Middle East war putting pressure on exports, may hit remittances: Commerce minister

Instability in the Middle East has begun to exert pressure on Bangladesh’s exports, Commerce Minister Khandakar Abdul Muktadir said today, warning that a prolonged crisis could also strain remittance inflows.

The turmoil has already contributed to rising fuel prices, increased import costs, and higher shipping and insurance expenses. The situation is also dampening exports to Middle Eastern markets, fuelling inflationary pressures and posing potential challenges for remittance inflows, the minister said while responding to ruling party MP Shamsur Rahman Shimul during a parliamentary question-and-answer session chaired by Deputy Speaker Kayser Kamal.

He noted that the US-Israel war on Iran could have wider repercussions for the global economy and trade, with Bangladesh unlikely to remain insulated.

The minister said Middle East remains one of Bangladesh’s most significant trading partners, importing garments, pharmaceuticals, frozen foods and leather goods into markets such as the UAE, Saudi Arabia, Qatar and Oman.

He stressed that while exports are already facing some pressure, a prolonged crisis could weigh more heavily on remittances in the months ahead.

The minister said the government is closely monitoring developments under the PM’s directives. He outlined several mitigation measures, including efforts to reduce logistics costs and expand export markets beyond the conflict zone.

Bangladesh in trade deficit with 4 SAARC countries

Bangladesh maintains a trade deficit with four South Asian Association for Regional Cooperation (SAARC) members countries -- India, Afghanistan, Bhutan and Pakistan -- while enjoying surpluses with Nepal, Sri Lanka and the Maldives, the commerce minister said while responding to a query from SM Jahangir Hossain MP.

He said trade with SAARC nations presents a mixed picture, reflecting both deficits and surpluses.

According to data from Bangladesh Bank for the fiscal year 2024-25, Bangladesh’s trade with Afghanistan recorded exports of $11.09 million against imports of $21.80 million, leaving a deficit of $10.71 million. Exports to Bhutan stood at $14.33 million, compared to imports of $44.10 million, resulting in a deficit of $29.77 million.

Trade with India showed the largest imbalance, with exports totalling $1.76 billion against imports of $9.62 billion, producing a deficit of $7.86 billion. Bangladesh also posted a trade deficit with Pakistan, with exports of $74 million against imports of $755.30 million, leaving a shortfall of $681.30 million.

By contrast, Bangladesh recorded surpluses with several SAARC partners. Exports to Nepal reached $35.40 million, while imports stood at $5.50 million, yielding a surplus of $29.90 million. Trade with Sri Lanka was also in Bangladesh’s favour, with exports of $82.85 million against imports of $76.60 million, producing a surplus of $6.25 million. Similarly, exports to the Maldives amounted to $6.35 million, compared to imports of $3.50 million, leaving a surplus of $2.85 million.

In response to a separate question from Abul Kalam MP, the commerce minister presented export earnings data for the past five fiscal years. Export income stood at $45.37 billion in FY 2020-21, rising to $60.97 billion in FY 2021-22, before declining to $53.93 billion in FY 2022-23 and $51.11 billion in FY 2023-24. It rebounded to $55.19 billion in FY 2024-25.