India's real GDP growth for the next fiscal (2026-27) could erode by around one percentage point, while retail inflation could rise by about 1.5 percentage points from their baseline estimates if the West Asia conflict persists through the next fiscal, consultancy firm Ernst & Young report said.

The EY Economy Watch report said several sectors, including employment-intensive sectors like textiles, paints, chemicals, fertilisers and cement could be directly impacted.

Any reduction in employment or incomes in these sectors may further dampen aggregate demand. As a result, both supply and demand conditions may be adversely affected by global oil market disturbances, the report added.

It said the Indian economy, which imports nearly 90% of its crude oil requirements, is also highly dependent on imports of natural gas and fertilisers and is particularly vulnerable to such external shocks, with the adverse effects likely to cascade across multiple sectors through strong forward and backward linkages with crude oil and energy.

EY, in its February report, projected India's GDP could be between 6.8% and 7.2% in the 2026-27 fiscal.

The Indian government has already set up a Rs1 lakh crore economic stabilisation fund to act as a financial cushion against global headwinds.

Bangladesh's apparel exports to the European market could face a carbon tax of about 5% if emissions are not reduced, a new study warns.

The European Union (EU), Bangladesh's largest export market, has introduced the Carbon Border Adjustment Mechanism (CBAM) to curb emissions across its supply chains. Apparel products could be brought under this mechanism by 2030.

If current emission levels in Bangladesh's garment sector persist, an additional 4.8% carbon tax may be imposed on apparel exports after 2030, according to the study.

The findings come from joint research by Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), and Mohammad Imraj Kabir. The report was published on the CPD website on 29 March.

This additional tax may come at a time when Bangladesh is set to lose its duty-free trade benefits in the EU market due to graduation from least developed country (LDC) status.

The study notes that the loss of duty-free access could result in an average tariff of about 12%, and with the added carbon tax of 4.8%, the total tariff burden could rise to nearly 17%.

"The carbon tax on Bangladesh's exports of apparel to the EU, using the EU-CBAM methodology, is estimated to be 4.8%," the report titled "EU Carbon Tax: Possible Implications for Bangladesh's Apparel Export" states.

"If the average EU-MFN import duty on apparel is taken to be 12.1%, the total import tariff comes to about 16.9% (12.1%+4.8%)," it adds.

This scenario could emerge after Bangladesh graduates from the LDC group in November 2026. Even if the EU extends duty-free access until 2029, the apparel sector could still face a 4.8% CBAM tax during 2026–2029 if apparel is included in the mechanism.

Professor Mustafizur Rahman told TBS, "We estimated this based on the level of carbon emissions in Bangladesh's apparel sector."

However, industry leaders are not overly concerned. They say many factories have already begun adopting environmentally friendly production processes, including renewable energy, to reduce emissions, and others are expected to follow.

Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told TBS, "We have already started preparing to use 30% renewable energy in line with EU requirements. Many of our factories have begun implementing green practices, including renewable energy."

He added that smaller and medium-sized factories are also being supported to meet these requirements in collaboration with the government.

Bangladesh has one of the highest numbers of green-certified factories by the US Green Building Council (USGBC), with nearly 300 such facilities.

However, Mustafizur Rahman noted that existing green factories do not fully meet all EU requirements, though this still represents significant progress.

The EU introduced CBAM in July 2021 to encourage exporters to reduce emissions and penalise those who do not. Initially, it applies to products such as cement, fertiliser and steel from January 2026. However, the EU plans to eventually include all imported goods by 2030.

Given that apparel accounts for more than four-fifths of Bangladesh's exports – and the EU takes more than half of those exports – this development is highly significant for the country.

Need to prioritise clean energy

The report stresses that Bangladesh must increase the use of clean energy in production to avoid potential carbon taxes in the EU market. It recommends a range of policy measures, including incentives for adopting green technologies.

Suggested steps include fiscal incentives such as reduced import duties on energy-efficient technologies, financial support like subsidised loans for setting up ETPs, and institutional measures such as enforcing emission-reduction policies and building technical capacity.

