PM’s Japan Visit to Prioritise $14 Billion in Investments and Project Cost Reductions

Prime Minister Tarique Rahman’s four-day state visit to Japan, beginning on 26 October, is expected to prioritise infrastructure development, investment, trade expansion, development assistance and the export of skilled manpower.

Dhaka also plans to raise concerns over escalating costs of major Japanese-funded infrastructure projects and high loan interest rates, seeking more affordable financing for key development initiatives.

Foreign Secretary Asad Alam Siam said on Tuesday that Tarique Rahman and Japanese Prime Minister Sanae Takaichi would discuss infrastructure cooperation, technical assistance, financing and lending support during their bilateral meeting on 27 October.

“We want to obtain loans at lower interest rates from all countries,” Siam told reporters at the foreign ministry, responding to a question about the rising costs of Dhaka Metro Rail’s MRT Line-5 and Line-1 projects.

He said the outcome of discussions on project costs and interest rates would become clearer after the negotiations.

Japan has long been one of Bangladesh’s key development partners, supporting major infrastructure initiatives, including the Dhaka Metro Rail, the Matarbari port and power project, and the third terminal of Hazrat Shahjalal International Airport.

$14bn Investment Package in the Pipeline

Bangladesh is preparing a proposed $14 billion investment and cooperation package for 2026–31, targeting 12 priority sectors to attract greater Japanese investment. Some of these sectors fall under the Bay of Bengal Industrial Growth Belt (BIG-B) initiative.

The proposed package allocates $3.45 billion for transport and urban connectivity, $3.14 billion for integrated industrial, port and commercial hubs, including the Matarbari hub, and $2.22 billion for energy and climate resilience.

Another $1.57 billion is earmarked for manufacturing, semiconductors and automobiles, while $1.22 billion is intended for agriculture, the blue economy and tourism.

The visit is expected to offer Dhaka an opportunity to attract fresh Japanese investment, maintain development assistance and broaden economic cooperation beyond traditional infrastructure financing.

Three to Four MoUs Expected

Bangladesh and Japan are discussing approximately eight memorandums of understanding (MoUs), of which three or four could be signed during the visit, the foreign secretary said.

He noted that human resource development could serve as a framework for exploring multiple areas of cooperation and opening avenues for future collaboration.

The two countries are also negotiating a joint statement, with discussions expected to continue until the final stages of the visit.

The proposed agreements could cover skilled manpower, technology and other economic and development priorities. However, Siam did not confirm the final list of agreements expected to be signed.

Expanding employment opportunities for Bangladeshi workers in Japan is another potential focus of the visit. Dhaka wants to send more trained and skilled workers to help address labour shortages in Japan, where an ageing population is increasing demand for foreign workers.

The two countries signed two memorandums in May 2025 to develop skilled human resources for the Japanese labour market. A further understanding on the recruitment of Bangladeshi workers is also under discussion, although no final announcement has been made regarding a new agreement during the upcoming visit.

EPA Implementation Awaits Domestic Approval

The implementation of the Economic Partnership Agreement (EPA) between Bangladesh and Japan is expected to feature prominently in discussions as both countries seek to expand bilateral trade.

Siam said the agreement had been signed but still required the completion of necessary domestic procedures in both countries before it could take effect.

Responding to concerns that Bangladesh’s leather goods exports to Japan could decline by around 10% following the EPA’s implementation, the foreign secretary said the agreement should be evaluated comprehensively rather than through the performance of a single product category.

He acknowledged that some sectors might face disadvantages while others could benefit from the broader trade arrangement.

Once the agreement comes into force, both countries will need to assess which industries gain or lose and identify the reasons behind those outcomes, he said. If particular sectors encounter difficulties, further discussions could be held to address their concerns.

Bangladesh hopes to expand its export opportunities in Japan while attracting investment in manufacturing and other industries. Although the EPA is expected to provide a framework for deeper economic engagement, its impact on individual sectors will become clearer after implementation.

Matarbari Expansion to Support Future Trade

Addressing a question about the regional importance of the Matarbari port project, Siam said Bangladesh needed to expand its port infrastructure in line with economic growth and future import-export requirements.

He stressed the importance of ensuring sufficient port capacity to accommodate the expected growth in container traffic over the next decade.

The idea of expanding Matarbari port emerged from this requirement, he said, adding that future assessments would determine whether the available capacity adequately meets actual demand.

Japan's support for Matarbari forms part of its broader involvement in Bangladesh's infrastructure development. The port and its associated industrial facilities are also expected to strengthen trade and regional connectivity.

The proposed $14 billion investment package places significant emphasis on integrated industrial development, port infrastructure and commercial hubs, reflecting Dhaka's ambition to use infrastructure expansion to drive industrialisation and export growth.

Dhaka Seeks Broader Strategic Cooperation with Tokyo

On Bangladesh's approach to strengthening relations with Japan, Siam said Dhaka valued its relationships with all countries independently and based on national interests.

“Bangladesh does not compare its relationship with one country against its relationship with another. We do what we do in our own interests, for the needs of our people and for the welfare of our country,” he said.

Bangladesh and Japan have been exploring cooperation in trade, investment, energy security, green energy, defence, technology and human resource development.

During the seventh Bangladesh-Japan Foreign Office Consultations in Dhaka on 12 August, the two sides discussed trade, investment, energy security, green energy, defence cooperation and the EPA, according to a foreign ministry statement.

At the meeting, Japan's Senior Deputy Foreign Minister Hiroyuki Namazu conveyed an invitation from Japanese Prime Minister Sanae Takaichi for Tarique Rahman to visit Japan. Bangladesh also invited the Japanese prime minister to visit Dhaka at a mutually convenient time.

During his upcoming visit, Tarique Rahman is scheduled to hold bilateral talks with Takaichi on 27 October, meet the president of the Japan International Cooperation Agency (JICA) and address the Japan-Bangladesh Economic Forum.

The visit is expected to build on existing economic ties while expanding cooperation in investment, infrastructure, trade and human resource development beyond traditional development assistance.