Japan is a major trading partner and important source of foreign direct investment for Bangladesh.  Annual export figures to Japan is above 1 billion dollars since 2015-16. The amount of bilateral trade crossed the $3 billion mark in 2017-18. Export to Japan has increased by more than three times in last ten years. Currently, Japan is Bangladesh's 11^th largest export destination in the world and 2^nd in Asia. In 2018-19 export to Japan had a growth of 20.74%. However, due to the pandemic Covid-19, Bangladesh export to Japan declined in 2019-20 and 2020-21.

(Value in million US$)

Table 1: Bangladesh Japan Trade Relation; Source: EPB & Bangladesh Bank

 Export target of Tokyo Mission for FY 2021-22 is 1300 million USD and strategic target for July-February period is 868.19 million USD while Tokyo Mission has achieved 895.03 million USD which is 3.09% more of the target and 12.63% more of the same period of the previous year.

Bangladesh enjoys duty and quota-free access to almost all goods it exports to Japan, and that has contributed significantly to the growth in trade.  Further, the GOJ has assured that our GSP facilities will continue even after we graduate from the LDC status to allow for sufficient transition period.

Export Basket to Japan

Exports from Bangladesh to Japan in 2020 include Clothing / accessories (excluding knits) (39.6%), clothing / accessories (limited to knits) (39.1%), leather products (4.3%), home textile products (3.9%), footwear (2.6%) etc.

Import Basket from Japan

Imports from Japan in 2020 include Steel (42.9%), transportation equipment (16.5%), machinery (11.5%), electrical machinery / equipment and its parts (2.6%), mineral fuels, etc. (2.4%).

Apparel Export to Japan

The export of Bangladeshi apparel, the top exportable to Japan, achieved the highest growth in 2018. It grew by 33.5% by volume surpassing all its competitors and was way above the overall growth of 5.8% making Bangladesh the 3^rd biggest apparel exporter to Japan both in volume (5.6%) & value (3.9%). Currently, Bangladesh is the fourth largest supplier of apparel products in Japan having 4.3% share in Japanese market.

Potential areas for growth in Trade

Export basket to Japan shows our dependence on apparel sector urging for export diversification. We need to rely on our forte in the apparel sector increasing the export earnings by adding high value product lines. Besides, ITES products look to be promising in the huge Japanese IT market.

Japanese Investment Trend

The number of Japanese companies that have operations in Bangladesh has risen to 324 as of February 2021, increased from 183 in 2014. In 2018 Japan Tobacco acquired a Bangladeshi company through an investment worth 1476 million USD.

(Value in USD Million)

Table 2: Country wise Foreign Direct Investment (Net); source: Bangladesh Bank

In 2021, Japan Bank for International Cooperation (JBIC) survey on ' Overseas Business Operation by Japanese Manufacturing Companies (Survey of Overseas Direct Investment by Japanese Companies) Bangladesh has been ranked 16^th promising country for overseas business over mid-term (next 3 years). According to the latest annual survey of Japan External Trade Organization (JETRO), 68 per cent of the Japanese companies interviewed in 2021 expressed their willingness to expand business this year and in 2023.

 Japanese Companies in Bangladesh

A wide range of Japanese companies are engaged in trading, manufacturing and implementing infrastructure projects. All six major trading houses of Japan has strong presence in Bangladesh. Besides trading commodities, these Japanese corporations are involved in various development projects.  Manufacturing industries ranging from motorcycles to apparel are helping in employment generation as well as rapid industrialization with technological up gradation. Japanese SMEs are increasingly exploring Bangladesh in IT, logistics and other service sectors.