Bangladesh moves to establish drone factory under Tk608cr deal with China

Bangladesh is preparing to sign a government-to-government agreement with China to create a military drone manufacturing facility aimed at boosting the country’s air defence strength.

Ahead of the signing, the finance ministry cleared a project titled Establishment of Manufacturing Plant and Transfer of Technology for Unmanned Aerial Vehicles on 6 January. The project is valued at Tk608.08 crore, including Tk570.60 crore for importing and installing the plant and required technology.

Funds will be released across four years: Tk106 crore in the current fiscal year, Tk155 crore each in FY2026-27 and FY2027-28, and around Tk154.60 crore in FY2028-29. Another Tk37.47 crore will cover local expenses such as LC opening fees, VAT and SWIFT charges.

Asked about the approval, Finance Adviser Salehuddin Ahmed declined to comment, saying discussions on fighter aircraft purchases and drones were still ongoing.

The project, to be carried out by the Bangladesh Air Force, will use technology supplied by China Electronics Technology Group Corporation (CETC) International, a state-owned defence electronics giant. Officials expect domestic manufacturing to reduce future dependence on foreign drones.

ISPR said it was yet to receive information from the Air Force on the development.

The finance ministry’s approval followed endorsement from Chief Adviser Muhammad Yunus in his role overseeing the defence ministry. The government noted that no additional funds would be required, as spending can be drawn from the Air Force’s existing machinery and equipment allocations.

Policy approval for procurement was earlier granted by a joint armed forces committee after negotiations, with payments set across either FY25–FY28 or FY26–FY29.

A coordination meeting in September 2025, chaired by Bangladesh Investment Development Authority Executive Chairman Chowdhury Ashik Mahmud Bin Harun, confirmed the partnership with China for a UAV production line and technology transfer. Attempts to reach him for further comment were unsuccessful.

Approval came with five financial conditions, including using existing allocations this year, managing future spending within annual budget ceilings and ensuring payments occur through LCs and follow government rules.

CETC initially quoted Tk643.61 crore, including shipping, before the price was renegotiated down by Tk35.53 crore.

CETC describes itself as China’s largest electronics and defence technology corporation, developing systems such as radars, communication platforms, electronic warfare tools and UAV equipment. The company also supplies technologies for public security, e-government and intelligent transport across more than 110 countries.

Source: The Business Standard.