Political transition boosts Japanese investment confidence in Bangladesh: Jetro

Japanese investors are showing renewed confidence in Bangladesh's economy following the peaceful political transition and installation of the new government, with several major Japanese corporations expanding operations and exploring fresh investment opportunities in the country.

"The formation of the new government on 17 February created a stable political environment that encouraged Japanese companies to move from a wait-and-see approach to long-term investment planning," said Japan External Trade Organization (Jetro) Country Representative Kazuiki Kataoka while talking to BSS.

Kataoka said that a number of major Japanese business groups have recently expanded their presence in Bangladesh, reflecting growing confidence in the market and its long-term economic prospects.

Among the notable developments, he mentioned that Japanese trading giant Mitsui & Co Limited invested in ACI Logistics in February, strengthening its engagement with the Bangladeshi retail and consumer sector.

The company already maintains business ties through ACI Motors, he added.

In another significant move, the country representative noted that Mitsubishi acquired a 25% stake in Rancon Group's automobile business in April to support expansion in Bangladesh's growing automotive sector.

He also said that Japanese consumer goods manufacturer Lion Corporation has established a new factory at the Bangladesh Special Economic Zone (BSEZ), producing products including detergents and toothbrushes for the local market.

He added that several other Japanese firms have opened offices in Dhaka in recent months to assess business prospects and prepare for future investments.

The representative noted that major bilateral infrastructure projects are also progressing positively.

Highlighting Bangladesh's domestic market potential, the Jetro official said the country's growing middle-income population is creating rising demand for quality international products.

While Bangladesh's average GDP per capita stands at around $2,700, Dhaka's per capita income has already exceeded $5,000, creating a promising consumer base for Japanese goods and services, he observed.

He said that a recent visit by Japan's agriculture minister also reflected growing Japanese interest in Bangladesh's retail and consumer sectors.

Despite the positive momentum, the representative identified several challenges facing foreign investors, including visa processing, work permits, profit repatriation, taxation and customs clearance procedures.

He urged Bangladesh to gradually shift from labour-intensive industries to more capital-intensive manufacturing sectors to achieve higher productivity and long-term economic value.

Referring to emerging sectors, he said Japanese startups are also exploring opportunities in electric mobility.

He mentioned that Japanese startup Grafit has already begun feasibility studies on electric bikes in Bangladesh with support from Japan's Ministry of Economy, Trade and Industry (METI).

The Jetro representative said no Japanese company had withdrawn from Bangladesh even during the interim political period, demonstrating sustained confidence in the country's economic potential.

He added that the current political stability and longer-term policy outlook are helping Japanese firms make more substantial investment decisions for the future.