What do you mean by 'internal market'? Type-56 along with others serve today in the armed forces.
Simply put it, it is not that hard to design, engineer and manufacture an assault rifle given that we have the knowledge means.
The Type-56 (AK-47 knockoff) is an extremely simple design. Even a villager can make one these days with basic mechanical tools.
Although, I admit we do not have research into composite material technology a key element in the design of modern small arms. Or even have foreign collaboration. Having a 20 lb piece of metal as the final result won't bring any benefit.
As I said, it is all about means to knowledge. And of-course, composite materials would have export potential if brought into production. They have a wide variety of applications (including military). BD cannot leverage on the RMG sector forever.
We have become an excessively dependent nation (sadly). Let's not confuse between that and effective collaboration.
Knowledge is power as they say.
First off, Japan doesn't export weapons or offer ToT to anyone due to its pacifist stance. And even if they do at some point in the future, they would be extremely expensive as far as advanced systems are concerned.
Secondly, what is ASEAN going to do? It is a completely useless organization in terms of security matters. Did the organization effectively do anything about the flow of refugees coming from Burma to other ASEAN members? No, they did or even say nothing. It's a spineless and a profit-oriented organization.
And what's more, none of them have any significant military industry.
But it serves as a good economic forum. And that's as far as it should be.
And finally, I do think that Korea would offer us good stuff. But I doubt if they'd offer us some of their best technologies. The best we can do is collaborate with China or even Turkey can be a great potential partner. Especially in missile technology (which definitely needs foreign collaboration).
I am aware that AK-47 knockoffs are being made by villagers in Pakistan and Afghanistan and I myself ordered and made lathe machine in Dholaikhal area. So I know it is very much possible. But the difference is in the metals, forging technique etc.
Japan's pacifist stance will change, question is when, my guess in 5-10 years. ASEAN is just like us, a market and team partner, they are not the source of technology. What they do is increase market size, a benefit for any joint project. Let's not bring refugee issue into this, we are not applying for ASEAN membership here, just teaming up for military projects for mutual benefit.
So that leaves us Korea, who is involved with our army as mentioned in OP. The problem with Korea is that it is controlled by the US, including its politics. There is a more independent minded political party, supported by Buddhists and Southwest part of the country, but the chaebols, Christians and Southeast currently rule and they are controlled by the US. The independence minded party wants to see less control of the US and more cooperation with Asian countries. Eventually they will come to power and the policy will change. But even now, I believe the possibility for cooperation exist.
China and Turkey none are at par with Korean abilities, if they are given a chance. Korea is an opportunity for small countries in Asia, if we decide to utilize their talent. Turkey may want to join the team and they should be welcome. Turkey is not an alternative for Korea, in my opinion.
Unlike Korea, China will not share with us the best technology or team up with us for manufacturing. Their ToT will limit production for Bangladesh consumption and will not allow export to third country. On the other hand, Korea has no strategic reason not to share its best technology with its partners and team members. Unlike China, a huge country of billion plus population, Korea a small country of around 40 million, need partners like us and others. That is why they are already here manufacturing RMG using our human resources, but they do it in other places in Asia too, including China.
With all due respect to Japan and Korea but I doubt they can beat Russia or China for that matter in military hardware. Besides, our investment policy prohibit any private participation in defense industry. With the nature of our people, it is very unlikely that govt will allow private companies to produce fire arms.
Japan or Korea, can beat Russia or China any day in any technology, they are not being allowed to spread their wings and team up with others, because of US control and dependence, which is slowly melting away.
We are not talking about private industry, but govt. level cooperation. But D300 is being made by Daewoo, so some big companies may be involved in Korean side, but not Bangladesh side, where only govt. will be involved. I have no professional or financial interest in any arms industry in any way, I am just discussing our national strategy of weapons sourcing for future.