A joint working group of Bangladesh and Japan will be formed to identify sectors of mutual interest under a memorandum of cooperation (MoC) to be signed during Prime Minister (PM) Sheikh Hasina's upcoming visit to Japan.
The MoC on Bangladesh-Japan Industrial Upgradation Partnership will be signed by the Ministry of Commerce and the Japanese Ministry of Economy, Trade and Investment during the Bangladesh premier's visit to Japan on November 29-30.
"The MoC will create a platform to start work officially on the path towards increasing trade and investment," said Senior Secretary of the commerce ministry Tapan Kanti Ghosh.
Mr Ghosh said the working group will be working after the signing of MoC, in order to find potential sectors of mutual interest.
Official sources said the MoC primarily focuses on finding potential in some areas, including ICT, readymade garments and capacity building - but the priorities might change when the joint working group will sit to work on finding a win-win situation for both the nations.
Meanwhile, leaders of the Japan Bangladesh Chamber of Commerce and Industry (JBCCI) said the MoC is likely to be the first step towards signing a free trade agreement (FTA), which, according to a survey, private companies of both countries are interested in.
The survey, conducted by JBCCI, finds the majority of Bangladeshi and Japanese companies operating in the country favour the FTA, in a bid to retain competitiveness after Bangladesh's graduation from least developed country (LDC) status in 2026.
The premier's visit is important as it will create scope for signing FTA in future, said a JBCCI leader.
Both Bangladesh and Japan are interested in enjoying free trade and tax benefits. Japanese Ambassador Ito Naoki also discussed the importance of FTA between the two countries on various occasions.
Bangladesh Trade and Tariff Commission (BTTC) studied the pros and cons of signing an FTA with Japan. The Japanese government, however, emphasised on receiving the demand for FTA from the Japanese business community first.
Following that, JBCCI, in support of the Japan External Trade Organisation (JETRO), conducted a survey last year of over 300 Bangladeshi and Japanese companies.
The survey finds that 85 per cent of the companies are in favour of signing an FTA between the two countries.
Trade and investment opportunities between the two friendly counties have increased since the visits by prime ministers of Bangladesh and Japan in 2014.
The number of Japanese companies working in Bangladesh has also increased significantly over the last decade, while the Japanese assistance to the country's development activities has also increased.
Japanese investment is also likely to increase with the setting up of a special economic zone.
During the fiscal year 2020-2021, Japanese assistance to Bangladesh was US$2.63 billion, while the latter's export to Japan was worth $1.35 billion during the last fiscal year.