EU Sees Strong Investment Potential in Bangladesh, Urges Sustained Reforms

EU Highlights Untapped Investment Opportunities in Bangladesh

During a high-level dialogue on Business Climate held in Dhaka on December 1, 2025, French Ambassador to Bangladesh, Jean-Marc Séré-Charlet, affirmed that the European Union (EU) perceives strong potential for Bangladesh to attract significantly higher volumes of European investment and capital. The event, co-organized by the European Union and the Bangladesh Investment Development Authority (BIDA), served as a platform to discuss strengthening economic engagement between Europe and Bangladesh.

Ambassador Séré-Charlet underscored the importance of maintaining ongoing reforms to improve the business climate in Bangladesh. He welcomed BIDA's recent initiatives aimed at enhancing the investment ecosystem, stating that 'the key now is to sustain this reform momentum, strengthen regulatory clarity and ensure policy continuity and stability.'

Call for Deeper Reforms and Enhanced Business Environment

The dialogue brought together EU ambassadors, senior government officials, and leading European businesses, all emphasizing the need for a more predictable, transparent, and investor-friendly environment. EU Ambassador Michael Miller highlighted the importance of 'teamwork, a level playing field and impartial implementation' for a comprehensive investment partnership.

European envoys pointed to several areas requiring deeper reforms to unlock greater foreign direct investment (FDI). These include:

• Streamlining regulatory approvals and reducing delays
• Ensuring predictable regulation and policy continuity
• Strengthening regulatory clarity and enforcement of standards
• Addressing profit repatriation bottlenecks
• Improving governance and transparency
• Simplifying customs, logistics, and import procedures

These reforms are deemed crucial as Bangladesh prepares for its graduation from the Least Developed Country (LDC) category, which will necessitate attracting high-quality European investment.

EU's Commitment and Trade Dynamics

The EU has demonstrated its commitment to Bangladesh through substantial financial pledges. The bloc has committed to investing €1 billion in key sectors such as water, energy, transport, and health, with plans to potentially double this financing. Notably, agreements worth €400 million were signed for renewable energy projects, comprising a €350 million loan from the European Investment Bank (EIB) and a €45 million grant. Additionally, €70 million has been allocated for cooperation in education, decent work, green construction, e-governance, and gender-based violence prevention.

Despite being Bangladesh's largest export destination, the trade relationship with the EU currently exhibits a significant imbalance. In 2024, total goods trade amounted to €22.2 billion, with the EU registering a €17.5 billion deficit. Garments and textiles constituted nearly 94% of EU imports from Bangladesh, while EU exports primarily consisted of machinery, appliances, and chemicals. European missions are now seeking similar commitments from Bangladesh to increase imports of European goods to rebalance this trade relationship.

Future Outlook for EU-Bangladesh Economic Ties

The dialogue underscored a shared commitment to deepening economic ties. BIDA Executive Chairman Ashik Chowdhury emphasized Bangladesh's ambition to attract more European companies to establish local and regional operations, stressing the importance of structural reforms and investor grievance resolution. The EU's Global Gateway initiative is also seen as a key avenue for boosting FDI, provided that European businesses operate on a level playing field.

The collective message from European representatives is clear: sustained reform momentum, regulatory predictability, and enhanced transparency are essential for Bangladesh to fully realize its potential as a destination for European investment and to foster a more comprehensive and mutually beneficial economic partnership.