Published: 08:22 AM, 06 December 2025
Bangladesh and Japan: Transitioning from a Historical Partnership to an Economic Transformation
Jaidul Karim Iram
The bilateral relationship between Japan and Bangladesh transcends diplomatic formalities and is the most extensive economic collaboration in Asia's history. As Bangladesh prepares to exit from Least Developed Countries (LDC) classification in 2026, Japan, the nation's primary development partner since 2012, functions as both the architect and guarantor of its economic transition. The inaugural signing of an Economic Partnership Agreement (EPA) between two nations transcends a mere commercial agreement; it represents a strategic alignment that positions Bangladesh within Japan's regional economic framework in the Indo-Pacific.
Historical Context of the Bangladesh Japan Economic Relation
The foundation of Japan-Bangladesh friendship lies in the International Military Tribunal for the Far East (1946-48), also known as the Tokyo Trials. Justice Radhabinod Pal, a Bengali jurist who previously presided over the Tokyo Trials and served as an ad hoc judge on the International Court of Justice, dissented in an extensive opinion exceeding 1,230 pages. He criticized not only specific charges or defendants but also the legitimacy of the trial itself, contending that "the prosecution's theories were ex post facto law at its worst" and were based on concepts appropriated from Western nations, representing "victor's justice" rather than authentic international common law. Despite his dissents failing to overturn convictions, Justice Pal's sincerity earned him reverence in Japan: The Yasukuni Shrine constructed memorials in his honour, and he is so esteemed that Japanese nationalists celebrate him as a hero who, in death, blesses the populist administration. Amidst this context, the tradition of mutual respect, distinctive to Japan–Bangladesh relations and lacking in several regional relationships marred by historical conflicts, has begun to flourish.
Official Development Assistance: The Framework of Collaboration
Since the establishment of formal diplomatic relations in 1972, Japan has become a crucial contributor to Bangladesh's development. Japan has committed approximately $32 billion, including 2.4 trillion Japanese Yen, through the Japan International Cooperation Agency (JICA). In FY 2022, JICA committed 331 billion Japanese Yen to five major projects, with disbursements totalling 261 billion Japanese Yen, marking the second-highest levels of commitment and disbursement for Overseas Development Assistance (ODA) since its inception in 1974. These figures surpass conventional development assistance; they represent a strategic initiative to position Bangladesh as a booming market and a counterbalance to China's expanding influence in South Asia.
Transformative Megaprojects: A Tangible Testament
Japan is allocating more than $3.5 billion in funding for multiple MRT lines, including $1.4 billion for MRT Line-5 through concessional ODA loans with an interest rate of 0.7%. Upon completion, the system is anticipated to accommodate approximately 2.4 million passengers daily, alleviating persistent traffic congestion and air pollution.
Jamuna-2 Railway Bridge and Matarbari Deep Sea Port
The Jamuna dedicated railway bridge, measuring 4.8 kilometers, has secured the largest combined loan of 128,697 million yen to link the eastern and western railway zones in Bangladesh. The “Matarbari Deep Seaport”, financed by JICA for 712,430 million Yens, can accommodate mother container vessels with a draft of up to 16 meters. These projects are essential infrastructural initiatives within the Bay of Bengal Industrial Growth Belt (BIG-B) programme.
Institutional Framework for post LDC competitiveness
Following almost a decade of discussions initiated by the joint feasibility study in 2015, significant consensus on the EPA was achieved over a 10-day negotiating round in Tokyo from September 3 to 12, 2025. The urgency arises from Bangladesh's impending graduation from Least Developed Countries (LDC) status, which will result in tariffs exceeding 18% on key exports such as garments, textiles, and leather, currently benefiting from duty-free access. The EPA ensures preferential access and positions Bangladesh inside Japan's global value chain. The deal will encompass services, investor protection, intellectual property, and economic cooperation, extending beyond conventional tariff liberalization. Former Japanese Prime Minister Shigeru Ishiba unequivocally declared that Japan would implement the EPA by the end of this year, asserting that the agreement serves as "a foundational framework for a new era" in relations between the two nations.
