Industry Bengal had been a centre of trade and commerce, arts and crafts from ancient times. tamralipti, the largest port town of 5th century Bengal is known to have had trade connections with South India, Ceylone (Sri Lanka), Burma (Myanmar), Malaya (Malayasia), Persian Gulf, and the Far East. Main industries developed in the period included textiles, sugar, salt, ivory, and metal work. Arab traders played an important role in establishing trading links between chittagong and the outside world in the 8th century. boat building activities developed in Bengal before the start of the Christian era. The muslin of dhaka earned global fame as early as 325 BC. Bengal has a history of exporting textiles, sugar, salt, and jewelry even before 500 AD. handicrafts also flourished around 600 AD. The manufactures, however, were limited to only a selected group of items for long and their expansion and diversification were slow until the 17th century.

The Mughal period witnessed a steady growth and expansion of manufacturing in Bengal, thanks to visits of European maritime companies. Foreign participation in the export market gave new impetus to industrial development. The economy became increasingly monetised, capital accumulation accelerated, and consequently, new markets and production centres were developed. Expansion of production and marketing popularised use of commercial papers leading to development of banking and even insurance. Major occupational groups that contributed to the development of indigenous industry in Mughal Bengal were the spinners, tantis (weavers), sutradhars (carpenters), and kumars (potters). Fine textile products became profitable export items from the 17th century. With the expansion of markets, sugar production increased. Manufacture of salt from sea water and sub-soil brine developed to a great extent in the 17th century. Other manufactures developed in Bengal by this period included farm implements, hardware and weapons, bronze casting, ivory carving, woodworks, embroidery and jewelry.

British period Textile was a cottage industry in Bengal before the establishment of British control over India. mahajans played an important role in financing production and trade of textiles. The east india company provided loans to weavers through dadni and under an agency system. Mahajans, and agents and representatives of the Company tortured weavers for their failures in fulfilling terms of their contracts. This forced a large number of weavers to leave their profession, which checked the growth of the once flourishing textile industry in Bengal. In 1776, the number of persons involved in textile industry in Dhaka district alone was 146,751, of whom 25,200 were weavers and the rest spinners. Many other places had also become famous for textile production in Bengal during the British period. These included Maldah, Haripal and Sripur of rajshahi, Balikushi and Kagmari of mymensingh, Bardhaman, Khirpoy and Radhanagar of Midnapore and Shantipur and Buron of Nadia. The indigenous textile industry, however, declined because of newly imposed tariff and non-tariff barriers created for Indian textile products in the British market as well as the development of the textile industry in Britain after the Industrial Revolution. But British rule also contributed to some development through promotion of marketing Bengal textiles abroad through the English trading system as well as through allowing other foreign traders to pursue the trade.

The silk industry of India was concentrated mainly in Bengal. It received special attention from the British from the very beginning of their rule in India. The East India Company established silk factories, promoted culture of cocoon, and organised exports of silk abroad. murshidabad, part of which is in Rajshahi now, was the main centre of cocoon culture and production of silk. The silk industry of Bengal declined towards the mid-nineteenth century in the face of competition from the cheap silk of China and Japan as well as from rapidly falling prices of substitute textile cloths produced in Britain.

The East India Company developed a shipbuilding industry at calcutta through construction of a dock and creation of facilities for repair and furnishing of merchant vessels and warships. Both British and local companies used these facilities for building, repairing, and furnishing ships with the help of local workers who had skills in building large boats and who were retrained for shipbuilding.

Other major industries of Bengal that underwent development during the British period were the salt and sugar industries. The Company government earned a huge amount of revenues in the form of tax on trading in salt, which had two effects. One, salt production increased under the patronisation of the government and two, because salt prices soared as a result of enhanced taxes that created problems for average and poor consumers, traders were encouraged to adulterate the product. In the mid-nineteenth century, the British government imposed an import tax on salt at par with the tax on the item produced locally. This, along with the higher quality of imported salt, caused the decline of the indigenous salt industry in Bengal.

