Bangladesh has taken a significant step in trade diplomacy by signing its first-ever Economic Partnership Agreement (EPA) with Japan, marking a historic milestone in bilateral relations between the two countries. The agreement comes ahead of Bangladesh’s national elections and is being viewed by experts as a timely boost for the country’s economy.
The EPA was signed in Tokyo and aims to deepen long-term cooperation between Bangladesh and Japan across trade, investment, technology transfer, services, and supply chain development. Japan is widely regarded as one of India’s closest strategic partners, adding geopolitical significance to the agreement.
Agreement Concluded in Just Four Years
By international standards, the Bangladesh–Japan EPA was concluded in a relatively short period of four years. The process began in 2022—coinciding with the 50th anniversary of diplomatic relations between the two nations—when a Joint Study Team was formed to outline a structured economic framework.
Following the submission of the team’s recommendations in December 2023, formal negotiations commenced on March 12, 2024. Seven rounds of talks were held in Dhaka and Tokyo between 2024 and 2025, covering tariff and non-tariff barriers, investment protection, trade in services, intellectual property rights, labour and environmental standards, and supply chain cooperation. The draft agreement was finalised in September 2025, and the completion of negotiations was jointly announced on December 22 by Bangladesh’s Commerce Adviser Sheikh Bashiruddin and Japan’s Foreign Minister Iwao Hori.
Duty-Free Market Access and Trade Benefits
Under the agreement, Bangladesh will receive duty-free access to Japan for 7,379 products from the first day of implementation, while Japan will enjoy duty-free access for 1,039 products in the Bangladeshi market.
Notably, Bangladesh’s key export—ready-made garments—will enter the Japanese market duty-free, a move expected to significantly enhance the sector’s global competitiveness. The agreement also includes a production transformation provision aimed at supporting value addition in the garment industry.
Services, Investment and Technology Cooperation
Both countries have made substantial commitments in the services sector. Bangladesh has agreed to open 97 service sub-sectors to Japan, while Japan will open 120 sub-sectors to Bangladesh through four different modes of service delivery. The EPA is expected to accelerate Japanese investment, promote technology transfer, and support the development of skilled human resources in Bangladesh.
Growing Trade and Investment Ties
According to data from the Bangladesh Bank, during the 2024–25 fiscal year, Bangladesh imported goods worth $1.87 billion from Japan and exported goods worth $1.41 billion to the country. Between 2020 and September 30, 2025, cumulative Japanese foreign direct investment in Bangladesh reached $469.6 million. By the end of FY2023–24, Japan’s committed loans to Bangladesh stood at $32.32 billion, of which $22.36 billion had been forgiven.
Strategic Importance Amid LDC Graduation
The Joint Study Team highlighted that Bangladesh’s upcoming graduation from least developed country (LDC) status could result in the loss of existing duty-free trade benefits. In this context, a comprehensive partnership with a major developed economy like Japan is seen as critical to sustaining export competitiveness.
Industry experts have welcomed the agreement. Mohiuddin Rubel, former director of the Garment Industry Association, said that concluding such a complex agreement with a developed nation in just four years demonstrates Bangladesh’s ability to build high-impact economic partnerships through focused negotiations and political commitment. He added that the deal strengthens Bangladesh–Japan relations and positions Bangladesh as a credible partner for similar agreements with other advanced economies.
