BD-NP Trade_General Information

Bangladesh, Creating A Positive Economic Outlook

1. Growing GDP: Bangladesh's economy has been experiencing consistent and robust growth, with a GDP growth rate averaging over 6% in the past decade. This growth is driven by various sectors, including manufacturing, textiles, and services, which are attracting foreign investment and contributing to the overall development of the country.

2. Strategic geographic location: Bangladesh's strategic location between South and Southeast Asia makes it an ideal hub for regional trade. It shares borders with India and Myanmar and has convenient access to other Southeast Asian countries. This allows for easier trade and investment opportunities, attracting businesses looking to tap into larger regional markets.

3. Investment-friendly policies: The government of Bangladesh has been implementing several policies to attract both local and foreign investment. These policies include tax incentives, duty-free importation of capital machinery, and simplified procedures for business formation. The government is also actively engaged in implementing structural reforms to create a more business-friendly environment.

4. Expanding export market: Bangladesh has emerged as a leading exporter in the global market, particularly in the textile and garment industry. The country's low-cost labour and competitive production capabilities have made it an attractive sourcing destination. It has diversified its exports by focusing on value-added products, which has further strengthened its position in the international market.

5. Infrastructure development: The government of Bangladesh has made significant investments in infrastructure development, including the construction of ports, roads, and bridges. These improvements have facilitated trade activities and enhanced connectivity with neighbouring countries, enabling smoother movement of goods and services.

6. Strong domestic demand: Bangladesh's growing middle class and rising disposable incomes have led to increased domestic demand for goods and services. This presents opportunities for both local and foreign businesses to tap into a large consumer base, promoting economic growth and attracting investment.

7. Low labour costs: Bangladesh offers a competitive advantage in terms of labour costs, making it an attractive destination for labour-intensive industries. The abundance of skilled and semi-skilled workforce, coupled with lower wage rates compared to other countries, has driven foreign investors to set up manufacturing operations in Bangladesh.

Bangladesh- Nepal Trade Relationship

Bangladesh and Nepal share a bilateral trade relationship that has been growing steadily over the years. Both countries are located in South Asia and have recognized the importance of strengthening economic ties to promote mutual growth and development. The Bangladesh-Nepal trade relationship has been growing steadily, albeit with some challenges. Both countries are actively working towards overcoming these challenges and exploring new avenues for trade and investment. The future prospects for the bilateral trade relationship are promising, driven by mutual cooperation, improved connectivity, and the identification of new trade opportunities. With sustained efforts, Bangladesh and Nepal have the potential to foster a robust and mutually beneficial trade partnership in the years to come.

Trade Volume:

The trade volume between Bangladesh and Nepal has witnessed significant growth in recent years. In the fiscal year 2022-2023, the total trade volume between the two countries amounted to approximately $49 million, with Bangladesh's exports to Nepal valued at around $44.33 million and imports from Nepal accounting for $4.34 million. Although the trade volume is relatively modest, it has been on an upward trajectory, and both countries are actively exploring avenues to further enhance bilateral trade.

Key Commodities:

Several commodities form the backbone of Bangladesh-Nepal trade. Bangladesh's major exports to Nepal include textiles, readymade garments, jute and jute goods, pharmaceutical products, ceramics, processed food items, and consumer goods. On the other hand, Nepal primarily exports pulses, lentils, spices, medicinal herbs, fruits, and handicrafts to Bangladesh. The bilateral trade primarily consists of goods, but efforts are being made to diversify and expand trade in services as well.

Trade Facilitation Measures:

To promote trade and facilitate smoother economic cooperation, Bangladesh and Nepal have taken various measures. Both countries are members of the South Asian Association for Regional Cooperation (SAARC) and have been actively engaged in regional forums, including the SAARC Chamber of Commerce and Industry, to enhance trade relations. They have signed several bilateral agreements, such as the Trade and Investment Promotion Agreement (TIPA), to boost trade, investment, and economic cooperation. The two sides are currently engaged in negotiating a treaty for preferential access to each other’s products. In the wake of growing interest of entrepreneurs of both Bangladesh and Nepal to invest in each other’s countries, the two governments are also engaged in concluding a Bilateral Investment Promotion and Protection Agreement (BIPPA).


Despite the growing trade relationship, there are certain challenges that need to be addressed. One of the primary challenges is the lack of direct connectivity between Bangladesh and Nepal. Currently, most trade takes place through India, which adds to transportation costs and time. Enhancing connectivity and establishing direct transportation links, such as road, rail, and air routes, would significantly reduce trade barriers and boost bilateral trade.

Another challenge is the trade imbalance, with Bangladesh exporting significantly more to Nepal than it imports. Efforts are being made to address this issue by encouraging Nepalese exporters to explore opportunities in the Bangladeshi market and diversify their export base. Additionally, both countries are working on identifying potential new products for trade, such as agricultural produce, pharmaceuticals, and information technology services, to achieve a more balanced trade relationship.

Future Prospects:

The Bangladesh-Nepal trade relationship holds immense potential for growth and diversification. The two countries have expressed a commitment to further strengthen economic ties and explore untapped trade opportunities. Efforts are being made to enhance trade facilitation measures, including simplifying customs procedures, reducing non-tariff barriers, and promoting business-to-business interactions. Moreover, initiatives such as joint trade fairs, business delegations, and trade promotion events are being organized to create awareness and foster closer economic cooperation.

Furthermore, regional initiatives like the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicle Agreement and the establishment of economic corridors within the framework of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) provide avenues for greater regional integration and trade. These initiatives, combined with infrastructural developments and improved connectivity, are expected to unleash the full trade potential between Bangladesh and Nepal.