Production of sugar in India during the 18th century was concentrated mainly in Benaras. Bengal became prominent in sugar industry towards the end of the century. Taking advantage of the high prices of sugar in England and the destruction of the sugar producing black communities in Haiti and St. Domingo, British rulers exported Bengal sugar to Britain and other parts of the world. By 1830, many places of Bengal including Gorakhpur, Azizpur, Matihari, Belsunda, Barchakia, Rosa and Dubah had modern steam driven sugar mills. Bengal lost the English market in 1846, when the British government changed customs rules, allowing import of sugar to Britain from outside the British Empire under parity in customs rules. Development of beet sugar production in Europe at competitive costs also restricted export of Bengal sugar to England. Technological advances in production of sugarcane and sugar in Java, Mauritius and Formosa reduced the international price of sugar to a level lower than its production cost in India. All these factors caused a decline in the sugar industry in Bengal. Bengal however, excelled in production of gud (molasses) from sugarcane, palm and palmyra palm. Nevertheless, thanks to the popularity of molasses as a cheap and nutritious food ingredient and to the large domestic market, the sugar industry continued to survive in Bengal.

A major feature of industries in Bengal during the British period was the development of narrow specialisation in crafts, especially in the cottage industry sector. The mostly caste-based specialisation that existed in India through centuries continued to flourish during the British period. In many cases the British, as well as local traders, promoted the development of these cottage industries, while in many other cases, local craftsmen were put under difficulties, including physical torture, to force them out of business and to make room for imported products (for further details about industry in Bengal in the period before 1947, see industrialisation).

Pakistan period After the partition of bengal in 1947, East Pakistan inherited a very small share of the industries of Bengal. East Pakistan got none of the 108 jute mills, 18 iron and steel mills and 16 paper mills of Bengal. Only 90 of Bengal's 389 cotton mills, 10 of its 166 sugar mills, and 3 of its 19 cement factories fell in the territory of East Pakistan. The cement factory at chhatak (sylhet) had to depend upon limestone supplied from Assam (India). The cotton mills of East Pakistan also had to depend upon imported raw materials. The 1951 Census revealed that East Pakistan had 63,234 unskilled non-agricultural labourers, 115,480 skilled labourers engaged in manufacturing sector, 184,535 mining and quarry workers and 121,522 professional persons. The manufacturing sector (comprising mainly the food, drink and tobacco processing units) employed a total of 602,875 persons (4.67% of the total labour force), of whom 430,148 were involved directly in production processes and 172,727 in subsidiary activities. There was a total of 360,603 cottage enterprises, which employed 949,074 persons. Of the manufacturing units, only about 200 enterprises used power.

The industrial development policy of the government of Pakistan encouraged the manufacture of arms and ammunition, hydroelectric power, railway wagons, and telephone, telegraph and wireless reserved for the state and encouraged the private sectors to come up with industrial ventures in all other sectors. Twenty-four industries including jute, textiles, silk and rayon were subjected to central planning. The government created the Pakistan Industrial Development Corporation (PIDC) and Pakistan Industrial Finance Corporation to promote industrialisation. PIDC made significant contributions in the establishment of industrial units in sectors such as jute, paperboard, cement, fertiliser, sugar, chemicals, textile, pharmaceuticals, light engineering and shipbuilding. The central government, however, followed a discriminatory policy. It favoured West Pakistan in industrial development and drained resources from East Pakistan for the purpose. It also directed most of Pakistan's external resources to the cause of the industrial development of West Pakistan. Non-Bengalis dominated the list of entrepreneurs coming up with new industrial ventures in East Pakistan. Local capital hardly got the opportunity to flourish. The central government had control over product pricing to such extent that products grown or manufactured in East Pakistan were sold in the local market at prices higher than in West Pakistan.

Despite all these impositions, however, some progress was made in industrialisation in East Pakistan during the period between 1950 and 1970. The number of industrial enterprises in East Pakistan in different sectors in 1970 were: food manufacturing - 408, beverage - 6, tobacco processing - 26, textile - 792, footwear - 204, wood and cork - 14, furniture - 70, paper products - 33, printing and publishing - 14, chemical products - 572, petroleum and coal products - 3, rubber products - 3, mineral products - 53, basic metal - 35, metal products - 257, non electric machinery - 88, electrical machinery - 34, transport equipment - 65 and other goods - 166. Official sources of the government, however, recorded that in 1970, there were 1,580 manufacturing units in East Pakistan that employed 206,058 persons. Their gross output was valued at Tk 3.636 billion and the value added amounted to Tk 1,708 billion. The share of the manufacturing sector in the GDP was 8.9% in 1970 as compared to 3.9% in 1950.