Other recommendations include developing a monitoring mechanism for CBAM, engaging with the World Trade Organization (WTO), introducing a domestic carbon pricing system, strengthening renewable energy policies, and ensuring that CBAM is not used as a protectionist trade tool.

The government is considering a strategic diesel allocation plan for the ready-made garment sector based on recommendations from trade bodies to ensure factory generators remain operational during periods of load-shedding.

The move comes amid a worsening global energy crisis triggered by the Iran war, which has driven up fuel and LNG prices and disrupted supply chains. Iran's move to halt tanker traffic through the Strait of Hormuz has further tightened global supply.

According to officials and industry sources, the proposed mechanism will allow factories to receive diesel strictly in line with certified daily requirements provided by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

Both organisations have already begun collecting data from member factories on generator capacity and fuel demand. In a letter issued on Sunday, the BGMEA asked its members to submit details of generator usage, capacity and diesel requirements by 2 April, while the BKMEA issued a similar request.

BGMEA President Mahmud Hasan Khan said factories rely on standby generators during power outages, which require a steady diesel supply. He noted that discussions with the government are under way to ensure equitable fuel distribution during the ongoing global crisis.

He added that, under an initial plan, diesel allocation would be based on the amount required to run generators for up to four hours a day, as extended load-shedding beyond that duration is not anticipated.

BKMEA President Mohammad Hatem said the association is gathering daily fuel demand data from its members and will issue certifications accordingly. He added that a meeting with the power and energy minister was scheduled for late yesterday to finalise the arrangement.

BKMEA Executive President Fazlee Shamim Ehsan said discussions have already taken place with the energy minister and local administrators in Narayanganj and Gazipur, with positive responses.

He expressed hope that fuel supply based on organisational recommendations would begin soon, depending on the evolving situation.

Under the proposed system, factories will be allowed to collect diesel once daily from nearby filling stations, which will supply fuel upon verification of BGMEA or BKMEA certification, sources said.

Data from the Bangladesh Petroleum Corporation indicate that the country consumes around 13,000 to 14,000 tonnes of diesel per day, with about 5% used by industrial factories. The bulk of diesel is consumed in transport, irrigation and power generation.

Bangladesh, which is heavily dependent on fuel imports from Middle Eastern countries such as Saudi Arabia and the United Arab Emirates, has not received crude oil shipments since the war started.

Imports of refined fuel and LNG – primarily sourced from countries including Qatar and Oman – have also been affected, with LNG prices nearly doubling.

Diesel remains critical for transport, agriculture, power generation and industrial operations, while LNG is widely used in electricity production and factory boilers. The ongoing global shortage has already begun to affect domestic supply, with consumers facing difficulties in obtaining fuel in line with demand, industry insiders said.

A rapid expansion of solar energy is essential to protect Bangladesh from escalating global fuel price shocks triggered by the Iran war, according to a new study.

The report by Lion City Advisory highlights how surging global energy prices have intensified pressure on Bangladesh's already strained power sector, exposing its heavy dependence on imported fossil fuels.

Within just four weeks, Brent crude prices jumped from $67 to over $100 per barrel, while liquefied natural gas (LNG) prices surged from $10 to $22.51 per MMBtu, the report noted.

As a result, Bangladesh's monthly import bill for oil, LNG and coal has increased by an estimated $760-830 million, with LNG alone adding $363-400 million in additional monthly costs.

Analysts warn that if elevated prices persist for more than six months, the country could face significant fiscal strain due to rising subsidy requirements.

Despite installed power capacity jumping from 5,245MW in 2005-06 to 28,919MW in 2026, around 63% of capacity remains idle. Yet, the government continues to pay around Tk38,000 crore annually in capacity payments – largely to oil-based plants – compounding financial stress.

With almost 87% of electricity still generated from fossil fuels, Bangladesh remains highly exposed to global commodity volatility.

Solar seen as fastest shield

The study identifies solar energy as the quickest and most scalable way to reduce this exposure, recommending nationwide adoption of Solar Home Systems (SHS), particularly in urban areas.

In Dhaka alone, nearly 3.5 million households rely on diesel generators, costing an estimated $530 million annually. Mandatory SHS adoption could significantly cut these expenses while reducing fuel imports and easing pressure on the national grid.

