Japanese investors are showing keen interest in Bangladesh. The main reasons are low wages and low production costs. They also are pulling back their investments from China due to the high wages and production costs. Wages in the garment sector in China are four times higher than they are in Bangladesh. About 270 Japanese companies are operating in Bangladesh.

Since the garment sector is growing fast in Bangladesh, foreign investors choose the country as an investment destination in the textile sector. The available workforce at a reasonable wage, duty-free market access to major export destination, preferential location in the heart of the Asia-Pacific region and policy support have acted as a catalyst to attract foreign investment in the textile and apparel industry.

Bangladesh is seeking FDI from Singapore, India, Japan, China, Thailand and other countries. There has been a huge jump in FDI inflows. This can be attributed to the development of 100 economic zones in Bangladesh. Out of the export earnings from Japan in the last fiscal year, 74.8 per cent came from the readymade garment sector. And apparel exports to Japan have seen a 13.73 per cent rise. Meanwhile, Japan has shown a keen interest in hiring skilled labor from Bangladesh for its textile industry.