Bangladesh period The industry sector was severely damaged during the war of liberation in 1971. Replacement and rehabilitation costs estimated for the industries were estimated at Tk 291 million, of which Tk 223 million was estimated for public sector enterprises. The public sector started in 1972 with 72 jute mills (with production capacity of 79,200 tons), 44 textile mills (13.4 million pounds), 15 sugar mills (169,000 tons), 2 fertiliser factories (446,000 tons), one steel mill (350,000 tons), one diesel engine unit (3,000) and one shipbuilding yard. Mills and factories in the public sector however, soon became losing concerns largely because of mismanagement and leakage of resources. The government had to quickly review its policy of dominating the public sector. Although it continued to exercise control over industries, it soon raised the allowable ceilings of private investment. However, this did not bring much improvement.

After a series of adjustments and temporary changes in state policy, the government finally adopted a new industrial policy in 1982, following which 1,076 state-owned enterprises were handed over to private owners. Unfortunately, denationalisation created a new problem of industries. They started getting sick because of failures of the inexperienced owners. Many of them were more interested in getting ready cash from selling of the cheaply acquired property than in sustaining and developing the industries. The result was that industrial sickness affected 50% of industries in food manufacturing, 70% of them in textile, 100% in jute, 60% in paper and paper board, 90% in leather and rubber products, 50% in chemicals and pharmaceuticals, 65% in glass and ceramics, and 80% in engineering industries.

The largest group of industries in Bangladesh falls in the category of small and cottage industries and their number in 1984 was 932,200 units, of which 20.7% were in handlooms, 15.4% in bamboo and cane work, 8.1% in carpentry, 6.1% in products from jute and cotton yarn, 3.4% in pottery, 0.3% in oil crushing, 3.2% blacksmiths, 0.8% in bronze casting, and the rest in other types of crafts. Weavers work in almost all parts of Bangladesh but their major concentration is in areas like narsingdi, baburhat, homna, bancharampur, bajitpur, tangail, shahjadpur and jessore. The silk industry has flourished in Rajshahi and bholahat. Other places earning reputation in cottage industries during the 1980s in Bangladesh include Chapai nawabganj and Islampur (bronze casting), Sylhet (mat and cane furniture), comilla (pottery and bamboo work), cox's bazar (cigar), barisal (choir) and rangpur (checkered carpet).

In 1984, Bangladesh had 58 textile mills with 6,000 looms and 1,025,000 spindles. The annual production of the mills was 106.2 million pounds of yarn and 63 million metres of cloth. Textile is a public sector dominated industry in Bangladesh and like most other sectors, textile also incurred losses, which amounted to Tk 353.4 million in 1984. Problems in the sector include poor management as well as difficulties in developing skilled workers and shortage in supply of raw material and power. Bangladesh had 70 jute mills with 23,700 spindles in 1984. These employed 168,000 workers and 27,000 other staff and used 545,000 tons of raw jute. But their production was less than the 561,000-tons figure of 1969, when the country had 55 jute mills with 21,508 spindles. The three major centres of jute industry in Bangladesh are Dhaka, Chittagong and khulna. The jute industry in the country has been declining in the face of competition from India and in an international situation, where jute goods are being replaced by cheap and durable plastic products.

Development of new industries like sulphuric acid, chemicals, paper, caustic soda, glass, fertiliser, ceramics, cement, steel and engineering in Bangladesh was slow in the period before 1985. There were only two plants for production of sulphuric acid in the country in 1985 and their total production was 5,995 MT, while the production of this important ingredient for industries like soap, paper, cast iron and steel was 6,466 MT in 1970. Production of caustic soda in 1985 was 67,87 MT. The soda was used almost entirely in paper mills. Because of availability of sand, salt and limestone within Bangladesh, the country has a good prospect in developing its glass industry. Dhaka and Chittagong are the two major centres for this industry. The automatic glass factory at Kalurghat of Chittagong produced 12.9 million sq ft of sheet glass in 1985.