Rooftop solar also presents a major opportunity. Although the current installed capacity stands at around 245MW, the report suggests this could expand rapidly if policy barriers are removed.

"Solar is not just a climate solution – it is now a fiscal necessity," the report states, emphasising that solar power eliminates dependence on imported fuels and shields the economy from global price shocks.

Unlocking investment through policy reform

A key bottleneck remains the suspension of Implementation Agreements (IAs) for new solar independent power producers (IPPs), which has stalled more than 5,200 MW of planned projects.

Without IA-backed guarantees, developers cannot secure financing from global lenders such as the International Finance Corporation, the Asian Development Bank, and the Japan International Cooperation Agency.

The report urges immediate reinstatement of IAs for projects above 50MW, with fiscal safeguards. Unlike conventional IPPs, solar projects operate on an energy-payment model – meaning the government pays only for electricity actually generated, avoiding the costly capacity payments that currently burden the system.

Tariffs offered by solar developers – around $0.08/kWh – are described as globally competitive and cheaper than oil-based generation.

Cutting costs at source

Beyond solar expansion, the report outlines immediate steps to reduce system costs.

One major recommendation is the removal of import duties on solar equipment, currently ranging from 14-28%, which could lower project costs by up to 20%.

It also calls for simplifying net metering approvals – currently taking up to 90 days – through a 30-day automatic approval mechanism, alongside penalties for utility delays.

At the same time, renegotiating and gradually retiring expensive HFO and diesel-based plants could save around Tk18,000 crore annually, with funds redirected toward renewable energy investments.

Efficiency gains and gas supply concerns

Industrial energy efficiency is identified as another immediate opportunity. Waste heat recovery systems in factories could save around 50 billion cubic feet of gas annually – equivalent to $1.13 billion in LNG imports at current prices.

Describing this as "effectively free LNG," the report says such measures can provide short-term relief while renewable capacity is expanded.

The study also notes a decline in domestic gas production – from around 2,700 MMcfd in 2018 to 1,700 MMcfd in 2026 – urging an emergency drilling programme by Bangladesh Petroleum Exploration and Production Company Limited to accelerate the completion of 34 planned wells.

However, it cautions that gas alone cannot resolve the crisis and recommends prioritising domestic gas for high-value sectors such as fertiliser, while shifting power generation towards solar energy.

Long-term resilience

The report proposes allocating 50,000 acres of marginal land for solar parks and expanding solar irrigation to replace almost 1.5 million diesel pumps that currently consume around $1.5 billion annually.

It also calls for reforms in green financing, including simplifying Bangladesh Bank's approval process to enable faster, low-cost funding for renewable projects.

Underlying all recommendations is a clear message: Bangladesh must move away from a fuel-import-driven power system toward one based on domestic, renewable energy.

"The current crisis is a warning," the report concludes. "Solar energy, backed by policy reform and investment certainty, offers Bangladesh the most viable path to reduce price exposure, stabilise subsidies, and secure long-term energy independence."

Bangladesh secured higher foreign loan commitments in the first eight months of the current fiscal year, yet actual disbursement fell by 26 percent compared with the same period last year, raising concerns about the country’s ability to use external funds effectively.

Between the July-February period, foreign loan disbursement dropped to $3.05 billion, down from $4.13 billion a year earlier, according to data released by the Economic Relations Division (ERD) yesterday.

The decline was driven largely by slower project aid, the primary channel for financing infrastructure and development projects.

Disbursement under project assistance fell to just above $3 billion in the first eight months of this fiscal year, compared with over $4.1 billion during the same period last year.

This slowdown comes despite nearly $40 billion in financing commitments from foreign lenders.

Analysts say the widening gap between pledged funds and actual disbursement reflects Bangladesh’s limited capacity to use external resources on time.

Foreign aid is crucial for roads, power plants, and social sector projects, but delays can reduce project benefits and increase costs.

The trend is particularly concerning as Bangladesh’s external debt servicing rises. During the July-February period, the country paid $2.9 billion in principal and interest, up from $2.63 billion a year earlier.

