Flourishing BD-Japan Bilateral Relationship and Untapped Potential

Bangladesh has resumed direct trade with Pakistan for the first time since 1971, marking a significant milestone in bilateral relations. Under a government-to-government deal, Bangladesh has purchased 50,000 tonnes of white rice from Pakistan at $499 per ton, with the first shipment departing from Port Qasim.

Over the past 16 years, Bangladesh’s trade relations with Pakistan were strained under the Awami League government, but a shift is occurring following a change in government. Trade with Pakistan has increased, while trade with India has slightly decreased.

The European Union (EU) seeks to deepen collaboration with Bangladesh through a Comprehensive Partnership and Cooperation Agreement (CPCA), aiming to bolster trade, governance, and policy alignment. In 2024, Bangladesh exported $18.15 billion worth of garments to the EU, which accounts for over 64% of Bangladesh's apparel exports.

In the first five months of fiscal year (FY) 2024-25, Bangladesh's trade deficit decreased by 20 percent to $7.88 billion compared to $9.85 billion in the same period of FY24.

China remained Bangladesh's largest trading partner in FY24, with bilateral trade reaching Tk 2.246 trillion, according to the Bangladesh Bureau of Statistics (BBS). In contrast, India ranked second with Tk 1.463 trillion. China’s share in Bangladesh’s total trade rose to 15.17% in June FY24, while India’s dropped to 8.47%. Bangladesh imports industrial raw materials and consumer goods from China, exporting jute products and hides in return.

Bangladesh's economy is gradually rebounding from domestic and global challenges, with improvements in foreign-exchange reserves and trade activity during the October-December quarter of FY25, according to the Metropolitan Chamber of Commerce and Industry (MCCI). However, its quarterly report for July-September FY25 warns of pressing issues, including high inflation, reduced external demand, sluggish public spending, and weak investment activity.