Trade Dynamics: Enhancing Market Integration
Bilateral commerce reached $3.12 billion in the 2023–24 fiscal year, with Bangladesh exporting commodities valued at $1.31 billion (mostly ready-made textiles, jute, and leather) to India and importing goods worth approximately $1.81 billion from the neighbouring nation. Significantly, Bangladesh's garment exports to Japan reached $1.18 billion in FY24-25, reflecting a 15.61% year-on-year growth. In contrast, Japan's apparel imports in 2024 amounted to $22.86 billion, with Bangladesh's contribution being merely $1.26 billion (about 5.5 percent), indicating significant untapped growth potential. Japan's proportion of apparel imports from China has declined from over 55% at the end of 2022 to approximately 46.88% in early 2025, as Japanese firms use "China plus one" sourcing strategies, with Bangladesh poised to gain more than Vietnam.
Labour Migration: Demographic Complementarity
Japan faces a significant demographic crisis among affluent nations, requiring approximately 11 million foreign workers by 2040. Simultaneously, Bangladesh possesses a demographic dividend; for example, Japanese corporations and officials have indicated their intention to import at least 100,000 skilled labourers from Bangladesh over five years. This was concluded by Memoranda of Understanding executed between Bangladesh's Bureau of Manpower, Employment and Training (BMET) and Kaicom Dream Street, as well as Japan's National Business Support Combined Cooperatives (NBCC) and Japan Bangla Bridge Recruiting Agency (JBBRA). The recruitment of workers has substantial ramifications for remittances, amounting to approximately $2 billion annually, which is similar to the total earnings of Bangladesh's ICT export business.
Historical Context of the Bangladesh Japan Economic Relation
The foundation of Japan-Bangladesh friendship lies in the International Military Tribunal for the Far East (1946-48), also known as the Tokyo Trials. Justice Radhabinod Pal, a Bengali jurist who previously presided over the Tokyo Trials and served as an ad hoc judge on the International Court of Justice, dissented in an extensive opinion exceeding 1,230 pages. He criticized not only specific charges or defendants but also the legitimacy of the trial itself, contending that "the prosecution's theories were ex post facto law at its worst" and were based on concepts appropriated from Western nations, representing "victor's justice" rather than authentic international common law. Despite his dissents failing to overturn convictions, Justice Pal's sincerity earned him reverence in Japan: The Yasukuni Shrine constructed memorials in his honour, and he is so esteemed that Japanese nationalists celebrate him as a hero who, in death, blesses the populist administration. Amidst this context, the tradition of mutual respect, distinctive to Japan–Bangladesh relations and lacking in several regional relationships marred by historical conflicts, has begun to flourish.
Official Development Assistance: The Framework of Collaboration
Since the establishment of formal diplomatic relations in 1972, Japan has become a crucial contributor to Bangladesh's development. Japan has committed approximately $32 billion, including 2.4 trillion Japanese Yen, through the Japan International Cooperation Agency (JICA). In FY 2022, JICA committed 331 billion Japanese Yen to five major projects, with disbursements totalling 261 billion Japanese Yen, marking the second-highest levels of commitment and disbursement for Overseas Development Assistance (ODA) since its inception in 1974. These figures surpass conventional development assistance; they represent a strategic initiative to position Bangladesh as a booming market and a counterbalance to China's expanding influence in South Asia.
Transformative Megaprojects: A Tangible Testament
Japan is allocating more than $3.5 billion in funding for multiple MRT lines, including $1.4 billion for MRT Line-5 through concessional ODA loans with an interest rate of 0.7%. Upon completion, the system is anticipated to accommodate approximately 2.4 million passengers daily, alleviating persistent traffic congestion and air pollution.
Jamuna-2 Railway Bridge and Matarbari Deep Sea Port
The Jamuna dedicated railway bridge, measuring 4.8 kilometers, has secured the largest combined loan of 128,697 million yen to link the eastern and western railway zones in Bangladesh. The “Matarbari Deep Seaport”, financed by JICA for 712,430 million Yens, can accommodate mother container vessels with a draft of up to 16 meters. These projects are essential infrastructural initiatives within the Bay of Bengal Industrial Growth Belt (BIG-B) programme.
Institutional Framework for post LDC competitiveness
Following almost a decade of discussions initiated by the joint feasibility study in 2015, significant consensus on the EPA was achieved over a 10-day negotiating round in Tokyo from September 3 to 12, 2025. The urgency arises from Bangladesh's impending graduation from Least Developed Countries (LDC) status, which will result in tariffs exceeding 18% on key exports such as garments, textiles, and leather, currently benefiting from duty-free access. The EPA ensures preferential access and positions Bangladesh inside Japan's global value chain. The deal will encompass services, investor protection, intellectual property, and economic cooperation, extending beyond conventional tariff liberalization. Former Japanese Prime Minister Shigeru Ishiba unequivocally declared that Japan would implement the EPA by the end of this year, asserting that the agreement serves as "a foundational framework for a new era" in relations between the two nations.
