Bangladesh - Australia Trade and Investment Relations

Bangladesh-Australia bilateral trade has grown six times over the past decade, reaching US$2 billion from less than USD 300 million in a decade. Australia extended the Duty-Free Quota Free (DFQF) facility to LDCs in 2003, which has significantly contributed to the increase of Bangladesh’s export to Australia. Bangladesh is now 32^nd largest trade partner of Australia.

Bangladesh’s export to Australia is concentrated on readymade garments (knitwear and woven wear) and textile products (about 93%).  Other export items are leather goods and footwear, processed food, fish, jute goods etc. Even after growing manifold in the past decade, Bangladesh’s export to Australia in 2019-20 was US$ 762.9 million, constituted 0.3% of Australia’s total import putting Bangladesh at 33 in the rank.

Bangladesh’s import from Australia consists of agricultural products (cotton, wheat, edible vegetables, oilseeds, lentil, pulses), minerals and metals (copper, zinc, lead), milk cream and other dairy products, scraps and other industrial raw materials. Bangladesh’s import from Australia in 2019-20 was US$ 695.7 million, accounted for 0.2% of Australia’s total export, putting it at 29 in the rank. Despite potentials, import of cotton and cereals reduced in the recent year.

The Australia-Bangladesh Trade statistics are shown in the following Tables:

Table: 1

Bilateral Trade, goods (services) between Australia and Bangladesh

Unit: AU Dollar Million

Data Source: Statistics Section, Trade and Investment Economic Branch, DFAT, Australia

Table: 2

Bangladesh’s exports to Australia

                                                                                                                       Unit: US Dollar Million

Data source: ITC calculations based on Australia Bureau of Statistics

Table: 3

Bangladesh’s imports from Australia

Unit: US Dollar Million

Data source: ITC calculations based on Australia Bureau of Statistics

Australian investment has just started to flow to Bangladesh and stood at A$ 444 million in 2019. Australian investments (FDI/ JV) and portfolio investments may be feasible in steel manufactures, biotechnological items, medical equipment, IT and IT-enabled services, and the agri-business sector in addition to the mineral & energy sector in Bangladesh. Bond and security market have potentials to attract Australian investment.

Exploration and production of natural gas in Bangladesh have attracted many international oil companies. Currently 12 of the country's 23 exploration and production blocs are operated jointly by global concerns. Santos, an Australian Oil and Gas Company, had investment in this sector in Bangladesh.

Off late Bangladesh and Australia has signed a Trade and Investment Framework Arrangement (TIFA). Despite not being an elaborate and legally binding agreement, TIFA is expected to help add new tradeable items from both sides and facilitate bilateral trade and investment. A Joint Working Group (JWG) will be formed under TIFA to consider all aspects of increased trade and investment in both Bangladesh & Australia.