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Over 50 per cent of Japanese companies expect profit growth and expansion in Bangladesh this year after the elections, according to a survey released on Monday.
Business leaders from Bangladesh and Japan, however, stressed the need to remove barriers in line with the Economic Partnership Agreement (EPA) framework to unlock the full potential of bilateral trade and investment.
They highlighted several challenges, including policy inconsistency, lack of coordination among government agencies, lengthy procedures, ineffective one-stop services, visa complications, and inadequate protection of intellectual property rights, adding that the EPA would open the door to expanded trade and investment.
Speaking at the "Japan Business Day" event in Dhaka, Kazuiki Kataoka, country representative of Japan External Trade Organization (JETRO), described Bangladesh as a "high-stakes frontier for growth" for Japanese companies.
Citing data, he said a growing number of firms are considering shifting operations from ASEAN countries to South Asia.
Bangladesh's current political and social stability following the election has increased expansion prospects for Japanese firms, particularly amid growing opportunities in non-manufacturing sectors, he added.
The event was jointly organised by the Embassy of Japan in Bangladesh, JETRO, the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI), and the Japan Commerce and Industry Association in Dhaka (JCIAD), marking the EPA signed between Bangladesh and Japan on February 6.
The 2025 JETRO Survey on Business Conditions of Japanese Companies in Asia and Oceania was also formally unveiled.
According to the survey, 56.9 per cent of Japanese firms in Bangladesh plan to expand operations, compared to 81.5 per cent in India and 63.4 per cent in Pakistan. Expansion intentions in China stood at 63.2 per cent, while India recorded 75.5 per cent.
The non-manufacturing sector showed stronger growth prospects, with 62.2 per cent of firms planning expansion, compared to 47.6 per cent in manufacturing.
Speaking at the event, Prime Minister's Adviser on Finance and Planning Dr Rashed Al Mahmud Titumir underscored the need to boost investment in manufacturing and ensure technology transfer from Japan, particularly in infrastructure and other key sectors.
He said the EPA could help shift Bangladesh's traditional development model from reliance on official development assistance (ODA) to increased foreign investment.
Japanese Ambassador to Bangladesh Shunichi Saida described the EPA as a strategic partnership based on trust and shared values, expressing hope that post-election reforms would strengthen law and order and drive economic growth through enhanced investment.
Participants at a panel discussion noted that rising middle-class demand is encouraging Japanese firms, especially in non-manufacturing sectors, to expand in Bangladesh.
However, they also expressed concern over frequent policy changes and regulatory burdens, urging authorities to adopt a more business-friendly approach.
Syed Nasim Manzur, Managing Director of Apex Footwear Limited, appreciated the business environment that Apex Footwear has enjoyed through its 50-year partnership with Japan, and said Bangladesh could benefit from increased Japanese investment to move beyond a low-cost, low-productivity model.
He said Japanese investment would help open up Bangladesh to other countries, emphasising that protecting intellectual property rights is critical to attracting such investment.
Dr M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, described the EPA as a legal and institutional framework to ensure Japanese investment and boost bilateral trade, stressing that policy continuity, tax arbitration and related issues must be prioritised by the government.
He added that the non-manufacturing sector is particularly bullish, with 62.2 per cent of firms planning expansion, significantly higher than the 47.6 per cent in the manufacturing sector.
Executive Chairman of the Bangladesh Investment Development Authority (BIDA) Chowdhury Ashik Mahmud Bin Harun also spoke on the occasion.
The panel discussion was moderated by JBCCI President Tareq Rafi Bhuiyan Jun.
smunima@yahoo.com