Trade Dynamics: Enhancing Market Integration
Bilateral commerce reached $3.12 billion in the 2023–24 fiscal year, with Bangladesh exporting commodities valued at $1.31 billion (mostly ready-made textiles, jute, and leather) to India and importing goods worth approximately $1.81 billion from the neighbouring nation. Significantly, Bangladesh's garment exports to Japan reached $1.18 billion in FY24-25, reflecting a 15.61% year-on-year growth. In contrast, Japan's apparel imports in 2024 amounted to $22.86 billion, with Bangladesh's contribution being merely $1.26 billion (about 5.5 percent), indicating significant untapped growth potential. Japan's proportion of apparel imports from China has declined from over 55% at the end of 2022 to approximately 46.88% in early 2025, as Japanese firms use "China plus one" sourcing strategies, with Bangladesh poised to gain more than Vietnam.
Labour Migration: Demographic Complementarity
Japan faces a significant demographic crisis among affluent nations, requiring approximately 11 million foreign workers by 2040. Simultaneously, Bangladesh possesses a demographic dividend; for example, Japanese corporations and officials have indicated their intention to import at least 100,000 skilled labourers from Bangladesh over five years. This was concluded by Memoranda of Understanding executed between Bangladesh's Bureau of Manpower, Employment and Training (BMET) and Kaicom Dream Street, as well as Japan's National Business Support Combined Cooperatives (NBCC) and Japan Bangla Bridge Recruiting Agency (JBBRA). The recruitment of workers has substantial ramifications for remittances, amounting to approximately $2 billion annually, which is similar to the total earnings of Bangladesh's ICT export business.
Opportunities for Strategic Investment
Japan has thus far invested $507 million in Bangladesh, focusing on energy, textiles, fertilisers, and infrastructure; however, the potential for additional investment is substantial. The Japanese Economic Zone in Araihazar seeks to attract $1 billion in investments from approximately 100 Japanese companies, generating over 100,000 jobs. Sino-Japanese investment in Special Economic Zones, Information and Communication Technology, and shipbuilding has multiplier effects on Bangladesh's industrial development.
Support During COVID-19 Pandemic
During the months of July and August 2021, the Government of Japan pledged to allocate roughly three million doses of the AstraZeneca vaccine to Bangladesh through the COVAX Facility to meet the pressing needs of the Bangladeshi population, which has been awaiting the AstraZeneca vaccine for a prolonged period. The Government of Japan has decided to provide an additional 1.5 million vaccines to the Bangladeshi population, acknowledging the persistent immunisation requirements in Bangladesh and the substantial bilateral relationship between Bangladesh and Japan.
The current government of Bangladesh should establish a Joint Working Committee (JWC) roundtable to meet regularly and enhance coordination on infrastructure investment and development. Within the regulatory reform, it is a prerequisite for accelerating customs and licensing processes to enhance investment appeal through digitalization. The government authority must also ensure the operational sustainability of JICA's sponsored projects through established maintenance entities. In the areas of diversification, the government must emphasise pharmaceutical production, food processing, and boosting skill development. Regarding the Human Resource Development, we can increase the number of Technical Training Centres nationwide to hire skilled transport workers from Bangladesh.
The Japan-EPA and the enhanced labour migration accords are not isolated measures as LDCs transition; instead, they represent systemic transformations. Japan's overall development commitment has reached $32 billion, and Chief Advisor Professor Dr. Muhammad Yunus has announced plans to accommodate 100,000 Bangladeshi workers, positioning both nations favourably within the evolving dynamics of the Indo-Pacific region. Bangladesh's strategic aim is evident: effective administration and exceptional infrastructure; for Japan, it seeks dependable, democratically and diverse investment opportunities. The forthcoming five years will determine if this cooperation realizes its transformative potential, fostering mutual prosperity through institutional commitment and strategic alignment.
Jaidul Karim Iram is Executive Officer at
People’s University of Bangladesh, Dhaka.