Deen Islam, professor of economics at Dhaka University, said the figures indicate a gradual shift from development financing to debt rollover.

“When a large portion of new external borrowing is used to service existing debt rather than finance productive investment, the net inflow of resources into the economy declines,” he said.

“Infrastructure and development spending may slow, while rising debt servicing puts additional pressure on foreign exchange reserves and the exchange rate,” Islam said.

He added that the situation could also fuel imported inflation. While not yet a crisis, he described it as a “warning sign”.

“If this trend persists, policymakers will face difficult trade-offs between taking on more debt and reallocating domestic resources away from development spending,” he said.

Meanwhile, Monzur Hossain, member (secretary) of the General Economics Division (GED) under the Planning Commission, said, “Loan disbursement is directly tied to project progress. When implementation slows, disbursement inevitably falls.”

He pointed to structural bottlenecks, particularly in investment projects.

“Many projects involve complex conditions, and meeting those requirements takes time. Land acquisition remains a major challenge in many cases,” Hossain said.

He also noted weaknesses in the execution of the Annual Development Programme (ADP) as a key factor. “Since most of these loans are linked to ADP projects, delays in overall project execution translate into slower disbursement,” he added.

During the period of the interim government, many projects were almost stagnant. However, Hossain expressed optimism about improvement in the coming months.

“Now, with a political government in place, monitoring has increased, projects are being prioritised, and delays are being scrutinised more closely,” he said.

“I expect the situation to improve soon, particularly in the final months of the fiscal year as measures taken by the Planning Commission begin to take effect,” he added.

The 14th Ministerial Conference (MC14) of the World Trade Organization (WTO) concluded early yesterday with no significant agreements, except promises to continue working towards consensus on disputed issues among member countries.

The four-day conference, which began on March 26, saw nearly 2,000 officials, including more than 90 ministers, debate key topics such as the moratorium on customs duties for electronic transmissions and broader WTO reform.

Originally scheduled to end on Sunday, the meeting stretched past midnight as ministers tried to bridge gaps on major issues.

DEADLOCK ON E-COMMERCE MORATORIUM

The WTO’s moratorium on customs duties for electronic transmissions expired yesterday after nearly three decades. Negotiations in Yaoundé continued late into the night but concluded without a final agreement.

Diplomats worked to reconcile differences between Brazil, which initially sought a two-year extension and later proposed a four-year extension with a mid-term review, and the United States, which pushed for a permanent moratorium to protect major companies such as Amazon and Apple from digital taxation.

A draft proposal for a four-year extension with a one-year sunset buffer, extending the moratorium to 2031, was also discussed but not agreed upon, reports Reuters.

Developing countries, including India, opposed a lengthy extension, arguing that the moratorium denies them potential tax revenue that could be reinvested domestically. Some 66 nations, however, agreed to an interim arrangement pending ratification.

WTO Director-General Ngozi Okonjo-Iweala said, “The e-commerce moratorium had expired, meaning countries could apply duties on electronic goods such as digital downloads and streaming. But we hope to be able to restore the moratorium and Brazil and the US were trying to reach agreement on it. They need more time and we didn’t have the time here.”

Cameroon Trade Minister Luc Magloire Mbarga Atangana, chair of MC14, added that WTO talks would continue in Geneva, expected in May.

Britain’s Business and Trade Secretary Peter Kyle called the failure to reach a collective decision in Yaoundé a “major setback for global trade.”

REFORM TALKS MAKE PARTIAL PROGRESS

Ministers and delegates made some progress drafting a plan for broader WTO reform, though no final agreements were reached, reports AFP. They were tasked with creating an action plan to revitalise the organisation, weakened by geopolitical tensions, stalled negotiations, and rising protectionism.

A draft reform roadmap outlining timelines and key issues, seen by Reuters, was close to agreement before the talks ended. Completion of any reform deal, however, will depend on resolving recurring issues, such as improving consensus-based decision-making and extending trade benefits to developing countries. Ministers also fell short of expectations on agriculture and other areas.

