Bangladesh interim government has decided in principle to set up a military-focused economic zone in Chattogram’s Mirsarai, clearing the way for Bangladesh’s first dedicated defence industrial hub aimed at producing essential military equipment for domestic use and future exports, officials said on Monday.
The policy decision was taken at the fourth meeting of the Bangladesh Economic Zones Authority (BEZA) governing board, chaired by Chief Adviser Prof Muhammad Yunus.
The meeting also approved plans to set up the country’s first Free Trade Zone (FTZ) in Anowara, Chattogram, repurpose the Kushtia Sugar Mill into an industrial park, and update the national economic zone master plan as part of a broader push for planned and strategic industrialisation.
Briefing reporters after the meeting, BEZA and Bangladesh Investment Development Authority (Bida) Executive Chairman Chowdhury Ashik Mahmud Bin Harun said around 850 acres of land at the Mirsarai National Special Economic Zone (NSEZ) will be developed as a Military Economic Zone, also referred to as a Defence Industrial Zone.
The land had earlier been earmarked for an Indian government-to-government (G2G) economic zone, but the project was later cancelled, leaving the site vacant. “As the land was available, a policy decision has been taken to designate it as a defence industrial zone and include it in BEZA’s master plan,” Ashik said.
He said the zone will focus initially on the production of basic military equipment and supplies, such as ammunition and key components, which have proven critical in recent global conflicts.
“In many wars, shortages are not in high-technology items but in essentials like bullets or tank axles. Without these, there is no opportunity to fight,” he said, underscoring the importance of building captive domestic capacity.
According to Ashik, the initiative has both strategic and economic objectives. Beyond ensuring supply-chain security for the armed forces, the government sees growing global demand in the defence industry and believes Bangladesh can gradually enter the market as a manufacturing participant.
Several countries have expressed interest in investing in the zone, though details cannot be disclosed due to security considerations, he added.
The proposal has been developed through long-term coordination among the Armed Forces Division, BEZA, the Chief Adviser’s Office and the Ministry of Defence, and with the governing board’s policy approval, the defence zone will now be formally incorporated into the national economic zone master plan.
Development is expected to take place in phases, with initial work starting on a smaller portion of land before expansion.
Alongside the military zone, the BEZA board approved a policy decision to establish Bangladesh’s first Free Trade Zone (FTZ) on 600 acres of land in Anowara, Chattogram.
Ashik said the FTZ will function as an offshore customs territory, allowing goods to be stored, processed, manufactured or re-exported without customs obligations.
The primary objective of the FTZ, he said, is to reduce lead times for export-oriented industries by ensuring faster access to raw materials.
Citing American cotton as an example, Ashik said manufacturers often lose quick-turnaround orders due to long shipping times. Under the FTZ model, such inputs could be stored locally and accessed immediately, or re-exported to other markets if needed.
He said the concept draws inspiration from global benchmarks such as Dubai’s Jebel Ali Free Zone, which handles trade volumes exceeding Bangladesh’s total annual trade.
However, implementation of the FTZ will require amendments to existing laws, rules and policies, and the proposal will be placed before the Cabinet for final approval. The next elected government is expected to carry out the necessary legal changes.
The board also decided to repurpose the Kushtia Sugar Mill into a full-fledged industrial park under BEZA, acknowledging that many state-run sugar mills are struggling to operate efficiently. The move aims to bring idle industrial land back into productive use.
Ashik said the latest decisions reflect the government’s broader effort to promote planned industrialisation, attract investment in strategic sectors, and make better use of existing land resources while safeguarding long-term economic and security interests.