Bida summit aims to shore up investor confidence as FDI falls 20% in Jul-Feb

Highlights:

• Bangladesh launches major summit to revive declining foreign direct investment (FDI)
• Taka devaluation and political instability caused sharp drop in FDI inflow
• Six economic zones prioritized for development with improved infrastructure
• FDI-focused online portal launched for easier access to investment information
• Regulations eased to streamline foreign share issuance and startup investments abroad

Recognising the urgent need to reverse the decline in foreign direct investment (FDI) in recent years, the interim government has launched several initiatives, including a major investment summit starting on 7 April, fast-tracking six economic zones, holding investment events abroad, launching an online portal for investor information, and easing regulations to attract investors.

Bangladesh Bank data paints a bleak picture, with net FDI declining since FY23 — partly due to the sharp taka devaluation triggered by the Russia-Ukraine war in mid-2022. The taka devalued by over 35% in the last 2.5 years, from Tk90 per dollar in June 2022 to Tk122 in January 2025.

Investor confidence eroded further amid chronic exchange rate volatility and political uncertainty following Sheikh Hasina's ouster on 5 August last year, resulting in an 11% drop in FDI in FY24.

Net FDIs totaled $1.47 billion in FY24, down from $1.64 billion in FY23. In the July-February period of FY25, FDI was $824 million, compared to $1 billion in the same period of FY24, central bank data shows.

A milestone investment summit to boost FDI

In this context, the Bangladesh Investment Development Authority (Bida) and the Bangladesh Economic Zones Authority (Beza) will jointly host the four-day Bangladesh Investment Summit 2025 on 7-10 April, highlighting investment opportunities in five major sectors – Renewable Energy, Digital Economy, Textile & Apparel, Healthcare & Pharma, and Agro-processing.

According to the organisers, job-creating foreign investments will be prioritised in the upcoming summit, which has already attracted over 2,300 registered participants from 50 countries, including more than 550 foreign investors.

The top participating countries include China, the US, the UK, India, Singapore, and Japan, with the highest number of business delegations coming from China.

Despite US President Donald Trump's recent tariffs, organisers are hopeful that with the right strategy, Bangladesh can attract investors in key sectors. "Investors will closely watch the government's response and negotiations on this issue at the policy level, and it will be discussed at the summit," Chowdhury Ashik Mahmud Bin Harun, executive chairman of Bida and Beza, told TBS.

There is some good news on the exchange rate front: the exchange rate has remained stable at Tk122-123 for the past three months, the longest period of stability in two years.

Organisers said they want to make the event a milestone, showcasing Bangladesh's investment potential and recent economic reforms, aiming to create sustainable investment opportunities. 

During the summit, foreign investors will be given tours of several economic zones, including the Araihazar and Mirershorai economic zones, on 7-8 April.

In February this year, the Bida participated in a seminar in Tokyo, Japan, to promote investment opportunities in Bangladesh. Organised jointly with Jica and Jetro, the event saw over 100 Japanese entrepreneurs, and Chowdhury Ashik Mahmud presented Bangladesh's investment prospects. 

EZs not ready yet

However, the economic zones are not well prepared with the necessary infrastructure to support investors. That is why the interim government, led by Muhammad Yunus, is focusing on properly developing a few zones instead of the 100 planned by the previous government.

M A Jabbar, president of the Bangladesh Economic Zones Investors' Association (Bezia), told TBS that while there are many investment opportunities in economic zones, the lack of infrastructure has frustrated investors. "We have seen little progress in gas and electricity facilities, roads, and drainage systems," said Jabbar, also managing director of DBL Group.

In 2021, DBL Group announced a $650 million (Tk5,500 crore) investment to establish 10 factories at the Sreehatta Economic Zone in Moulvibazar. Jabbar shared that they are still struggling to access the necessary infrastructure to begin operations.

He expressed frustration, noting that investors in existing zones are not receiving adequate infrastructure support. Some even lack access to engineers for drainage system construction.

Jabbar emphasised that if local investors face such challenges in setting up substations, attracting foreign investors will be a long-term struggle. Investors who have already entered economic zones are counting days due to delays as land is leased.

He added that although the Sreehatta Economic Zone is on the list of six priority zones, it is still not fully equipped with the necessary infrastructure.

Development of six EZ's prioritised

The interim government has taken several initiatives to boost FDI, including prioritising the development of economic zones and easing regulations for foreign investors.

A new roadmap was announced to develop 10 economic zones, replacing the former Awami League government's plan for 100. The 10 zones are National Special Economic Zone, Srihatta, Japanese, Maheshkhali, Jamalpur, Anwara, Sabrang Tourism Park, Chandpur, Kushtia, and Bhutanese Economic Zone in Kurigram.

In the first phase, six zones will be fully equipped with utilities (gas, electricity, water) and road infrastructure before the remaining four are developed. The six zones are National Special, Srihatta, Japanese, Maheshkhali, Jamalpur, and Anwara. The Anwara Economic Zone is being developed with Chinese funding, and investors are expected to contribute further.

Srihatta, Jamalpur, Japanese, and National Special Economic zones already have partial infrastructure. The government aims to complete these zones in the first phase before moving on to the second phase, which will focus on the other four zones.

Launch of foreign investment and financing portal

In February, Bangladesh Bank launched a new portal designed to provide foreign investors with easy access to essential information. The portal highlights investment opportunities, tax policies, and other relevant regulations for international investors.

A message from the Bangladesh Bank governor greets visitors: "Move your investment wheels towards Bangladesh, the emerging economy in Asia, where an investment-friendly climate awaits you. The Bangladesh Bank is fully committed to offering support."

Through the portal, foreign investors can explore a variety of investment options in Bangladesh, including Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), Alternative Investment Fund (AIF), Mutual Funds (OMF), and Bangladesh Government Treasury Bonds (BGTB).

Additionally, the portal features a help desk that connects all financial institutions with dedicated representatives to assist investors.

 Regulations eased for foreign investors

The Bangladesh Bank has recently relaxed the reporting requirement for issuing shares to foreign investors in exchange for foreign exchange brought into the country through banking channels.

Previously, banks were required to report to the Bangladesh Bank within 14 days of issuing shares to non-residents, a process that involved time-consuming documentation. To streamline this, the Bangladesh Bank now allows relevant banks to verify documents for share issuance up to Tk10 lakh.

Additionally, the Bangladesh Bank has permitted start-up businesses to invest up to $10,000 to establish legal entities abroad, aiming to bring financial benefits to the country.

In a recent circular, the Bangladesh Bank also addressed requests from resident companies seeking to acquire shares abroad by exchanging their own shares or securities for foreign company shares rather than using cash. This move is seen as a strategic approach to generate financial benefits for resident companies.