Ngozi Okonjo-Iweala welcomed progress in discussions on WTO reform, fisheries subsidies, and other issues.

KEY OUTCOMES

The WTO announced that ministers agreed to continue negotiations on fisheries subsidies, aiming to present recommendations at the 15th Ministerial Conference for comprehensive rules.

Two decisions were also adopted that had been previously endorsed in Geneva: improving the integration of small economies into the multilateral trading system, and enhancing the implementation of special and differential treatment provisions under the Sanitary and Phytosanitary Measures (SPS) and Technical Barriers to Trade (TBT) agreements.

The WTO director-general confirmed that members would return to Geneva with drafts of the Yaoundé Ministerial Declaration on WTO Reform and Work Plan, the Ministerial Decision on Electronic Commerce, the Ministerial Decision on TRIPS Non-Violation and Situation Complaints, and the LDC package.

As energy stress spreads across Southeast Asia, governments across the region are asking China to deliver on its pledges of closer energy security cooperation by freeing up now-banned exports ​of fertiliser and fuel.

But so far China has offered only vague statements and has yet to even publicly acknowledge the export bans reported by Reuters and others as it focuses ‌on insulating its own economy from the war in Iran.

Analysts don’t expect that to change, pointing to the tension between China’s stated ambition to be a bigger player in regional affairs and the realpolitik of its commitment to keep its own economy outpacing global growth.

China is the world’s second largest fertiliser exporter and also a large supplier of fuel. For many countries in Asia including Bangladesh, the Philippines and even Australia, Chinese imports are a major source of supply, now cut off by its export bans.

Dhaka earlier this month asked China to honour existing fuel contracts, while Thai diplomats will engage Chinese counterparts to keep fertiliser shipments from China flowing if needed, officials in Bangkok said.

In Malaysia, officials said last week the Chinese export ban would worsen fertiliser rationing, including in its oil palm industry, the world’s second-largest, and add a further blow on top of the war in Iran.

Even the Philippines has sought assistance despite the two countries’ disputes over the South China Sea.

On March 17, the Philippines minister of agriculture visited China’s embassy in Manila and said China had agreed to continue fertiliser shipments. Beijing’s one-sentence readout said only that they had discussed agriculture.

The same day Australia, which imported a ​third of its jet fuel from China last year, said it was discussing jet fuel exports with Beijing.

“China may offer some ceremonial assistance, but it’s highly unlikely, if not wholly improbable, that it will share any substantive amount of its food, energy, or other reserves with other countries,” said Eric Olander, co-founder of the China-Global South Project.

In addition, we’re talking about the impact of the war in the Middle East.

In fact, analysts said Chinese policymakers were likely quietly congratulating themselves on the strategic foresight to begin stockpiling since the early 2000s, a policy that may have seemed excessive in peacetime but now looks decidedly practical.

People’s Daily, the Communist Party’s flagship newspaper, trumpeted China’s relative energy security in an editorial earlier this month ​and said the country’s foresight meant China held the “energy lifeline” in its own hands.

China’s Ministry of Foreign Affairs did not immediately respond to questions from Reuters.

‘A TRIED AND TESTED PLAYBOOK’

China’s flagship Belt and Road infrastructure initiative ‌has seen world leaders regularly congregate in Beijing to discuss ‘win-win’ cooperation but with the region now short on fuel and fertiliser, Southeast Asian capitals are instead looking for replacements from the likes of Russia.

“China won’t want to create expectations it can’t sustain. Beijing has no desire to be a regional energy backstop for an indefinite period of disruption,” according to Ruby Osman, a senior policy adviser at the Tony Blair Institute for Global Change.

Beijing will likely stick to its tried-and-tested playbook: imposing sharp, broad curbs on energy and energy-related exports before selectively resuming trade once officials are confident domestic demand can be met, she said.

Famine and ​scarcity remain deeply embedded in China’s political consciousness, ​with the trauma of Mao Zedong’s Great Leap Forward and Cultural Revolution still close enough to remember.

“Only if China gets more comfortable with its own exposure, then I would expect meaningful support,” said Max Zenglein, senior economist at the Conference Board Asia. “I expect any support will be very transactional. Not a good position to be in if ​you are one those countries, unfortunately.”

