Bangladesh - Australia Trade and Investment Relations

The total volume of Bangladesh-Australia trade has increased significantly in Bangladesh’s export to Australia in 2017 was USD 652.04 million against import of goods worth USD 917.19 million from Australia during the same period. Bangladesh’s export to Australia mainly consists of readymade garments, woven fabrics, knitwear, textile manufactures, home textile, leather goods and footwear, processed food, fish, jute goods etc. Major Australia’s export consists of wheat, vegetables, lentil and pulses, milk cream and other dairy products, cotton, fertilizers, oil seeds, primary plastic products, machinery and transport equipment, scraps and some other industrial raw materials.

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

Table: 1

Australia's imports from Bangladesh

Unit : US Dollar thousand

Sources: ITC calculations based on Australia Bureau of Statistics, statistics since January, 2017.
               ITC calculations based on UN COMTRADE statistics until January, 2017.

Table: 2

Australia's exports to Bangladesh

Unit : US Dollar thousand

Sources: ITC calculations based on Australia Bureau of Statistics, statistics since January, 2017.
               ITC calculations based on UN COMTRADE statistics until January, 2017.

Table: 3         

Bilateral Trade and Investment (Data Up to 2016-17)[1]

(Value: in Million US dollar)

[1] Export Promotion Bureau; multiple years

Bangladesh received duty and quota free access to the Australian market since 01 July 2003 subject to the fulfilment of Rules of Origin (RoO) criteria. But the potential of bilateral trade opportunities between the two countries has yet to be realised. Bangladesh offers commercial opportunities to Australian companies operating in the commodities, coal, energy, telecommunications, and transport sectors.

Exploration and production of natural gas has attracted a number of international oil companies, with 12 of the country's 23 exploration and production blocs currently operated jointly by international concerns. Santos Oil Company has investment in this sector in Bangladesh.

Opportunities exist in the telecommunications industry for Australian companies to enter the market to supply mobile service equipment, consultancy and technical services. Bangladesh's railways, roads and port infrastructure are in need of improvement and Australian businesses explore this opportunity to provide services and equipment in infrastructure sector in Bangladesh.

Development Cooperation and Assistance:

Bangladesh has been a recipient of Australian development assistance since the early 1970s. The Australian development assistance to Bangladesh is focused on helping the country lower its poverty level and support the next generation of Bangladeshi to participate in the economy. Australian Official Development Assistance (ODA) to Bangladesh in 2016-17 was $57.7 million and bilateral aid was approximately $42.4 million. The Australian Government is providing an estimated $57.9 million in total ODA to Bangladesh in 2017-18. Australia has decided to exit from the health sector as well as from climate change and emergency response. 

Presently, Australian developmentis assistance focused on two objectives: a. Improving education access, equity, efficiency and learning outcomes; and b. building resilience by reducing vulnerability and improving inclusion in the growing economy.

The Australia Awards which was suspended in 2015, resumed in 2016-17. Australia is now providing a number of post-graduate scholarships and different short courses. on regional energy security, international trade and countering terrorism financing. Australia through the Government Partnership for Development supported Bangladesh’s energy and power sectors to improve sector management through programs at the Royal Melbourne Institute of Technology and Monash University. Under this program 75 mid and senior officials and policy makers from the Ministry of Power and Energy participated in workshops and undertook site visits to power and energy sector infrastructure in Australia.

Trade and Investment Opportunities in Bangladesh:

Bangladesh offers an unparalleled investment climate compared to other South Asian economies. Key pointers to Bangladesh's investment climate today are highlighted below:

1. Bangladesh is a largely homogeneous society with no major internal or external tensions and a population with great resilience in the face of adversity (e.g. natural calamities).
2. Bangladesh has liberal democracy. The population of this country irrespective of race or religion have been living in harmony and understanding for thousands of years.
3. Broad non-partisan political support for market oriented reform and the most investor-friendly regulatory regime in South Asia.
4. Trainable, enthusiastic, hardworking and low-cost (even by regional standards) labor force suitable for any labour-intensive industry.
5. The geographic location of the country is ideal for global trade, with very convenient access to international sea and air routes.
6. Bangladesh is endowed with abundant supply of natural gas, water and its soil is very fertile.
7. Although Bangla is the official language, English is generally used as a second language.

Bangladeshi products enjoy duty free and quota free access to almost all the developed countries. This access to the global market is further influenced by the fact that the policy regime of Bangladesh for foreign direct investment is by far the best in South Asia. Most Bangladeshi products enjoy complete duty and quota free access to EU, Canada, Australia and Norway. Though in limited scale, Bangladesh products already found their access with lower duty in the markets of Thailand, India and Pakistan. However, talks are underway with China, Russia, Malaysia and other neighbouring countries in this regard.

Export Processing Zones (EPZs) are export oriented industrial enclaves which provide the infrastructures, the facilities, administrative and support services for a wide variety of enterprises. Bangladesh’s highly successful EPZs in Dhaka and Chittagong are now complemented by new EPZ developments and other valuable real estate developments around the country. The Bangladesh Export Processing Zones Authority (BEPZA) is the official organ of the government to promote, attract and facilitate foreign investment in the Export Processing Zones. The primary objective of an EPZ is to provide special areas where potential investors would find a congenial investment climate, and location free from cumbersome procedures. Businesses from 32 countries have so far invested in the existing zones. Industrial set ups in EPZs are receiving  incentives like tax holidays, duty free import of construction materials, machineries, office equipment & spare parts , raw materials and finished goods, Relief from double taxation, 100% foreign ownership permissible, full repatriation of capital and dividend and many more.

Potential investment sectors in Bangladesh as emphasized by the government are agribusiness, ceramics, electronics, foreign foods, garment and textiles, ICT and business services, leather and leathers goods, light engineering, power industry, life science. Details on trade and investment opportunities are available at www.boi.gov.bd and www.epzbangladesh.org.bd