentivised vehicle category in Bangladesh's history.
Duties on charging stations for e-bikes and EVs are proposed to be significantly reduced, removing one of the biggest bottlenecks to mass EV adoption. The government targets 1,200 charging stations by 2027, up from just 14 in mid-2025.
Under the EV Industry Development Policy 2025, EV manufacturers and battery producers receive income tax exemption until 2040, with up to 50% reduction in EV registration fees and AIT exemption until 2030 for qualifying enterprises.
Government extends concessional import benefits beyond assemblers to local EV parts manufacturers, creating backward linkage incentives and reducing the country's dependence on fully-built unit imports.
The budget complements BRTA's drive to formally register the estimated 3+ million unregistered electric two- and three-wheelers operating in Bangladesh, with the 37% duty on fully-built e-bikes retained to push domestic assembly.
The FY27 budget is the strongest EV-positive signal Bangladesh has ever sent. For brands like Yadea, Revoo, Tail-G, and local manufacturers, this translates into lower entry costs, higher formalisation, and an expanding addressable market. For Current market ev 2 wheeler range, the AIT reduction alone could reduce per-unit acquisition cost by Tk 1.5–1.75 lakh at the registration stage, significantly improving retail proposition.
The FY27 budget takes an explicitly punitive stance toward fossil fuel vehicles — raising ICE car import duties, mandating TIN for motorcycle registration, and effectively creating a two-tier tax environment that favours electric mobility over conventional automobiles.
| Vehicle Category | FY26 Tax Burden | FY27 Proposed | Impact |
|---|---|---|---|
| ICE Cars (1,200–1,600 cc) | 132.36% | ~156% | ↑ Price Rise |
| Electric Vehicles (General) | High (25%+ CD + SD) | Reduced / Tiered | ↓ Cost Drop |
| Electric Buses (17+ seats) | Multiple duties | Only 15% VAT | ↓↓ Massive Relief |
| Electric Trucks (5+ tonnes) | Multiple duties | Only 15% VAT | ↓↓ Massive Relief |
| Bicycles (freewheel parts) | 15% | 25% | ↑ Cost Rise |
| Motorcycle Registration (150cc+) | No TIN required | TIN mandatory | ⚠ Compliance Burden |
| EV Raw Materials / e-bike parts | Up to 60% | 1% | ↓↓ Game Changer |
The FY27 budget deliberately escalates costs for imported mid-range petrol/diesel cars (1,200–1,600cc) from 132% to ~156% total tax burden. This is a clear policy signal to consumers and importers: the era of cheap ICE car imports is closing.
Budget speech proposes making TIN (Tax Identification Number) mandatory for registering motorcycles above 150cc. This is a fiscal formalisation measure that widens the tax net while potentially creating friction in the high-volume 150cc+ motorcycle segment.
With higher import duties on finished ICE vehicles and incentives for local EV assembly, Bangladesh Auto Industries Limited (BAIL) and similar domestic assemblers are positioned to benefit from import substitution economics.
Import exemptions for raw materials used in eco-friendly battery manufacturing are extended until 2030, and for semiconductor industry raw materials until 2031 — supporting the EV supply chain's backward integration within Bangladesh.
The conventional automobile sector faces a structurally unfavourable FY27 environment. ICE vehicle importers, dealers, and motorcycle brands above 150cc will face margin compression from TIN requirements and higher import taxes. However, brands with hybrid or EV portfolios — including Mitsubishi, Hyundai, and Rangs — are better positioned. For Motocycles brand, the shift creates a window to reinforce premium EV and scooter positioning vs. conventional competitors.
The FY27 budget's most sweeping incentives are reserved for the solar and renewable energy sector — a near-total rewrite of import duties, a decade-long tax holiday, and the first-ever consumer-facing solar bill rebate in Bangladesh's history.
