Govt eyes FDI uptick thru reforms

Bangladesh is stepping up its efforts to attract foreign direct investment (FDI) through sweeping reforms, a more stable macroeconomic environment, and targeted incentives.

These priorities were laid out in the third session of the State of Investment Climate webinar, hosted by the Bangladesh Investment Development Authority (Bida) yesterday, with strong participation from investors, policymakers, and development partners.

Chowdhury Ashik Mahmud Bin Harun, executive chairman of Bida and the Bangladesh Economic Zones Authority (Beza), delivered a comprehensive address, stressing that FDI must become a cornerstone of the country's economic strategy.

"Our FDI-to-GDP ratio has historically been underwhelming. We are not proud of it, and that's why we are changing the narrative," he added.

Chowdhury highlighted that while global uncertainty and political transition posed challenges in late 2024, FDI inflows have stabilised, and early indicators from the first quarter of 2025 are promising.

"Our FDI-to-GDP ratio has historically been underwhelming. We are not proud of it, and that's why we are changing the narrative," says Chowdhury Ashik Mahmud Bin Harun, executive chairman of Bida

"There was a blip in the third quarter last year due to unrest, but we've bounced back, and we're expecting stronger figures going forward," he said.

A major driver of this optimism is easing inflation, which has dropped from double digits to single digits in recent months.

Citing forecasts from the International Monetary Fund, Chowdhury said they now expect inflation to hover around 5 percent by early next year.

"This allows us to gradually reduce policy interest rates, making credit more affordable and investment more viable," he added.

To build on this momentum, the government is preparing a diaspora-focused FDI incentive scheme, rewarding non-resident Bangladeshis who facilitate foreign investments, similar to existing remittance incentives.

Chowdhury also revealed that a national free trade zone strategy is being formulated in consultation with international experts.

"A dedicated national committee is evaluating global best practices, and we aim to see meaningful progress by the end of 2025," he said.

One of the most critical institutional reforms underway is the unification of multiple investment promotion agencies.

"Depending on whom you ask, Bangladesh has five to seven different agencies handling investment. This confuses investors," Chowdhury added. "We are now working to bring them under a single platform to provide a seamless investor experience."

In addition, he pointed out that the government is launching a "relationship manager" model within Bida.

These professionals – recruited from the private sector – will serve as guides for investors, helping them navigate regulatory and bureaucratic processes.

"We are learning, adapting, and accelerating. The direction is clear – Bangladesh is open for business, and we're building the foundation to welcome the world," Chowdhury said.

Speaking virtually at the event, Commerce Adviser Sk Bashir Uddin shared his journey from the private sector to the public sector and addressed key challenges and opportunities in Bangladesh's trade and investment landscape.

Reflecting on his unexpected entry into public service, Bashir said he never imagined working in the government, but it has been an exciting and purposeful journey.

On trade issues, Bashir discussed efforts to retain Bangladesh's Most Favoured Nation status amid concerns over potential US tariffs.

"We have created product roadmaps and are working to close trade deficits," he said.

In logistics, the government is enhancing transshipment capacity, including developing the Sylhet and Cox's Bazar airports for cargo use.

"We're aiming to be more efficient and cost-competitive," he added.

He also confirmed the liberalisation of civil aviation regulations and support for domestic tourism. On e-commerce, he noted that the central bank is working to enable international payment gateways while ensuring consumer protection.

Regarding infrastructure, Bashir stressed investment in roads, transport, and energy.

"New LNG terminals and captive power will help overcome supply challenges," he said.

On export diversification, he said that with 40 million in the workforce, Bangladesh must go beyond garments.

He also emphasised leasing unused jute mills and modernising trade bodies to empower small and medium enterprises.

Calling on global investors, he concluded by saying that Bangladesh is open for business.

"Our people are resilient, our market is growing, and the time to invest is now," he said.