Wang Jin, a senior fellow at the Beijing Club for International Dialogue, a think tank under China’s foreign ministry, said Beijing could also benefit if the shock pushes trading partners to accelerate investment in green and nuclear energy, sectors where China leads after years of state-backed investment.

What is more, with no major aid donor such as Japan, or regional rival, stepping in to plug shortages, China faces little pressure to do so itself, analysts said.

Olander compared the situation to the Covid-19 pandemic, when officials across the region looked to India as Asia’s main source of ⁠vaccines, only for New Delhi to halt exports as infections surged at home.

Osman said China’s partners seeking concessions would do well to remind Beijing of its own commitments.

“Maybe the key is just to quote this new bit of the five-year plan back to Beijing: ‘strengthen international cooperation in food, energy, data, biological and sea passage security, counter-terrorism and other fields.”

Oil prices extended gains on Monday, with ​Brent headed for a record monthly rise, after Yemeni Houthis launched their first attacks on Israel over the ‌weekend, widening the US-Israel war with Iran in the Middle East.

Brent crude futures jumped $3.94, or 3.5 percent, to $116.51 a barrel at 0703 GMT after settling 4.2 percent higher on Friday.

US West Texas Intermediate was at $102.14 a barrel, up $1.86, or 1.87 percent, following a 5.5 percent gain in the previous session.

“The market has all but discounted the prospect of ​a negotiated end to the war, Trump’s claims of ongoing ‘direct and indirect’ talks with Iran notwithstanding, and is bracing for ​a sharp escalation in military hostilities, which is a bullish signal for crude, with huge uncertainties on the timing and nature of the outcome,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

US President Donald Trump said ​the US and Iran have been meeting “directly and indirectly” and that Iran’s new leaders have been “very reasonable”, as more U.S troops arrived in ​the region, while the Israeli military said on Monday it is attacking the Iranian government’s infrastructure throughout Tehran.

Brent has soared 59 percent this month, the steepest monthly jump, exceeding gains seen during the 1990 Gulf War, after the Iran conflict effectively closed the Strait of Hormuz, a conduit for a fifth of the world’s ​oil and gas supplies.

The war, launched on February 28 with US and Israeli strikes on Iran, has spread across the Middle East, ​raising concern about shipping lanes around the Arabian Peninsula and the Red Sea.

The Israeli military on Monday said Iran launched multiple waves of missiles at Israel ‌and an ⁠attack had also been launched from Yemen for only the second time since the war began.

“The conflict is no longer concentrated in the Persian Gulf and around the Strait of Hormuz, but now extends into the Red Sea and the Bab el-Mandeb — one of the world’s most crucial chokepoints for crude and refined product flows,” JP Morgan analysts led by Natasha Kaneva said in a note.

Saudi crude exports ​re-directed from the Strait of ​Hormuz to the Yanbu port ⁠in the Red Sea reached 4.658 million barrels per day last week, data from analytics firm Kpler showed.

If exports from Yanbu were disrupted, Saudi oil would need to pivot toward Egypt’s Suez-Mediterranean (SUMED) pipeline to ​the Mediterranean, JP Morgan analysts said.

Attacks in the region escalated over the weekend and damaged Oman’s Salalah ​terminal despite efforts ⁠to start ceasefire talks.

Iran said it was ready to respond to a US ground attack, accusing Washington on Sunday of preparing a land assault even as it sought negotiations.

Pakistan’s Foreign Minister Ishaq Dar said they had covered possible ways to bring an early and permanent end to the ⁠war in ​the region as well as potential US-Iran talks in Islamabad.

Separately, Vietnam’s Binh Son ​Refining and Petrochemical on Monday said it is in talks with Russian partners to buy crude oil. The company said it would also buy more crude oil from Africa, ​the US and Southeast Asia.

Foreign loan disbursement declined by 26.2% in the first eight months (July–February) of the current fiscal year.

According to an updated report published today (30 March) by the Economic Relations Division (ERD), development partners disbursed $3.053 billion during this period, compared to $4.134 billion in the same period of the previous fiscal year.

