The Bangladesh Investment Development Authority (BIDA) has launched an FDI Heatmap to drive foreign direct investment (FDI), currently at just 0.3% of GDP.

BIDA introduced this innovative, QR code-enabled tool at a seminar titled “Investment Prospects and Challenges,” organized by the Economic Reporters’ Forum (ERF) on January 15 in Dhaka.

The Heatmap focuses on 19 priority sectors with high growth potential. These include core apparel and advanced technical textiles, which align with Bangladesh’s global strengths. Renewable energy and leather represent efforts to diversify the economy. Automotive and parts, pharmaceuticals, and plastics promise value addition and industrial expansion. Other priority areas like light engineering, footwear, and electronics aim to broaden the country’s manufacturing base.

High-tech industries, such as semiconductors, electric vehicle (EV) batteries, and application programming interfaces (APIs), highlight Bangladesh’s push toward emerging markets. Agro-processing, toys, and medical devices reflect growing domestic and international demand. Logistics and IT-enabled services (IT-ES) emphasize the role of infrastructure and technology in attracting investors.

BIDA Executive Chairman Chowdhury Ashik Mahmud Bin Harun stated that the Heatmap showcases Bangladesh’s competitive advantages. He added that regular updates will involve experts and stakeholders from major FDI source countries.

Industry Perspectives
Abdullah Hil Rakib, Managing Director of Team Group, praised BIDA’s efforts to identify key sectors for investment. He urged better collaboration between government agencies and industry leaders to improve the investment climate.

Rakib raised concerns about rising costs. He explained that proposed hikes in energy prices and labor wages could discourage investors. “Investors assess their return on investment (ROI) before committing,” he said. He also highlighted extortion in industrial zones as a barrier to doing business.

FDI Trends and Challenges
FDI in Bangladesh has declined steadily over the past three years. In 2021-2022, it reached $1.7 billion, accounting for 0.5% of GDP. It fell to $1.6 billion in 2022-2023 (0.4% of GDP) and dropped further to $1.5 billion in 2023-2024 (0.3% of GDP).

BIDA revealed that direct investment accounts for only 45% of total FDI. The remainder consists of intercompany loans or reinvestments.

By targeting sectors with strong growth potential, BIDA’s FDI Heatmap aims to reverse this trend and position Bangladesh as a competitive destination for global investors.

Source: The Business Standard