Japan and Bangladesh is time-tested friends since independence of Bangladesh. The relationship, which has been centered on aid and economic cooperation, is diversifying into economic and business relations. As of 2024, 315 Japanese companies are operating in Bangladesh, a 4.5-fold increase over the past 15 years. There are high hopes for the bilateral Economic Partnership Agreement (EPA) as a driver to further deepen economic relations. Bangladesh is scheduled to graduate from the Least Developed Country (LDC) status in 2026, after which it will lose duty-free market access to Japan. 
In addition, tariffs on steel products, machinery, automobiles, and other products that are imported in large quantities from Japan can be reduced by EPA, allowing people and industries to obtain products at more affordable prices, contributing to improving the welfare of the people. If the market size expands in Bangladesh, Japanese companies will invest and provide more technical assistance in more rapid manner. According to a survey conducted by the Japanese Chamber of Commerce and Industry in Dhaka (JCIAD) in 2023 (N=75), 84% expect bilateral EPA, and 33% of respondent companies said that if EPA is not concluded after Bangla- desh graduates from LDC status, they might withdraw from Bangla- desh or scale down their business. In addition, 85% want the EPA negoti- ations to be completed at least by the end of 2025 (42% answered until the end of 2024, and 43% answered until the end of 2025).
The two governments are currently negoti- ating the EPA, and four rounds of negotia- tions have been completed to date. The Japanese business community highly appreciates the active efforts and negotia- tions being made by the interim govern- ment. Elections are expected to be held at the end of 2025. We strongly expect the interim government to take swift action on the EPA negotiations, just like the elections.
(Chart-1) Expectation to Japan-Bangladesh EPA (N=75)
(Source) Japanese Commerce and Industry Association in Dhaka (JCIAD)
(Chart-2) Business strategy in case EPA is not concluded after LCD graduation (N=75)
(Source) Japanese Commerce and Industry Association in Dhaka (JCIAD)
(Chart-3) Expected timing for the conclusion of EPA negotiations (N=75)
(Source) Japanese Commerce and Industry Association in Dhaka (JCIAD)
When the EPA comes into effect, we can expect not only tariff reductions, but also a significant improvement in the investment environment. It will also a great help for the initiative to improve the investment environment currently being led by BIDA. We have high hopes and expectations for BIDA's efforts, which is why we JETRO are saying bitter words as a trusted partner.
"A friend in need is a friend indeed." I have always thought that this phrase is for both Bangladesh and Japan. The public and private sectors of Japan are always with Bangladesh as it grows.
