Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 12/10/2018

Bangladesh is a country the size of Iowa, situated in the northeastern corner of the Indian subcontinent and bordered by India and Burma, with a population of 163 million.  Bangladesh is the eighth most populous country in the world, and the most densely populated other than city states.  Bangladesh is an excellent potential market for U.S. exports. 

With a growing middle class, Bangladesh attained the World Bank’s lower-middle income status in 2015 with a GNI per capita of $1,190 which grew to $1,330 in 2016.  Bangladesh has enjoyed consistent annual GDP growth of over six percent since 2005.  Much of this growth continues to be driven by exports from the $28 billion ready-made garments (RMG) industry, second in overall value to China, and continued remittance inflows from expatriate labor, which reached $13.5 billion in fiscal year (FY) 2017. 

According to the International Monetary Fund (IMF), Bangladesh’s GDP reached $249.7 billion in FY 17 with an annual growth rate of 7.2 percent.  Despite this growth, a fiscal policy priority will be domestic resource mobilization, as tax revenues are only 10.3 percent of GDP.  The financial sector will also need to address the persistent problem of State-controlled banks’ non-performing loans (NPL) and an increasing consumer price index (CPI) which reflects growing inflationary pressures.  The Government of Bangladesh actively seeks foreign investment, particularly in the apparel industry, energy, power, and infrastructure projects.  It offers a range of investment incentives under its industrial policy and export-oriented growth strategy, with few formal distinctions between foreign and domestic private investors.  According to the IMF, Bangladesh received foreign direct investment (FDI) net inflows of $2.1 billion in FY 16, down from $2.3 billion in the previous year.  Bangladesh estimated foreign exchange reserves decreased from $33 billion in FY 16 to $32 billion in FY 17, the equivalent of 5.2 months of projected annual goods and services imports.

Bangladesh's export economy is dominated by RMG manufacturing, but the country remains largely rural with an urbanization rate of only 35 percent of the population.  While the agriculture sector employs 41 percent of the population, it accounted for only 14.7 percent of GDP in 2016.  The industrial sector accounts for 28.7 percent of GDP and employs 20.8 percent of the population, primarily in the RMG and light manufacturing sectors.  The services sector accounts for 56.4 percent of GDP and employs 38 percent of the population.  The services sector, including information and communication technology (ICT) services, has strong potential for growth over the next decade.

Bangladesh has one of the lowest wage rates in the world, which has fueled an expanding industrial base led by the RMG industry; however, it is well-positioned to diversify its exports and move up the value chain.  The country also has large pharmaceutical, agricultural-processing, and ship building industries.  Other important sectors include construction, ICT and business process outsourcing, light engineering, leather products, jute products, and ceramic products.  There is substantial scope for U.S. companies to enter the market and invest in these thrust sectors.

Dhaka, home to the Dhaka Stock Exchange, is the primary economic, political and cultural center of Bangladesh.  Located on the coast, Chittagong, the second largest economic and financial hub of Bangladesh, hosts the country’s major seaport which handles 98 percent of container cargo and 92 percent of total cargo volume.  Nearly twenty-six million Bangladeshis concentrated mainly in Dhaka and Chittagong have annual incomes exceeding $12,000, offering a sizable market for goods and services.

The United States was the number one export destination for Bangladeshi products, and Bangladesh is currently the United States’ 50th largest goods trading partner with $7.1 billion in total (two-way) goods trade during 2017.  U.S. goods exports to Bangladesh totaled $1.4 billion while goods imports totaled $5.6 billion, resulting in a U.S. goods trade deficit with Bangladesh of $4.2 billion in 2017.  The top import categories in 2017 were: articles of apparel and clothing ($5 billion), textile yarn and fabrics ($237 million), footwear ($101 million), miscellaneous manufactured goods ($83 million), and handbags ($61 million).

The top export categories from the United States to Bangladesh in 2017 were: oil and seeds ($395 million), textile fibers ($285 million), metalliferous ores ($180 million), cereals ($99 million), and animal fodder ($81 million).  U.S. total exports of agricultural products to Bangladesh grew from $496 million in 2016 to $884 million in 2017.  Leading domestic export categories included: oilseeds ($437 million), cotton ($283 million), grains and feeds ($139 million), poultry ($13 million), and horticulture products ($6 million).
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.