The fertiliser industry in the country uses natural gas as the main raw material. The fertiliser factories produced a total of 808,660 MT in 1985. 741,463 MT was urea, 9,634 MT ammonium sulphate, and 57,563 MT triple super phosphate. The three major factories were at fenchuganj, Ghorasal and Ashuganj. The total production of cement in the country in 1985 was 292,000 MT. The major industries were at Chhatak and Chittagong. Pakshi of pabna and Chandraghona of Chittagong were the main locations for the paper industry in Bangladesh. The total production of paper in 1985 was about 75,00 MT. In 1985, Khulna had a newsprint mill with a production capacity of 55,000 MT and a hardboard mill that produced 1,621 sq metre of hardboard. Around this time Bangladesh also had some mills for production of particle boards and partex. The country also achieved self-sufficiency in producing matches; major centres of match production were Dhaka, Khulna, Khepupara, Chittagong, Sylhet, bogra and Rajshahi. The total production was 1.30 gross boxes in 1985. That year Bangladesh had 8 sugar mills with a total annual production of 87,000 tons. The sugar mill at Darshana (ishwardi) produced sugar as well as alcohol, methilated spirit and rectified spirit. The iron and steel mills in Bangladesh were mostly under the Steel and Engineering Corporation and were concentrated in Chittagong and Dhaka, although there were some steel and ironwork enterprises in Khulna, kushtia and Bogra.

Industries marked by notable development in Bangladesh in the mid-1980s include shipbuilding, automobiles (assembly), oil refinery, insulators and sanitary wares, telephone equipment, electrical goods, televisions (assembly), cigarette, and vegetable oil. The country achieved a significant success in developing garment industry in this decade. The government followed a strategy of planned growth blended with 'free play' of market forces. The manufacturing sector showed some growth in the 1990s. The share of the manufacturing sector in the country's GDP rose to 11% in 1996. Investment in the sector was Tk 57.8 billion in 1997 as compared to Tk 22.5 billion in 1991. The share of the public sector in the total investment in the country's industries fell from 37.03% in 1991 to 8.63% in 1997. The basic industrial statistics as adopted from the latest census of manufacturing industries in Bangladesh are presented in a table (the census did not cover the cottage industry sector).

Table Industry of Bangladesh in 1991

The government continues to implement a privatisation programme to hand over public sector enterprises to private owners. Simultaneously, the government implements a programme of rehabilitating industries identified as sick because of various reasons. Industries identified for rehabilitation under the programme in 2000 included one cement factory (annual production capacity 0.15 million tons), one paper mill (30,000 tons), one newsprint mill (52,000 tons), 6 cigarette factories (630 million sticks), 8 oil mills (934,818 tons), 2 food processing units (950,400 tons), 2 fish processing units (6.9 million tons), 2 cold storages (5.9 million lbs), one beverage producing unit (4.3 million bottles), 3 chemical industry units (26,100 tons), one glass factory (7.5 million feet) and 12 pharmaceutical units. The fifth Five-Year Plan for the period 1997-2002 stipulated a total outlay of Tk 8.95 billion in industry including Tk 1.39 billion in the private sector. In 2000, the total employment in industries was estimated at 0.6 million, of which the private sector employed 0.5 million.

Industrialisation efforts of the government during the 1990s included investment in balancing, modernisation and reconstruction, creation of new industrial estates and export processing zones, promotion of private investment, and attraction of foreign direct investment. The policy changes have been in line with trends in the international market, recommendations of donor countries and agencies for liberalisation of trade and investment, and structural adjustment programmes. Almost at regular intervals of 4 to 6 years after 1982, the government adopted new industrial policies with increased incentives for private investors from both home and abroad. These policies have some common aspects such as incentives to promote industrialisation in rural and remote areas and to encourage entrepreneurs to use local raw materials, and the efforts towards development of a system that would help in transfer of technology. [M Habibullah and S M Mahfuzur Rahman]