Bilateral Trade and Investment


Trade:

Bilateral trade relations between Bangladesh and Nepal are guided by the General Trade Agreement (called “Trade & Payment Agreement”) concluded on 2 April 1976. Under this agreement, both the countries accord “Most Favored Nation” treatment to each other. However, the volume of trade is much lesser than the expected level. It is now gradually picking up with the opening of the Kakarbhitta-Fulbari-Banglabandha route, which allows Nepal access to Bangladesh through India.

The present trade volume is around USD 50 million with USD 40 million export from Bangladesh against Nepal’s export of USD 10 million.  Since the economies of the two countries have complementarities, there is a tremendous scope for increasing the trade volume if potentials could be harnessed by both the countries.

Major export items from Bangladesh to Nepal include garments, jute products, oil cakes, potatoes, food products, electrical and electronic items, furniture, batteries and pharmaceuticals. Pran-RFL and RahimAfrooz Batteries have already gained a firm foothold in Nepal. Apex Leather has opened their brand shop Venturini with an array of leather products. Several Bangladeshi brands, such as HATIL Furniture, Runner Motorcycles and Walton Electronics are also trying to expand their market in Nepal.

Major items exported from Nepal to Bangladesh are red lentils, ginger, soybean oil, other agricultural products, processed food, vegetables, fruits and spices. Nepal is also looking for opportunities to export yarn, pashmina woolen products, ginger, large cardamom, herbal products, shoes, gems and jewelry, coffee, tea and handicrafts products.

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).

The private sectors of the two countries are gradually engaging with each other by regularly exchanging trade delegations and organizing and participating in fairs. The two premier chambers of the countries – FNCCI and FBCCI – have institutional mechanisms for cooperation.

In the last five years, Bangladesh Embassy in Kathmandu supported entrepreneurs to participate in various trade fairs, such as the Nepal International Trade Fair, Nepal Handicrafts Fair, Nepal Women Entrepreneurs Fair, etc.

The Commerce Ministries of both countries regularly meet to review the progress of trade relations. 

Investment

Bangladeshi and Nepali investors have 74 joint venture projects in various sectors. (List attached). Notable investments include IFIC Bank’s share in the Nepal Bangladesh Bank Ltd in Nepal and CG Group’s investment in a food processing plant in Bangladesh.