Last year, more than two-thirds of the outbound foreign direct investment (FDI) by Bangladeshi firms flowed into India.
According to Bangladesh Bank data, outward FDI by Bangladeshi firms has significantly increased, expanding to more than 22 host countries.
In 2023, net FDI into India amounted to $21.05 million, capturing a 70.45% share of the total. The United Arab Emirates received $8.91 million, accounting for 29.82% of the total, while Nepal received $3.52 million, an 11.78% share.
Meanwhile, net FDI outflows to the United Kingdom fell by $4.35 million and those to Hong Kong-China by $5.78 million.
Considering sector-wise investment, financial intermediaries and mining and quarrying received the lion’s share of these investments.
In 2023, net FDI outflows totalled $29.88 million, marking a decline of 43.2% year-on-year. Net FDI equity capital outflows were $10.66 million in 2023, down from $11.74 million in the previous year.
M Shoeb Chowdhury, chairman of HSTC Limited and vice president of the India-Bangladesh Chamber of Commerce and Industry, told The Business Standard, “North-eastern Indian states such as Assam, Tripura, and Meghalaya have a demand for many Bangladeshi products. As exports to these states are difficult, several companies, including PRAN, have invested there.
“They are primarily consumer goods companies. Additionally, there is some investment in this sector due to the scarcity of land for power production in our country.”
Stating that India has a favourable investment environment, Shoeb Chowdhury said the cost of doing business in India is lower than in Bangladesh. He added that due to the demand for Bangladeshi products, there are opportunities for more investment in the future. Both countries need to take steps to facilitate this.
Mentioning that outward FDI should be monitored, he noted, “We have seen that even if investments are made in many countries, whether or not returns are coming from those countries is not properly monitored.
“The government should be updated about investments in any country, including India. This will provide accurate information about investments abroad.”
Considering inward FDI, in 2023 gross FDI inflows were $3.97 billion, a decrease of $857.53 million, or 17.8%, compared to 2022.
Net FDI inflows in 2023 were $3 billion, a decrease of $475.55 million, or 13.7%, from 2022 but an increase of 3.8% from 2021.
Total FDI in Bangladesh stood at $20.55 billion at the end of 2023, recording a decrease of 5.1% from 2022.
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