
Bangladesh has emerged as one of South Asia’s most promising destinations for Foreign Direct Investment (FDI) in Bangladesh. With a rapidly growing economy, strategic location, and a young, skilled workforce, the country is attracting investors from around the globe. In 2025–2026, FDI inflows are expected to rise significantly, driven by government incentives, infrastructure development, and key sector growth in areas such as renewable energy, pharmaceuticals, information technology, and textiles. This upward trend highlights Bangladesh’s potential as a hub for international investment.
FDI Trends in Early 2025
In the first quarter of 2025, Bangladesh witnessed a significant surge in Foreign Direct Investment (FDI) in Bangladesh. Net FDI inflows reached $864.63 million, marking a 114.31% increase compared to the same period in 2024. This rebound is attributed to:
Increased equity investments: Rising by 62% year-on-year.
Surge in intra-company loans: Up by 147% to $627 million.
Decline in reinvested earnings: Dropped by 24% to $194.71 million.
Despite the overall growth, the inflow remains below expectations, especially considering political changes aimed at removing long-standing investment barriers (The Daily Star).

Strategic Partnerships and Agreements
Bangladesh is set to sign its first-ever Economic Partnership Agreement (EPA) with Japan. This historic agreement is expected to:
Enhance trade relations.
Facilitate technology transfer.
Promote industrial transformation.
The EPA is a significant step as Bangladesh prepares to graduate from Least Developed Country (LDC) status in 2026 (The Financial Express).
Infrastructure Developments
The World Bank has committed $850 million to Bangladesh, with $650 million allocated for the Bay Terminal Marine Infrastructure Development Project in Chittagong. This project aims to:
Expand and modernize port facilities.
Accommodate larger vessels.
Improve trade efficiency and job creation.
The remaining funds will support social protection initiatives, benefiting over 4.5 million vulnerable individuals (Reuters).

⚠️ Challenges and Risks
Despite positive trends, several challenges persist for Foreign Direct Investment (FDI) in Bangladesh:
Political instability: Ongoing tensions may affect investor confidence.
Regulatory complexities: Navigating the legal landscape can be challenging for foreign investors.
Infrastructure bottlenecks: While improvements are underway, some areas still face limitations.
Recommendations for Investors
To capitalize on the opportunities in Bangladesh, investors should:
Focus on priority sectors: Renewable energy, pharmaceuticals, and information technology.
Engage with local partners: To navigate regulatory landscapes effectively.
Monitor political developments: To assess potential risks.
Conclusion
The outlook for Foreign Direct Investment (FDI) in Bangladesh for 2025–2026 appears promising, with significant growth in early 2025 and strategic partnerships on the horizon. However, addressing existing challenges will be crucial to sustaining this momentum. For more detailed insights, visit our previous blog post on Foreign Investment in Bangladesh.
Frequently Asked Questions (FAQs)
As of the first quarter of 2025, Bangladesh received $864.63 million in net FDI inflows, a 114.31% increase from the previous year.
Key sectors include renewable energy, pharmaceuticals, information technology, and infrastructure development.
The government offers various incentives, including tax holidays, investment protection agreements, and Special Economic Zones (SEZs). pulvinar dapibus leo.
Potential risks include political instability, regulatory complexities, and infrastructure challenges.
Investors can conduct due diligence, engage with local partners, and stay informed about political developments.
