Bangladesh is entering a decisive phase in its economic journey following its transition out of the Least Developed Country (LDC) category.
As the country faces a more competitive and uncertain global trade environment, export diversification is no longer an option but a necessity.
For decades, the ready-made garment (RMG) industry has powered Bangladesh’s export success, created millions of jobs, and established the country as a major global supplier.
However, this success has also created vulnerability: RMG exports reached about US$39.35 billion in FY2024–25, accounting for roughly 81.5 percent of Bangladesh’s total exports.
In a world of shifting consumer preferences, rising trade pressures, and recurring global shocks, the country can no longer afford to put most of its export ambitions in one basket.
Against this backdrop, Commerce Minister Khandakar Abdul Muktadir’s recent call for building a strong and internationally competitive halal ecosystem deserves serious attention.
The timing is particularly important as the global halal economy continues to expand rapidly. Muslim consumer spending across key halal-related sectors reached an estimated US$2.43 trillion in 2023 and is projected to reach US$3.36 trillion by 2028.
Importantly, the halal economy now extends far beyond food products, covering pharmaceuticals, cosmetics, Islamic finance, tourism, logistics, and other consumer industries.
Globally, halal is increasingly linked not only with religious compliance but also with quality, safety, transparency, traceability, and ethical production.
For Bangladesh, the challenge is not whether the market exists, but whether the country can develop the institutions, standards, infrastructure, and international connections required to become a competitive player.
Bangladesh already possesses many of the foundations needed to participate in this growing market.
The country has a large Muslim population, strong agricultural capacity, a growing pharmaceutical sector, an expanding food-processing industry, and globally competitive leather and manufacturing sectors.
However, Bangladesh’s current position in the global halal market remains limited. Its halal exports were estimated at US$943 million in FY2024–25, with most exports concentrated in agricultural and processed-food products.
The next step is to move beyond basic participation and enter higher-value segments such as halal pharmaceuticals, cosmetics, certified consumer goods, logistics, and tourism.
However, possessing potential and realizing potential are two different things. Malaysia provides an important lesson in how to transform potential into global competitiveness.
Its success did not come simply from being a Muslim-majority country; rather, it resulted from deliberately building a complete halal ecosystem through government-backed certification, clear standards, testing facilities, industry institutions, and international promotion.
Malaysia’s halal framework now covers multiple sectors, while its Halal Malaysia trademark has been registered in 26 countries outside Malaysia.
Bangladesh’s experience can offer a similar lesson: demographic advantage and production capacity create opportunities, but institutions, credibility, and international recognition determine whether those opportunities can be converted into global market success.
Bangladesh, however, has yet to develop a similarly integrated system. Although production capacity exists, certification, testing, traceability, compliance, and marketing systems remain fragmented.
Recent industry discussions suggest that Bangladesh has around 300 halal-certified manufacturers and approximately 600–700 certified export products, yet halal exports remain below US$1 billion.
Therefore, the priority should not only be producing more halal goods but also building an internationally trusted assurance system.
Among the recommendations discussed at the BIISS seminar, establishing an independent and internationally recognized halal certification framework is particularly important.
Fragmented certification procedures, high costs, and limited global recognition remain barriers to export expansion.
In international trade, trust is as important as production capacity. Consumers, regulators, and importers require certification systems that follow accepted global standards and provide confidence beyond national borders.
A credible halal assurance system should therefore become a central pillar of Bangladesh’s halal economy strategy.
Investment will also be essential for expanding halal industries. Bangladesh needs both domestic and foreign investment to move into higher-value halal sectors. However, investors require policy certainty, reliable infrastructure, and access to international markets.
As Bangladesh prepares for LDC graduation, strengthening market access and creating a favorable investment environment will be increasingly important for attracting investment into emerging industries.
Beyond investment, Bangladesh should develop dedicated halal industrial clusters that integrate production, testing, certification, logistics, and supporting services.
Treating halal as an integrated industrial sector rather than a collection of individual products can reduce costs, encourage innovation, and connect local producers with international buyers. Such clusters could transform existing capabilities into a globally connected halal supply chain.
Small and medium-sized enterprises (SMEs) should also remain central to this strategy. Halal markets create opportunities for small producers, entrepreneurs, and innovators, but many require support in finance, technology, certification, and market access.
Sustainable programmes are needed to help SMEs participate effectively in global halal value chains. At the same time, Bangladesh must move beyond certification and develop a strong global identity.
A credible “Bangladesh Halal” brand, supported by consistent quality and internationally recognized standards, could help businesses build consumer trust across Asia, the Middle East, Africa, and other growing markets.
The importance of the halal economy extends beyond export earnings. It can create connections among agriculture, pharmaceuticals, food processing, logistics, finance, and tourism while supporting industrial upgrading and economic diversification.
At a time when Bangladesh’s traditional export advantages face increasing pressure, building a credible halal ecosystem could become an important pathway toward a more resilient economy.
Bangladesh now has a strategic choice. It can remain a producer of halal goods without developing the institutions and global networks required for large-scale competitiveness, or it can transform the halal economy into a deliberate national export strategy. The opportunity is significant, but it will not be achieved through potential alone.
It requires credible institutions, private-sector initiative, international market access, and sustained policy commitment. If Bangladesh builds these foundations successfully, the halal economy could become one of the country’s most promising new frontiers for export diversification and global competitiveness.
(Writers: Dr. Zobayer Ahmed is an Associate Professor at the Bangladesh Institute of Governance & Management (BIGM). Email: ecozobayer@gmail.com & Mr. Ayub Ali is a Research Officer at the Center for Strategic and Peace Studies (CSPS). Email: ayub.bd404@gmail.com)