Trend of FDI in Bangladesh

3.
Trend of FDI in Bangladesh: Bangladesh is considered as one of the promising and

developing countries in South Asia. After 1971, when Bangladesh had gained its desired victory
and sovereignty through the liberation war, it’s economic condition was comparatively in the
reversed form in order to attract foreign investors. Till 1980, foreign investors saw it from a
negative eye. But after that, the country got improving its overall economic condition. From the
1990s, the Bangladeshi government started to take the necessary steps to encourage more foreign
direct investment.1
3.1. Overall Trend of FDI inflows in Bangladesh: The strong resilience power of the
country gives it the strength to overcome all the barriers and disasters. Though it has still lacking
high-end technical support like the first world or developed country still comparatively low cost
of manpower, organised managerial capacity, a large number of growing manpower, satisfactory
product or service quality, efficient EPZ areas and lower manufacturing costs attract a large
amount of FDI. Besides these, Bangladesh is increasing its FDI inflow through the transfer of
technical support which is also a form of FDI, promising GDP growth rate, flexible employment
market, low tax in corporate sectors, resilient and duty-free market economy. It’s main sectors of
FDI inflows are Agriculture & Fishing, Mining and Quarrying, Power, Gas & Petroleum, Food
Products, Textiles & Wearing, Pharmaceuticals & Chemicals, Metal & Machinery Products,
Vehicle & Transport Equipment, Fertilizer, Cement, Leather & Leather Products, Construction,
Trade & Commerce, Transport, Storage & Communication, Services. The following chart and
graph contain the overall trend of FDI inflows from FY 2015 to FY 2020.
FY year FDI Inflows (Net) by component from FY

2015 to FY 2020 (in million USD)
( Overall)
2015 1833.87
2016 2003.53
2017 2454.81
2018 3613.3
2019 2873.45
2020 2370.45
Table: FDI Inflows (Net) by component from FY 2015 to FY 2020 (Source: Bnagladesh Bank
FDI inflows survey report)2.
The following graph is illustrated according to the data of the table 1.
1
. International journal of Economics and Management Science, 2012.
2
. Bnagladesh Bank FDI inflows survey report, 2020.
2015 2016 2017 2018 2019 2020
Figure1: FDI Inflows (Net) by component from FY 2015 to FY 2020
The graph shows that there was a slow and steady increasing from 2015-2017. In 2018 there was
a sharp increase but in 2019 suddenly the FDI inflows decreased and in 2020 the amount is
below the linear growth line.
3.2. FDI inflows trend in Leather and Leather Products: The leather industry in
Bangladesh came into the spotlight during British rules. The national objective of leather
industry is to become the main driver of manufacturing. After 2013 it’s become one of the main
attraction of foreign investment. Right now Bnagladesh has around 200 tanneries, 2540 of
footwear making sub industries and almost 90 leather goods processing units. The sector
contributes about 4% in the nations’ GDP. Recently 90% of finished goods are exported into 53
countries across the world. The sector has created 12.9 million employment sectors. The
following table shows the trend of FDI inflows in leather sector.
FY Year Net FDI inflows in Leather and Leather

products
2015 36.79
2016 16.35
2017 23.38
2018 60.81
2019 51.9
2020 30.15
Table 2: Net FDI inflows in Leather and Leather products (Source: Bangladesh Bank)3
Here is the graph according to the table 2.
2015 2016 2017 2018 2019 2020

Graph 2. Net FDI inflows in Leather and Leather products of FY (2015-2020).
The graph shows that there was a decline from 2015 to 2016. Though in 2017 the amount of FDI
has been increased but still it was under the linear line. But later in 2018 there was the highest
amount of FDI inflows among the 5 years. In 2019, though there was a declining period for the
leather industry but it isn’t below the linear growth line. But because of the recent pandemic
there is a remarkable decreasing in 2020.
3.2.1 Country participation of FDI trend in Leather industry: There are major 20
countries whose contribution is the highest among the other countries. The following graph
shows the comparative analysis between leather sectors vs other main sectors.
3
. Bangladesh Bank FDI economics data table, 2020.
Graph 3. Country participation. (Source: BD bank report on FDI)
According to the graph 18 countries invest in textile sector which is the highest among the other
sectors. 10 countries invest in leather sectors in 2020. It’s not a very bad figure compare to other
sectors and the recent pandemic.
But the amount of FDI is not so good in this year. The following graph shows the situation.
Graph 4: total amount of FDI in 2020 in different sectors (in million USD).
The graph portrays that the total FDI inflows amount is below the linear growth line.
1. leather industry in bangladesh - Google Search
2. Bangladesh Bank FDI economics data table, 2020.

3. International journal of Economics and Management Science, 2012.

Trend of FDI in Bangladesh

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3.

Trend of FDI in Bangladesh: Bangladesh is considered as one of the promising and

FY year FDI Inflows (Net) by component from FY

The following graph is illustrated according to the data of the table 1.

Figure1: FDI Inflows (Net) by component from FY 2015 to FY 2020

FY Year Net FDI inflows in Leather and Leather

Here is the graph according to the table 2.

2015 2016 2017 2018 2019 2020

2. Bangladesh Bank FDI economics data table, 2020.

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