Published : 25 October 2026
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Updated : 25 October 2026, 00:10
Md Shariful Islam
Prime Minister Tarique Rahman’s scheduled visit to Japan on 26 October 2026 comes at a significant moment in Bangladesh-Japan relations, as Dhaka seeks to deepen economic and strategic engagement with Tokyo. During the visit, Bangladesh is set to propose a US$14 billion investment and cooperation package spanning 12 priority sectors, including transport, technology and energy. The visit provides an opportunity to assess the evolving bilateral partnership and identify avenues for expanding cooperation in an increasingly complex regional geopolitical environment.
Bangladesh’s strategic location at the crossroads of South and Southeast Asia holds considerable significance for regional and global powers, including Japan. This importance has long been recognised in Japan’s official foreign policy assessments. The 2021 Diplomatic Bluebook describes Bangladesh as “geopolitically very important as an intersection between India and ASEAN” (MOFA, Japan, 2021, p. 79). Bangladesh’s geographical position, together with its growing geostrategic relevance amid evolving regional dynamics, has also been a key consideration underpinning Japan’s Bay of Bengal Industrial Growth Belt (BIG-B) Initiative, which places Bangladesh at the centre of its regional connectivity and economic development strategy.
Deepening Bangladesh-Japan investment ties
According to a survey conducted by the Japan External Trade Organization (JETRO), 73.2 per cent of the 57 companies interviewed said Bangladesh was their top priority for business expansion; 61 per cent said the country had high growth potential. The survey covered Japanese firms across 20 countries in Asia and Oceania. Among these 20 countries, Bangladesh ranked second in terms of profitability for Japanese companies, owing to low wages and production costs. Bangladesh has also taken steps to create a more favourable investment environment. One notable example is the Bangladesh Special Economic Zone (BSEZ) in Araihazar, Narayanganj, developed in partnership with Japan to attract Japanese and other foreign investors.
Foreign Secretary Asad Alam Siam and Japan's Senior Deputy Foreign Minister Namazu Hiroyuki lead their respective delegations at the seventh Bangladesh-Japan Foreign Office Consultations in Dhaka on 12 August 2026. The consultations formed part of ongoing diplomatic engagement to strengthen bilateral relations. Photo: MOFA, Bangladesh.
In recent years, several leading Japanese companies have expressed interest in investing in Bangladesh or expanding their existing operations in the country. Japanese businesses are also exploring opportunities in Bangladesh and neighbouring markets as part of their “China Plus One” strategy, which seeks to diversify production and investment beyond China and reduce dependence on a single market. Bangladesh and Japan signed an Economic Partnership Agreement (EPA) in February 2026, marking an important step towards deepening bilateral economic cooperation. Its effective implementation could further strengthen trade and investment ties and generate mutual economic benefits.
Promoting trade relations
Trade between Bangladesh and Japan has expanded steadily over the past decade, driven largely by growing demand for competitively priced Bangladeshi garments. Bangladesh’s exports to Japan have increased significantly since 2011, when Japan relaxed its rules of origin for knitwear imports from least-developed countries (LDCs), enabling Bangladeshi products to benefit from duty-free market access. According to data from the Export Promotion Bureau (EPB) and Bangladesh Bank (BB), Bangladesh’s annual exports to Japan first exceeded US$1 billion in FY2015–16, rising sharply to US$2.8 billion in FY2021–22. Japan is now Bangladesh’s ninth-largest export destination globally and second-largest in Asia.
Nevertheless, there is ample scope to expand Bangladesh-Japan bilateral trade. For instance, Bangladesh has considerable potential to increase its exports of ready-made garments and pharmaceuticals to the Japanese market. Japan’s Finance Ministry data show that the country imported US$24.72 billion worth of apparel, with the bulk (US$22.96 billion) coming from Asia, including US$13.57 billion from China alone. China's share of Japan's textile product imports fell below 50 per cent in 2025, reaching a 31-year low. The resulting gap is increasingly being filled by Southeast and South Asian countries. Vietnam's share rose by 7.7 percentage points over the past decade to 17.4 per cent, while Bangladesh gained two percentage points to reach only 4.3 per cent. It is also encouraging that Bangladesh has already begun exporting ICT products to Japan, which could become another promising area of bilateral trade.