ERD officials said the slowdown in project implementation due to elections led to the drop in disbursement. The administration remained focused on the election during the current fiscal year, which slowed the pace of development project implementation and affected foreign loan disbursement.

Officials also noted that, similar to the previous fiscal year, there was administrative instability at the beginning of the current fiscal year and during the interim government period. At the same time, there was a lack of confidence among development partners, which further slowed project implementation from the outset.

In addition, after the Awami League government lost power in 2024, many project directors and related officials left their positions. Appointing new project directors took time, and this situation persisted into the first half of the current fiscal year, disrupting both project implementation and fund disbursement.

Meanwhile, ERD data show that in the first eight months of the fiscal year, Bangladesh repaid nearly the same amount to development partners as it received in disbursements.

According to ERD, Bangladesh repaid $2.899 billion in principal and interest on past loans during July–February, while disbursement during the same period stood at $3.05 billion.

In the same period of the previous fiscal year, Bangladesh repaid $2.636 billion to development partners.

Officials said repayments have increased as grace periods for many previously taken loans have ended. However, on a full-year basis, repayments are still expected to remain lower than disbursements. For example, Bangladesh repaid $4.086 billion in the previous fiscal year, while disbursements were $8.56 billion. Similarly, although repayments may rise by the end of the current fiscal year, they are unlikely to exceed disbursements.

ERD data show that Bangladesh repaid $1.943 billion in principal during the first eight months, up from $1.692 billion in the same period last year.

Interest payments during this period amounted to $955.8 million, compared to $944.1 million in the same period of the previous fiscal year.

Meanwhile, Bangladesh secured $2.431 billion in foreign loan commitments during July–February, slightly higher than $2.353 billion in the same period last year.

ERD sources said that last fiscal year's student-led uprising, change of government, administrative instability, and lack of confidence among development partners contributed to lower loan commitments. Although the situation has improved in the current fiscal year, the interim government remains cautious about foreign borrowing, which has limited the pace of new commitments. However, commitments are expected to increase under a newly elected government.

Mustafa K Mujeri, executive director at the Institute for Inclusive Finance and Development, said development partners generally feel more comfortable working with a stable and democratically elected government. As a result, during the interim government period, both major loan commitments and disbursements remained low except for urgent needs. This contributed to the decline in disbursement compared to the previous fiscal year. Although commitments have increased somewhat in the first eight months, the rise is not significant.

He added that repayment of foreign loans taken in previous years has now become a major pressure. As repayment periods for loans taken under the previous government begin, the amount of repayment is increasing. Currently, disbursement and repayment are nearly at the same level, which could increase pressure on foreign exchange reserves.

According to him, if new loan inflows do not increase, this pressure may intensify in the future. At the same time, global uncertainties, including the Middle East conflict, have increased costs of energy, transport, and insurance. Importing oil and LNG from alternative sources at higher prices is putting additional strain on reserves. The current reserve stands at around $30 billion, and increasing it to $40-45 billion could bring some relief. In this situation, the government is seeking budget support from the International Monetary Fund, World Bank, and Asian Development Bank to ease pressure on reserves.

Mujeri said coordinated efforts are essential to tackle the crisis. Strengthening foreign assistance, expanding exports, boosting reserves, and controlling expenditure will help Bangladesh address these challenges.

According to ERD data, Russia disbursed the highest amount – $755.15 million – during July-February, mainly for the Rooppur power project. The World Bank disbursed $636 million, the Asian Development Bank $566.19 million, China $257.72 million, Japan $189.36 million, and India $152.89 million.

In terms of commitments, the Asian Development Bank provided the highest at $1.269 billion during the first eight months. The World Bank committed $416.25 million, while European Union countries pledged $392.07 million.

A dedicated division under Bangladesh Bank spearheads anew stolen-asset-recovery initiative with over 200 high-value non-performing loan (NPL) cases under scrutiny, each involving an estimated Tk 2.0 billion.Bangladesh market analysis

A newly established unit--Stolen Asset Recovery Division--is currently validating the amounts using data from the Credit Information Bureau (CIB), says Farhanul Gani Choudhury, adviser to the governor on stolen asset recovery.

