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Bangladesh to attract foreign investments: US Report

Jul 27, 2021
Bangladesh to attract foreign investments: US Report

Bangladesh 

Bangladesh will continue to attract foreign direct investments (FDI) as a favourite place for global investors, despite the Covid-induced economic downturn, according to the news report released by the US Department of State, which is titled “2021 Investment Climate Statements”. It mentioned Bangladesh's sustained economic growth over the past decade, a large, young, and hard-working workforce, strategic location between the large South and Southeast Asian markets, and the presence of a vibrant private sector. 

The Bangladesh government's efforts to improve the business environment in recent years show promise, but implementation has yet to materialize, according to the report, which analyses the investment climate in more than 170 global economies that are current or potential markets for US companies. 

Bangladesh has made gradual progress in reducing some constraints on investment, including taking steps to better ensure reliable electricity, but inadequate infrastructure, limited financing instruments, bureaucratic delays, lax enforcement of labour laws, and corruption continue to hinder foreign investment.

Much of this growth continues to be driven by the ready-made garment (RMG) industry, which exported $28 billion of apparel products in FY20, and continued remittance inflows, reaching a record $18.2 billion in FY20, as per the report. 

The government actively seeks foreign investment in sectors like agri-business, textile, leather goods, light manufacturing, power and energy, electronics, light engineering, information and communications technology (ICT), plastic, healthcare, medical equipment, pharmaceutical, shipbuilding, and infrastructure. 

Bangladesh's Foreign Direct Investment (FDI) stock was $16.9 billion in 2019, with the United States being the top investing country with $3.5 billion in accumulated investments.

Bangladesh received $1.6 billion FDI in 2019. The rate of FDI inflows was only 0.53% of its GDP, one of the lowest rates in Asia, according to the US report. Capital markets in Bangladesh are still developing, and the financial sector is still highly dependent on banks.

Source: Dhaka Tribune

Image Source: Google Images

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