Expanding Bangladesh-Japan labour cooperation
From Bangladesh’s perspective, labour migration and diaspora connections are critical to its relations with Japan. According to BMET, between 1976 and 2020, of the 1.3 crore Bangladeshi migrant workers who went abroad for employment, only 0.02 per cent went to Japan. Several factors make Bangladesh a promising source of skilled workers to meet Japan’s growing labour demand.
Bangladesh and Japan should move beyond immediate economic gains to deepen cooperation in maritime security, technology transfer and sustainable development. Japan has much to offer in terms of technology, expertise and institutional experience, while Bangladesh brings a young workforce, a growing market and a strategically important position in the Bay of Bengal. The challenge lies in translating these complementary strengths into a lasting partnership grounded in mutual respect and shared prosperity.
First, Bangladesh offers a large pool of semi-skilled and skilled workers, while Japan faces a severe shortage of people of working age. According to a joint survey by Persol Research and Consulting and Chuo University, Japan will face a shortage of approximately 6.44 million workers by 2030. The proportion of people aged over 65 had already reached 28 per cent, one of the highest in the world, as reported by The Washington Post. Although there is considerable discussion about the Fourth Industrial Revolution, in which machines may replace human workers, human resources remain essential. The demand for human labour is unlikely to disappear anytime soon. Therefore, to address its labour shortages, Japan has increasingly opened its doors to foreign workers. In this context, Japan introduced legal amendments in 2018 to grant visas to more foreign workers and address its tightening labour market.
Against this backdrop, labour migration presents a promising avenue for cooperation between Bangladesh and Japan. Encouragingly, in August 2019, Bangladesh and Japan signed a Memorandum of Cooperation (MoC) to facilitate the recruitment of Bangladeshi workers under Japan’s Specified Skilled Worker (SSW) programme across 14 sectors. Bangladesh was the ninth country to sign such an MoC with Japan as a sending country for specified skilled workers. In addition, in May 2025, Bangladesh and Japan reached an agreement to recruit at least 100,000 Bangladeshi workers over the following five years to help address Japan’s severe labour shortage.
Building on these bilateral arrangements for labour cooperation, Bangladesh and Japan signed a five-year Memorandum of Cooperation on Employment Skills Development (ESDP-MoC) on 17 October 2026. The agreement, which will be automatically renewable for another five years, aims to facilitate the recruitment of Bangladeshi workers in Japan from 1 April 2027. The agreement marks a significant step towards expanding employment opportunities for Bangladeshi workers in Japan. With a formal framework for labour cooperation now in place, Bangladesh needs to focus on its effective implementation to maximise the opportunities it offers.
Prime Minister Tarique Rahman meets a Japanese delegation led by Parliamentary Vice-Minister for Foreign Affairs Shimada Tomaki at the Prime Minister's Office in Dhaka on 1 July 2026. Discussions covered bilateral cooperation in energy, airport infrastructure development and Rohingya repatriation. Photo: PMO
Strengthening Bangladesh-Japan maritime security and blue economy cooperation
The Bay of Bengal and the wider Indian Ocean region have become increasingly important arenas of strategic competition among regional and extra-regional powers. Against this backdrop, closer cooperation between Bangladesh and Japan is essential to address growing non-traditional security challenges, including climate change, piracy and illegal, unreported and unregulated (IUU) fishing.
During Japanese Prime Minister Shinzo Abe’s visit to Bangladesh in September 2014, the two countries agreed to strengthen cooperation in the blue economy. However, progress in this area has remained limited despite its growing strategic and economic significance. Bangladesh continues to face constraints in investment, technology and skilled human resources, limiting its ability to harness marine resources sustainably. As a major maritime nation with advanced technological capabilities and expertise, Japan is well positioned to support Bangladesh in developing its blue economy while strengthening maritime cooperation.
Looking ahead, Bangladesh and Japan should move beyond immediate economic gains to deepen cooperation in maritime security, technology transfer and sustainable development. Japan has much to offer in terms of technology, expertise and institutional experience, while Bangladesh brings a young workforce, a growing market and a strategically important position in the Bay of Bengal. The challenge lies in translating these complementary strengths into a lasting partnership grounded in mutual respect and shared prosperity.
Dr Md Shariful Islam is Associate Professor and Chairman of the Department of International Relations at the University of Rajshahi. He can be contacted at [email protected].
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