Bangladesh-Australia Trade Relations
Bangladesh-Australia Bilateral Trade:
Bangladesh and Australia have witnessed a substantial expansion in bilateral trade over the past decade, exceeding A$2.6 billion, with the bilateral trade in goods accounting for A$2.0 billion. Bangladesh now ranks as Australia’s 32nd largest trading partner. Despite unrealized potential, the trade relationship is expected to expand significantly in coming years as Bangladesh’s economy continues to grow and flourish.
Bangladesh’s primary exports to Australia comprise readymade garments including knitwear and woven wear, along with textile products which account for 93% of the total exports. In addition to that, Bangladesh also exports leather goods and footwear, processed food, fish, and jute goods.
On the other hand, Bangladesh’s major imports from Australia consist of a range of products including agricultural items such as cotton, wheat, edible vegetables, oilseeds, fruit, grains, lentil, pulses, as well as minerals and metals such as iron, steel, copper, zinc, and lead. Bangladesh also imports milk cream and other dairy products, scraps, and other industrial raw materials from Australia. In 2021-22, Bangladesh exported goods worth 1.3 billion dollars to Australia, whereas Australia set a record by exporting agricultural, fisheries and forestry products to Bangladesh worth A$1.2 billion, according to the ABS 2022 report.
Special Access of Bangladesh Goods in Australian Market: Bangladeshi goods have been enjoying duty-free-quota-free access to the Australian market since 2003, subject to the fulfillment of Rules of Origin (RoO) criteria. On September 15, 2021, Australia and Bangladesh formally signed the Trade and Investment Framework Arrangement (TIFA) which is expected to contribute to the expansion of bilateral trade opportunities in multiple sectors, including agriculture, infrastructure, and education.
Bangladesh-New South Wales Trade Statistics
The bilateral trade relationship between Bangladesh and New South Wales (NSW) is significant, as Bangladesh is ranked 16th among NSW’s top trading partners, accounting for 22% of Australia’s total bilateral trade with Bangladesh. In FY2021-22, the two-way trade reached A$689 million, and Bangladesh’s exports to NSW alone were worth A$393 million.
The exports from Bangladesh to New South Wales have increased by 27% in the past six years, with textiles, clothing, and footwear representing 96% of total bilateral trade. Moreover, NSW accounts for approximately 16% of Australia’s total exports to Bangladesh.
The Economic Profile of Bangladesh
Bangladesh has made significant strides in its economic growth and is one of the world’s fastest-growing economies. The country’s GDP has increased by over 7% per year on average in the past decade, reaching 8% in fiscal years 2017-18 and 2018-19 before the global outbreak of COVID-19. Despite the pandemic, the Asian Development Bank reported that Bangladesh’s economy rose by 5.2% in 2020, and economic growth has now returned to pre-epidemic levels at 7.25% as the country made a strong economic recovery from the COVID-19 pandemic. Bangladesh has also reached lower-middle-income status in 2015 and is on track to graduate from the UN’s Least Developed Countries (LDC) list in 2026.
Bangladesh has established itself as a robust economic powerhouse, thanks to its competitive labor force, adaptable industrial sectors, and a favorable legislative framework. With a young and skilled workforce, the country boasts macroeconomic stability, an open and diversified economy, and a strategic location that makes it a gateway to the Asia-Pacific region. It is no surprise that Bangladesh has emerged as a key market for exporters due to its low-cost and high-return investment opportunities. The International Monetary Fund (IMF) ranks Bangladesh as the second-largest economy in South Asia and the 41st largest globally. This momentum shows no signs of slowing down as Bangladesh is projected to be the 25th largest economy by 2035. It is now considered one of the most promising economies globally, drawing the attention of potential investors from all over the world.
The Government of Bangladesh (GOB) is actively seeking foreign investment, recognizing the significant benefits that such investment can bring to the country. Key sectors that have already seen significant investment from overseas include agribusiness, garment and textiles, leather and leather goods, light manufacturing, power and energy, electronics, light engineering, information and communications technology (ICT), plastic, healthcare, medical equipment, pharmaceuticals, shipbuilding, and infrastructure. As part of its broader industrial policy and export-oriented growth strategy, the GOB is offering a range of attractive investment incentives designed to encourage both foreign and domestic private investors to participate in the country’s development. With a relatively level playing field and few formal distinctions between foreign and domestic investors, Bangladesh is emerging as a highly promising destination for those looking to expand their portfolio and tap into the country’s dynamic and rapidly growing economy.
Investment opportunities in Bangladesh's export-oriented industries
According to the World Statistics Review 2019, Bangladesh achieved the second-highest export growth globally from 2008-2018, with an average annual export growth of 9.8%. In addition to its world-renowned apparel sector, Bangladesh has proven to be competitive and demonstrated capacity in other industries such as leather goods and footwear, processed food, fish, and jute goods. The pharmaceutical and ICT industries have recently shown strong performances in exports and domestic production, with over 1200 pharmaceutical products registered for export to more than 100 countries, including the USA, UK, Australia, and Africa. The government has declared the ICT sector as a priority sector and set a target to reach a US$5 billion export value by 2021. Additionally, the shipbuilding and light engineering sectors are demonstrating impressive export potentials.