Japanese firms bet on Bangladesh frontier market

Bangladesh is rapidly emerging as a “high-stakes frontier for growth” for Japanese investors, with rising profitability, expanding business plans, and a decisive shift toward the domestic consumer market, according to the latest FY2025 survey by the Japan External Trade Organisation (JETRO).

The findings were unveiled at the “Japan Business Day” event, jointly organised by Embassy of Japan in Bangladesh and JETRO Dhaka at a city hotel on Monday.

A comprehensive FY2025 survey of 5,109 Japanese-affiliated companies reveals a significant shift in the investment landscape across Asia and Oceania, with Bangladesh emerging as a critical growth frontier despite persistent regional risks.

Bangladesh is seen as a “high-stakes frontier” for Japanese investment.

About 350 Japanese companies are operating in the country, with more moving into consumer sectors.

Around 56.9 per cent of Japanese firms plan to expand in the next two years, which is similar to Vietnam and higher than the global average.

Expansion is stronger in non-manufacturing than in manufacturing. Profit expectations are also improving, with 60.6 per cent of companies expecting to make a profit in 2025, up from 47 per cent in 2024.

Bangladesh is also ahead of many developing countries in human rights due diligence, with 40.7 per cent of firms already applying it.

The country attracts investors because of its large market of over 180 million people and steady economic growth of 5 to 6 per cent over the past decade.

As incomes rise to nearly $3,000 per person, Japanese brands like Honda, Mitsubishi, and Ajinomoto are focusing more on local consumers.

However, there are challenges. Many companies are concerned about political and social instability, and unclear policies. Businesses also face complicated customs procedures and a lack of transparency.

Speaking at the event, Economic Adviser to the Prime Minister Rashed Al Mahmud Titumir framed the bilateral relationship in broader historical and strategic terms.

“Both of us share the rising red sun in our flags,” he said, calling the partnership a ‘civilisational link’ rooted in the ‘very rice we eat”.

“Historically, we have seen Japan drive the ‘flying geese paradigm,’ fostering economic diversification and productivity across Asia long before the UN conceptualized South-South collaboration,” he said.