From a trusted partner to a growth partner: The next chapter of Bangladesh–Japan economic relations

Japan’s role in Bangladesh goes far beyond that of a development partner. It is one of our most trusted, tested and long-standing friends. Since our independence, Japanese cooperation in infrastructure, power, transport, healthcare, education and human-resource development has become woven into the everyday lives of Bangladeshis. From the Jamuna Bridge to the Dhaka Metro Rail, many landmark national achievements bear the imprint of Japanese financing, technology, discipline and commitment to quality. The greatest asset in this relationship, however, is not the amount of money involved. It is mutual trust.

The global economy is now changing rapidly. Supply chains are being reorganised, Japanese companies are seeking new production bases and consumer markets, and Bangladesh is approaching its graduation from least developed country status. The Bangladesh–Japan Economic Partnership Agreement, signed in February 2026, is therefore much more than a trade agreement. It is a historic opportunity to elevate the relationship from one centred largely on development cooperation to a broader partnership in trade, investment, technology and joint production. The question is whether Bangladesh can align the speed of its decisions and implementation with the scale of this opportunity.

Approximately 350 Japanese companies are now operating in Bangladesh, and the number is gradually increasing. Their presence is expanding beyond garments and textiles into motorcycles and automobiles, electronics, healthcare, consumer products, chemicals, information technology, logistics and infrastructure. Japanese investment has a distinctive value. Japanese companies generally take a long-term view, train local employees, prioritise safety, quality and environmental responsibility, and help develop local suppliers. A Japanese factory brings more than capital; it introduces new standards of work, transfers knowledge and strengthens access to global markets.

Japanese infrastructure proposals may sometimes appear more expensive at the initial construction stage. But national infrastructure should not be judged only by the lowest quoted price; its cost and benefits must be assessed across the entire life cycle. Timely and dependable delivery, durable construction, high safety standards, lower maintenance requirements, advanced technology, and the transfer of knowledge to local engineers and companies can substantially outweigh an initial price difference. Bangladesh should therefore evaluate major projects not only by the ‘lowest upfront cost’ but also by the ‘highest lifecycle value’.

The Bangladesh Special Economic Zone at Araihazar is a visible symbol of this potential. It should not be treated merely as a land-allocation project. If uninterrupted utilities, effective waste management, efficient customs, skilled workers, quality housing and reliable road and port connectivity are ensured, it can become an exemplary industrial base for Japanese and other international manufacturers. The success of its first investors will be Bangladesh’s most persuasive advertisement to the next hundred companies.

From my years of working closely with Japanese businesses, I see genuine interest in Bangladesh. Our young population, expanding consumer market, competitive workforce and strategic location on the Bay of Bengal are compelling advantages. Yet a gap remains between interest and investment. That gap is primarily about policy predictability, the speed of decisions and coordination in implementation.

Japanese companies are generally reluctant to complain publicly. They wait patiently, collect information and assess risk. But indefinite delays in licences and approvals, inconsistent interpretations of tax and customs rules, sudden policy changes, difficulties involving foreign exchange and profit repatriation, uncertainty over contractual continuity, and weak coordination among agencies can slow investment decisions. Identifying these concerns is not criticism of Bangladesh; it is a practical reform agenda. A country that values an investor’s time will ultimately be valued more highly by investors.

Our ‘one-stop service’ must therefore become more than a website or an application counter. Each investor should have a responsible case manager, every approval should have a clear deadline, silence should be replaced by written decisions, and unresolved matters should have an effective escalation route. Solving the problems of existing investors—investor aftercare—is as important as attracting new ones. A satisfied Japanese company is Bangladesh’s most credible ambassador in Japan.

At this moment, three projects deserve the highest national priority: Matarbari Deep Sea Port, Dhaka’s expanding metro rail network, and the third terminal of Hazrat Shahjalal International Airport. These are not three separate construction projects. Together, they form the infrastructure backbone of Bangladesh’s future competitiveness. Matarbari will be our maritime gateway, Terminal 3 our aviation gateway, and the metro network the mobility and productivity backbone of the capital.

Matarbari can fundamentally transform Bangladesh’s logistics system. If large ocean-going vessels can call directly, dependence on transshipment through regional ports and on smaller feeder vessels will decline. This can significantly reduce both the time and cost of moving imports and exports. Garments and emerging export sectors will become more competitive, industrial raw materials can arrive more quickly, and Bangladesh can position itself as an important node in regional supply chains.

