Bangladesh Bank report: Dhaka's exports to SAARC countries remain low, while imports continue to rise

Bangladesh Bank Report: Limited Trade and Investment with SAARC Nations

The South Asian Association for Regional Cooperation (SAARC) has the lowest level of intra-regional trade among global trade alliances. Political complexities have hindered cross-border trade among SAARC nations, preventing it from reaching its full potential.

Similarly, Bangladesh's trade with SAARC countries remains limited. According to the latest report from Bangladesh Bank, in the 2023-24 fiscal year, Bangladesh's export earnings from SAARC nations accounted for only 4.47% of its total exports, while imports from the region made up 15.44% of its total import payments. However, imports from SAARC countries have declined since the 2021-23 fiscal period.

The central bank recently published the report titled "A Report on Export Receipts, Import Payments, Remittances Inflow, and Foreign Direct Investment Net Inflow of Bangladesh with SAARC Countries", which revealed that Bangladesh’s export earnings from SAARC nations stood at over USD 1.74 billion, while import payments reached over USD 9.76 billion. Overall, SAARC countries engage in only 5% of their total trade within the region, making South Asia the least integrated region globally.

India: The Dominant Trade Partner
Among SAARC countries, India remains Bangladesh’s largest trade partner, accounting for nearly 90% of its exports and 92.19% of its import payments.

In the 2023-24 fiscal year, Bangladesh’s export earnings from SAARC countries were as follows:

• India: USD 1.56 billion
• Pakistan: USD 62.1 million
• Sri Lanka: USD 55 million
• Nepal: USD 43.3 million
• Afghanistan: USD 14.2 million
• Bhutan: USD 9.1 million
• Maldives: USD 4.1 million

Bangladesh primarily exports textiles, chemicals, plastic, rubber, footwear, mineral products, and machinery to SAARC nations, with India being the primary destination for many of these goods.

Imports from SAARC Countries
In the 2023-24 fiscal year, Bangladesh’s import payments to SAARC nations were:

• India: USD 9 billion
• Bhutan: USD 40 million
• Afghanistan: USD 11.9 million
• Pakistan: USD 630 million
• Nepal: USD 4.23 million
• Maldives: USD 3.5 million
• Sri Lanka: USD 75.9 million

Remittances and Foreign Direct Investment (FDI)
Bangladesh receives minimal remittances from SAARC nations, contributing less than 1% of total remittance inflows. In the 2023-24 fiscal year, out of Bangladesh’s total remittance inflow of USD 2.39 billion, only USD 82.98 million came from SAARC countries. The Maldives contributed the highest share (68.6%), followed by India (23.1%).

Regarding Foreign Direct Investment (FDI), SAARC countries contributed only 16.2% of Bangladesh’s total FDI inflow in the 2023-24 fiscal year, amounting to approximately USD 240 million out of a total USD 1.47 billion.

The report suggests that shifting trade policies, economic conditions, and geopolitical factors have influenced Bangladesh’s trade and investment trends with SAARC nations.