Bangladesh is hoping for a free trade agreement (FTA) with Japan.

Riding on preferential trade benefits as a least developed country, Bangladesh's exports to Japan, especially of apparel items, have been rising fast because of high demand. Last fiscal year Bangladesh’s exports of apparel to Japan rose by 14 per cent. Japan is Bangladesh’s most promising export market in Asia. Shipment of garment items to Japan from Bangladesh started leapfrogging since April 2011, when Japan relaxed its rules of origin for LDCs and for the knitwear sector.

Earlier, Japan did not allow zero-duty on shipment of knitwear in an effort to protect its indigenous knitwear sector. By 2030 Bangladesh’s apparel shipments to Japan are expected to rise tenfold. However, Bangladesh would have to improve its investment and business climate to sign an FTA and attract more Japanese investment.

The number of Japanese companies in Bangladesh has tripled over the last decade, reaching 338 in 2022.Most are desperate to expand their businesses and want an FTA to be signed. A lot of Japanese companies have been relocating their businesses to other countries from Japan and China. Japan is implementing some mega projects in Bangladesh, including a deep sea port, a metro rail and an airport terminal, which are expected to be completed within the next few years.