Beyond Aid and Affinity: Bangladesh and Japan Must Deliver Shared Prosperity

As Prime Minister Tarique Rahman prepares for his first visit to Japan from 26 to 29 October, Bangladesh and Japan stand at an important juncture in a relationship that has evolved from diplomatic friendship into a strategic partnership with considerable economic and regional significance.

The challenge now is to translate decades of goodwill, development assistance and growing political engagement into tangible gains for Bangladeshi businesses, workers and exporters.

Japan recognised Bangladesh on 10 February 1972, shortly after independence, establishing the foundations of a partnership that has endured through changing political circumstances.

Over the decades, Japanese development cooperation has supported infrastructure, transport, energy, education and institution-building.

Today, the relationship extends well beyond traditional aid, encompassing industrial investment, trade liberalisation, technology transfer and maritime security.

The Strategic Partnership established in 2023 provides a framework for this broader engagement. The signing of the Bangladesh–Japan Economic Partnership Agreement (EPA) on 6 February 2026 marked another significant milestone.

The forthcoming visit should therefore be judged not simply by the number of agreements signed, but by whether both governments can establish a credible programme for delivering measurable economic and strategic benefits.
Japan remains one of Bangladesh’s most important development partners.

Its contribution to major infrastructure projects, including Dhaka Metro Rail, the third terminal at Hazrat Shahjalal International Airport and the Matarbari port development programme, has helped address constraints on economic activity and connectivity.

Yet infrastructure is a means to an end, not an end in itself. Matarbari is particularly important.

Supported by Japanese development finance, the port has the potential to strengthen Bangladesh’s maritime logistics capacity and facilitate regional trade.

But its full economic value will emerge only if port facilities are connected efficiently to roads, railways, and industrial zones and customs systems.

Improved connectivity must ultimately translate into faster cargo movement, more competitive exports and greater employment.
Japan’s Bay of Bengal Industrial Growth Belt (BIG-B) initiative offers a wider framework for achieving these objectives.

By linking infrastructure development with an improved investment environment and regional connectivity, BIG-B envisages Bangladesh as a more significant manufacturing and logistics hub.

Its success should be measured by the industries it helps establish, the local enterprises it brings into supply chains and the productivity gains it generates.

The EPA offers an important opportunity to expand bilateral trade and establish clearer rules for economic engagement. It covers market access for goods and services and provides a framework for cooperation in areas relevant to trade and investment.

Bangladesh’s exports to Japan have grown substantially over the past decade, driven in large part by ready-made garments. Bilateral trade exceeded US$3.3 billion in the 2024–25 financial year, according to reported data from the Export Promotion Bureau and Bangladesh Bank.

For diversification, Bangladesh should use the EPA to expand exports of pharmaceuticals, leather goods, light engineering products, processed agricultural goods, information technology services and higher-value apparel.

Achieving this will require more than tariff concessions. Japanese buyers place considerable emphasis on quality, reliability, product traceability, delivery schedules and compliance with technical standards.

Both governments should establish a joint EPA implementation mechanism involving trade officials, business associations and exporters.

It should identify products with realistic export potential, help smaller firms meet Japanese standards and publish regular assessments of market access, export performance and barriers encountered by businesses.

Japan’s proposed expansion of private-sector investment offers another opportunity. Recent reporting has cited a potential investment arrangement worth approximately US$6.36 billion over five years.

The priority should be to convert investment interest into operational factories, productive capacity and sustainable employment. Japanese companies could contribute to automotive components, electronics, machinery, energy, digital services and other manufacturing activities in which Bangladesh seeks to diversify its industrial base.

The Bangladesh Special Economic Zone at Araihazar provides another platform for this ambition. However, the success of such zones should not be measured solely by the amount of foreign capital announced.

Equally important are the number of factories that become operational, the quality of jobs created, the participation of domestic suppliers and the transfer of technical knowledge.

Bangladesh should seek investment agreements that encourage local sourcing, vocational training, managerial development and collaboration with domestic universities and technical institutes. Japanese companies, in turn, would benefit from a larger pool of skilled workers, more capable suppliers and a stronger local industrial base.

Over the next five years, both governments should publish an annual scorecard covering realised investment, new operational facilities, jobs created, worker training, local procurement and growth in non-garment exports. Baselines and targets should be agreed jointly rather than announced retrospectively.

Apart from it, Bangladesh’s geographical position on the Bay of Bengal gives the relationship a significance extending beyond bilateral commerce. The region connects important maritime routes and sits at the intersection of South and Southeast Asia. Japan’s Free and Open Indo-Pacific vision emphasises maritime security, connectivity, international law and regional stability.

Japan’s infrastructure and maritime-security engagement inevitably has wider geopolitical implications as major powers compete for influence across the Indo-Pacific. China’s extensive economic presence in Bangladesh is one factor shaping this environment, while India has its own interests in regional connectivity and access to the Bay of Bengal.

Bangladesh should welcome cooperation that advances its development priorities without allowing infrastructure finance or investment to become a test of geopolitical allegiance. Constructive relations with Japan are compatible with continued economic engagement with China and practical cooperation with India.

The objective should be strategic autonomy: the ability to make independent decisions based on national interests, economic viability and transparent assessments of costs and benefits.

The security dimension of bilateral relations is also developing. Japan’s handover of five patrol boats to the Bangladesh Navy in July 2026 under its Official Security Assistance programme, alongside the defence equipment and technology transfer agreement signed in February, illustrates the widening scope of cooperation. Such engagement can support maritime surveillance, search and rescue, protection of fisheries and the security of vital shipping routes.

Japan’s interests in secure maritime routes are understandable given its dependence on international trade and energy supplies. Bangladesh, meanwhile, has a direct interest in protecting its maritime resources and maintaining a peaceful, open Bay of Bengal.

Cooperation should strengthen these shared interests without implying military alignment against any third country. The Quad, comprising Japan, the United States, India and Australia, is not a framework to which Bangladesh belongs. Dhaka should retain the freedom to cooperate with partners according to its own priorities.

The forthcoming visit should produce a clear implementation agenda. By 2031, the two governments should aim to demonstrate measurable progress in five areas: higher realised Japanese investment; increased and more diversified Bangladeshi exports to Japan; more skilled and better-paid employment; reduced logistics costs through improved infrastructure; and stronger domestic supplier participation in Japanese-led industrial projects.

The relationship has already demonstrated its resilience and breadth. The task now is to ensure that its benefits are distributed more widely across the Bangladesh economy. The real measure of a strategic partnership is not the scale of its promises, but the prosperity it delivers.

(The Writer is the Diplomatic Correspondent of the New Nation)