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Bangladesh - Australia Trade Relations

Australia is one of the important trading partners for Bangladesh with bilateral trade of over one billion US dollar annually. Two-way export and import linkages are the key elements in bilateral relationship between Bangladesh and Australia. Although balance of trade remains slightly in favour of Australia, the two-way trade is increasing steadily. Bangladesh enjoys duty and quota free access to the Australian since July 2003 subject to the fulfilment of Rules of Origin (RoO) criteria.

Bangladesh’s export to Australia mainly consists of readymade garments, woven fabrics, knitwear, textile manufactures, home textile, leather goods and footwear, processed food, fish, jute goods etc. Major Australian export consists of wheat, vegetables, lentil and pulses, milk cream and other dairy products, cotton, fertilizers, oil seeds, primary plastic products, machinery and transport equipment, scraps and some other industrial raw materials.

The growth of Bangladesh’s export in Australia is depicted in the following table:

Bangladesh Export to Australia

Year

Volume of Export ( In US$ Million)

2009-10

110.79

2010-11

252.93

2011-12

142.02

2012-13

461.90

2013-14

479.38

2014-15 (June 2014 – April 2015)

500.89

Source: Export Promotion Bureau, Dhaka.

Australia’s volume of Export to Bangladesh (till September 2014) is shown below:

Australia’s Export to Bangladesh

Year

Volume of Export

(in US$ million)

2011

308.09

2012

302.07

2013

247.05

2014

213.61

  Source: Department of Foreign Affairs and Trade, Australia.

Trade and Investment Opportunities in Bangladesh:

Bangladesh offers an unparalleled investment climate compared to other South Asian economies. Key pointers to Bangladesh's investment climate today are highlighted below:

  1. Bangladesh is a largely homogeneous society with no major internal or external tensions and a population with great resilience in the face of adversity (e.g. natural calamities).
  2. Bangladesh has liberal democracy. The population of this country irrespective of race or religion have been living in harmony and understanding for thousands of years.
  3. Broad non-partisan political support for market oriented reform and the most investor-friendly regulatory regime in South Asia.
  4. Trainable, enthusiastic, hardworking and low-cost (even by regional standards) labor force suitable for any labour-intensive industry.
  5. The geographic location of the country is ideal for global trade, with very convenient access to international sea and air routes.
  6. Bangladesh is endowed with abundant supply of natural gas, water and its soil is very fertile.
  7. Although Bangla is the official language, English is generally used as a second language.

Bangladeshi products enjoy duty free and quota free access to almost all the developed countries. This access to the global market is further influenced by the fact that the policy regime of Bangladesh for foreign direct investment is by far the best in South Asia. Most Bangladeshi products enjoy complete duty and quota free access to EU, Canada, Australia and Norway. Though in limited scale, Bangladesh products already found their access with lower duty in the markets of Thailand, India and Pakistan. However, talks are underway with China, Russia, Malaysia and other neighbouring countries in this regard.

Export Processing Zones (EPZs) are export oriented industrial enclaves which provide the infrastructures, the facilities, administrative and support services for a wide variety of enterprises. Bangladesh’s highly successful EPZs in Dhaka and Chittagong are now complemented by new EPZ developments and other valuable real estate developments around the country. The Bangladesh Export Processing Zones Authority (BEPZA) is the official organ of the government to promote, attract and facilitate foreign investment in the Export Processing Zones. The primary objective of an EPZ is to provide special areas where potential investors would find a congenial investment climate, and location free from cumbersome procedures. Businesses from 32 countries have so far invested in the existing zones. Industrial set ups in EPZs are receiving  incentives like tax holidays, duty free import of construction materials, machineries, office equipment & spare parts , raw materials and finished goods, Relief from double taxation, 100% foreign ownership permissible, full repatriation of capital and dividend and many more.

Potential investment sectors in Bangladesh as emphasized by the government are agribusiness, ceramics, electronics, foreign foods, garment and textiles, ICT and business services, leather and leathers goods, light engineering, power industry, life science. Details on trade and investment opportunities are available at www.boi.gov.bd and www.epzbangladesh.org.bd