| Solar Equipment | Previous Total Tax | FY27 Proposed | Status |
|---|---|---|---|
| Solar PV Modules (Assembled) | 28.7% | Near Zero / Duty-Free | ↓↓ Massive Cut |
| Solar Panels (Non-Assembled) | 27.5% | Near Zero / Duty-Free | ↓↓ Massive Cut |
| Solar Inverters / PV Generators | 28.7% | Duty-Free / Reduced | ↓↓ Massive Cut |
| PV-DG Controllers | ~89% | Significantly Reduced | ↓↓ Critical Relief |
| Lithium-Ion Batteries | 25% CD + 20% SD | 5% CD; SD removed | ↓ Substantial Cut |
| Steel/Aluminium Mounting Structures | Taxed | Proposed Waiver | Under Review |
| Battery Pack Housing | Taxed | Proposed Waiver | Under Review |
| Solar Income Tax (Generation Co.) | Standard rates | 0% until 2035 | ↓↓ Game Changer |
Solar power generation companies will receive zero percent income tax until June 30, 2035 under Section 76 of the Income Tax Act 2023. This 10-year horizon gives investors the certainty needed to finance large-scale solar projects.
The budget introduces Bangladesh's first consumer-facing tax rebate: a 5% rebate on electricity bill payments made for solar-generated electricity. This directly incentivises households, businesses, and industries to switch to rooftop solar.
Renewable energy power generation under the BOO (Build-Own-Operate) model gets a 10-year tax holiday: 100% for first 5 years, 50% for next 3 years, 25% for final 2 years — effective from July 1, 2025 to June 30, 2035.
The government's target is to generate 10,000 MW of solar power by 2030. Currently 1,174 MW of solar projects are under implementation. The FY27 duty cuts are designed to close this gap by dramatically reducing project capex.
The budget is expected to support rooftop solar via PDB-backed offtake guarantees and streamlined permitting. Bangladesh's land constraints make rooftop solar the most scalable path — and FY27 removes the primary financial barrier: high equipment costs.
The budget signals future allocation for smart-grid infrastructure, demand-response systems, and battery storage incentives to ensure grid stability as variable solar generation grows. Energy storage system supplementary duties (20%) are also proposed for removal.
The FY27 renewable energy package is the most aggressive Bangladesh has ever announced. Solar equipment going from 28–89% total tax incidence to near-zero, combined with a 0% income tax until 2035, fundamentally changes the investment calculus. Bangladesh spent over $7 billion on fuel imports in FY2022-23 — the budget is betting that solar can displace a significant portion of this import bill. For Major 2 wheeler EV players, the solar incentives also directly reduce charging infrastructure operating costs.
The budget's most sophisticated element is how EV and solar incentives reinforce each other — cheaper solar = cheaper EV charging = faster EV adoption = lower fossil fuel spending = more foreign exchange for development.
Zero-duty solar equipment + 0% income tax makes green charging infrastructure economically viable. The government mandates 30% of EV charging stations to be solar-powered by 2030.
Bangladesh spent $9.6 million on 1.4 million tonnes of fuel imports in H1 2025. Every EV that replaces an ICE vehicle reduces this outflow, improving foreign exchange reserves and current account balance.
Saved foreign exchange from reduced fossil fuel imports can be redirected toward industrial investment, supporting Bangladesh's $1 trillion economy target by 2034.
EV component manufacturing incentives position Bangladesh to enter global EV supply chains — earning foreign exchange rather than just saving it.
The FY27 budget window is time-sensitive. Policy proposals have in-principle approval but require implementation. Here's what matters most for different stakeholders.
Immediately revise pricing and consumer communication to reflect AIT reductions. Reposition on total cost of ownership — the registration saving alone (up to Tk 1.75 lakh) is now a headline-worthy value proposition. Launch TCO calculators.
Activate EMI campaigns with partner banks now — reduced AIT makes EMI structuring more attractive. Floor stock positioning for Peugeot and NSM models should prioritise EV SKUs ahead of Q1 FY27 sales season.
The 0% income tax until 2035 + zero import duty window is the largest solar incentive Bangladesh has ever offered. Rooftop solar + EV charging station bundles now have a viable commercial model — move fast before duty structures shift.
The 156% tax on 1,200–1,600cc cars signals a structural shift. Brands with ICE-only portfolios should accelerate EV model planning or risk being squeezed between rising import costs and falling consumer demand.
CPD is right: even 1% fossil fuel duty vs. 10%+ on EVs is a market distortion. Full policy consistency requires equalising the playing field — next budget should target zero duty on EVs to match fossil fuel incentive levels.
FY27 is the best year in Bangladesh's history to buy an electric two-wheeler or invest in rooftop solar. AIT reductions and solar bill rebates create genuine financial benefit — act before the next budget cycle reverses any provisions.