But constructing the port is not enough. Timely road and rail links, modern customs, a digital port community system, efficient operations, and planned industrial and logistics zones must be developed in parallel. Operational readiness from the first day—not merely the date of inauguration—will determine the port’s success. Matarbari should be seen not as a project in Cox’s Bazar, but as a transformation project for Bangladesh’s trade and industrial competitiveness.

Dhaka’s first metro line has already demonstrated how the right project can change people’s behaviour, their sense of time and their expectations of a city. MRT Line 6 is visible evidence of what Bangladesh can achieve with Japan. However, unresolved issues involving cost, procurement and implementation methods in MRT Line 1 and MRT Line 5 could cause serious delays. Prolonged uncertainty would increase both time and cost and could weaken confidence among the partners.

The priority should not be blame, but resolution. An empowered joint task force comprising Bangladeshi and Japanese policymakers, financing agencies, implementing authorities and technical experts should be mandated to reach a time-bound solution that balances realistic costs, competition, safety, technology and the conditions of the financing agreements. Every month of delay has an economic cost, and that cost must be visible in the decision-making process.

Terminal 3 can become the new international face of Bangladesh. Once a world-class building has been constructed, the most important task is to ensure world-class operations. Operational readiness, security, passenger service, baggage and ground handling, cargo management, cleanliness, technology and clear lines of responsibility must be tested well before opening. Bangladesh needs an arrangement that combines experienced international operators with local partners and ensures genuine knowledge transfer, so that passengers and airlines receive a reliable experience from the first day. An airport does more than process travellers; it sends an investor the first message about a country’s capacity and culture.

Bangladesh should consider establishing a high-level Japan–Bangladesh Flagship Project Delivery Council for these three initiatives. It should not become another bureaucratic layer. It should be a small, empowered platform designed to remove decision bottlenecks. A concise monthly dashboard should place milestones, risks, required decisions and accountable agencies before the national leadership. Making problems visible early—rather than concealing them—is how major projects save both time and money.

Several additional policy measures could produce rapid improvements in the business environment. First, Bangladesh needs an empowered Japan Investment Fast Track linking BIDA, BEZA, the National Board of Revenue, Bangladesh Bank and the relevant ministries. Second, significant tax, customs and investment-policy changes should be preceded by consultation, a reasonable transition period and protection of the legitimate rights of existing investors.

Third, commercial disputes and government-contract issues require a fast, impartial and time-bound resolution mechanism. Fourth, a dedicated EPA implementation cell should coordinate product standards, rules of origin, customs, trade in services and exporter preparedness. Fifth, Bangladesh must position itself not merely as a low-cost labour destination, but as a skills and technology partner.

Joint training centres can be developed for Japanese language, kaizen, industrial safety, mechatronics, welding, cold-chain management, healthcare, information technology and middle management. Universities and technical institutions need long-term partnerships with Japanese companies. Qualified Bangladeshi SMEs should also receive support to meet standards, obtain certification and financing, and enter the supply chains of Japanese corporations. This would multiply the local economic impact of every investment.

Our diplomatic relationship with Japan is exceptionally warm. Our economic management should rise to the same standard. In Japanese business culture, trust takes time to build, but once established it can sustain a relationship for decades. Conversely, when uncertainty persists, Japanese companies may quietly choose another destination without making public complaints. Competition is therefore not only about incentives; it is about credible execution. Vietnam, India, Indonesia and other economies are moving quickly to attract Japanese investment. Bangladesh must convert its own strengths into speed of decision and reliability of implementation.

For decades, Japan has shared financing, technology and knowledge with Bangladesh. The time has come to build a partnership in which Bangladesh also offers Japan a dependable production base, a large consumer market, capable young people, regional connectivity and opportunities for joint innovation. Our objective should not be merely to attract a few more Japanese companies. It should be to build the next phase of Bangladesh’s industrialisation with them.

The vessels calling at Matarbari, the aircraft arriving at Terminal 3, and the metro rail running through Dhaka can together tell the story of a new Bangladesh—a country that plans carefully, decides on time, upholds global standards and values long-term partners. The foundation of Bangladesh–Japan relations is already strong. What it needs now is speed. If we can provide that, Japan will remain not only one of Bangladesh’s foremost development partners, but can also become one of the principal partners in our industrialisation, export diversification and rise within the Asian economy.

* Tareq Rafi Bhuiyan is the president of the Japan–Bangladesh Chamber of Commerce and Industry (JBCCI) and managing director of NewVision Solutions Limited.

* The views expressed here are the author’s own.