Bangladesh FDI jumps 45pc in 2025

Bangladesh recorded a strong rebound in foreign direct investment (FDI) in 2025, with inflows rising nearly 45 per cent year-on-year to US$1.78 billion, making it the third-largest recipient of foreign investment in South Asia after India and Pakistan, according to the World Investment Report (WIR) 2026 released by the UN Trade and Development (UNCTAD) on Tuesday.

The report shows that Bangladesh attracted US$1.78 billion in FDI in 2025, up from US$1.23 billion in 2024, reversing two consecutive years of decline despite a challenging global investment climate.

The recovery places Bangladesh among the region’s stronger performers as total FDI inflows into South Asia rose to US$46.1 billion in 2025 from US$34.1 billion a year earlier.

India remained the region’s largest investment destination, attracting US$38.9 billion in FDI, a 44 per cent increase from US$27.1 billion in 2024, supported by robust investment in manufacturing, services and supply-chain diversification.

Pakistan ranked second in South Asia with US$1.85 billion in FDI, although inflows declined from US$2.67 billion in the previous year.

Bangladesh followed closely with US$1.78 billion, reflecting one of the region’s strongest growth rates.

According to the report, South-East Asia emerged as the largest FDI recipient among developing sub-regions, while India’s strong performance helped drive overall investment growth across South Asia.

Globally, foreign direct investment increased 6 per cent to US$1.6 trillion in 2025, ending two years of decline. However, UNCTAD cautioned that the recovery remains “fragile and uneven”, with investment flows continuing to be influenced by economic uncertainty and geopolitical tensions.

FDI to developing economies rose 2 per cent to US$901 billion, while developing Asia retained its position as the world’s largest recipient among developing regions.

Within Asia, investment inflows increased marginally to US$644 billion, masking contrasting regional trends. Investment declined in East Asia, including China, but expanded in South-East Asia, South Asia, West Asia and Central Asia.

UNCTAD attributed the global recovery largely to increased investment in digital infrastructure, advanced manufacturing, energy transition technologies and other strategic industries.

The report also suggests Bangladesh has considerable scope to attract additional foreign investment, particularly in manufacturing, services, infrastructure and technology-related sectors.

Analysts say the country’s large domestic market, competitive labour force, strategic geographic location and ongoing economic reforms provide a solid foundation for sustained FDI growth.

Continued progress in industrialisation and connectivity is also expected to strengthen Bangladesh’s appeal to international investors.

With a gross domestic product now exceeding US$500 billion, Bangladesh is increasingly being viewed as a long-term investment destination with significant untapped potential.

Established in 1964, UNCTAD is the United Nations’ principal body on trade and development.

It supports 195 member states through policy analysis, technical assistance and intergovernmental dialogue, with a focus on helping developing countries leverage trade, investment, finance and the digital economy for inclusive and sustainable growth.

Despite the improved investment outlook, the report warns that global prospects remain uncertain due to persistent trade policy volatility and geopolitical tensions, which continue to weigh on cross-border investment decisions.