Trade and Investment between ROK & Bangladesh

The Republic of Korea is a pioneer country to invest in Bangladesh and ranks 6th in providing Foreign Direct Investment (FDI).  Korean FDI in Bangladesh continues to increase moderately; gross inflow peaked up to US$ 1122.86 million in December 2018.

The Republic of Korea was the first country to set up an exclusive foreign Export Processing Zone (KEPZ) in Bangladesh and is still one of the top sources of Foreign Direct Investment, especially in textile and garment sector. It is increasingly engaging itself in the infrastructure, energy, ICT and Medical equipment sectors.  More than 200 ROK companies have so far invested in Bangladesh.

 During the visit of the former Korean Premier H.E. Lee-Nak-yon in July 2019, he expressed his interest to make cluster investment in the SEZ of Bangladesh.

FDI Inflow to Bangladesh from ROK (Million US $)

 Year 

 Total FDI in Bangladesh 

 FDI from Korea 

 FDI from ROK as % of Total 

2011

1,136.38

113.06

9.95%

2012

1,292.56

97.59

7.55%

2013

1,599.16

110.96

6.94%

2014

1,551.28

132.30

8.53%

2015

2,235.39

150.23

6.72%

2016

2,332.72

151.33

6.48%

2017

2151.56

179.80 

 8.35%

2018

3613.30

 72.97

2.01% 

2019

2873.95

 38.33

 1.33%

 Source: Statistics Department, Bangladesh Bank

Bilateral trade between the two countries is growing gradually. The two-way trade between the two countries was USD 1.57 billion from USD$22.86 million in 2005. Bangladesh’s exports to the Republic of Korea was USD 370.65 million and imports USD $1.28 billion. The trade balance is consistently in favor of the Republic of Korea.

The main exporting items of Bangladesh to ROK are-Leather, Woven garments, Jute manufactures, Pharmaceuticals, Jute yarn & twine, other mfd. goods, Knitwear, Footwear (leather & sports), Stainless steel wares, frozen fish, Cap, Copper wire, and raw jute.

Major items imported from the ROK to Bangladesh are-vegetable products, Live animals, Mineral products, plastic & Articles thereof, Textile & Textile articles, Articles of stone, Machinery & mechanical appliances, Vehicles, aircraft, Optical, Photographic, Footwear, Umbrellas etc.

Bangladesh has taken initiatives to diversify its export basket with high-end and high value-added products and shown remarkable success in exporting pharmaceutical products, computer services, ship building, electrical and electronic products across the world.

Factors Contributing to the Growth of Export from Bangladesh

  • Competitiveness in terms of quality and price
  • Increasing cost of production in China and other advanced middle-income countries
  • Increasing compliance (especially in the RMG and shrimp sectors)
  • Strong backward linkages
  • Strong public-private partnership
  • High pool of young labor force with required skills

Bangladesh Export to The ROK (Million US $)

 

 

 

Year

Amount (in Million USD)

Increase/ – decrease (%)

2014-15

269.03

2015-16

280.09

4.11%

2016-17

238.23

-14.94%

2017-18

254.84

6.97%

2018-19

370.65

45.44%

2019-20

352.82

-4.81%