Talking to The Financial Express, he said the 200 cases were shortlisted from NPL data submitted by commercial banks to the central bank. According to compiled information, these cases collectively account for approximately $12 billion or Tk 1.47 trillion in NPLs.

Bangladesh's total NPL volume stood at Tk 5.57 trillion as of December 2025, according to BB data.

Mr Gani clarifies that while the total NPL amount in these 200 cases is under intelligence scrutiny, it does not necessarily mean that the entire sum has been siphoned off.

"The SAR has now started working under a single platform to proceed in a structured way," he says.

The division will prioritise cases based on the number of banks affected by each NPL, he adds.

Under the second phase, SAR has engaged with 40 banks.Personal finance tools

Through civil proceedings, the division aims to determine how much of the NPL amounts in these 200 cases has actually been siphoned off the banking system.

Meanwhile, the first phase of the SAR initiative is also progressing in full swing.

"These 200 cases involve around 200 companies and individuals - a mixed group. While individuals are involved, they often operate through companies," Mr Gani says, without naming names of the suspects.

He notes that many of these borrowers are multi-bank clients, meaning a single individual has taken loans from multiple banks.

Sharif Zahir, chairman of UCB, which was the first bank to sign an NDA in the case involving former land minister Saifuzzaman Chowdhury, has said the response from litigation funders on asset recovery has so far been disappointing.

"One firm, FT, initially responded but later backtracked. Perhaps they found the amount not large enough or not sufficiently attractive," he says.Premium content access

He adds that UCB moved quickly to claim the alleged stolen assets in order to appoint an administrator. Grant Thornton has since taken over the administratorship.

"If we proceed through civil litigation, it is not that difficult to recover stolen assets. However, criminal proceedings require government-to-government agreements, which make the process more complex."

Mr Zahir expresses optimism about recovering at least part of the assets linked to Saifuzzaman Chowdhury, some of which have already been put up for sale in the UK.

On the 200 cases, Mr Gani explains that in cases where a single defaulter is linked to 10 or 15 banks, coordination becomes essential.

For cases involving only one bank, such coordination is not required, and the choice of international firm becomes less critical. However, in multi-bank exposures, a consortium or lead-bank approach is necessary.

"I have established an entirely new department. This work would not be sustainable without a strong institutional structure," he told the FE.

The SAR division consists of around 12 officials led by a director, in line with the organogram approved earlier by former BB governor Dr Ahsan H Mansur and endorsed by the current governor.

At a meeting with senior journalists on Sunday, the new BB governor reaffirmed his position to proceed on SAR without political and other interventions.

A director has already been appointed and is actively working on SAR. Previously, these responsibilities were partially handled by the Bangladesh Financial Intelligence Unit (BFIU), but now all asset- recovery functions have been consolidated under one umbrella.Bangladesh market analysis

All members of this division are officials of Bangladesh Bank. The structure includes one director from BFIU, two additional directors, four joint directors, and several assistant and deputy directors. Given the technical nature of the work, an IT specialist will also be appointed.

BFIU Director Syed Mahbub, who has been closely involved in SAR efforts from the outset, is also part of the division.

The division of crusaders for stolen asset recovery includes two to three joint directors who have completed two-year master's degrees in asset recovery from the UK, bringing valuable international expertise and knowledge of global best practices.

Under Phase 1, SAR has completed 36 non-disclosure agreements (NDAs) with 10 banks. NDAs have also been signed with nine international firms, and data sharing is now underway.

United Commercial Bank, Janata Bank, National Bank, Al-ArafahIslami Bank, Agrani Bank, AB Bank, and Islami Bank Bangladesh, among others, have signed the agreements with the law firms.

The global law and litigation firms engaged are Kroll, R1 Consortium, Interpath, Dentons/EY, DLA Piper/Unitas Global, PwC/Baker McKenzie, Omni Bridgeway, and Grant Thornton.Personal finance tools

"Data is the most critical element. Everything I have done so far has been through coordination. Now we will be able to assess how viable this data is for building cases internationally," Mr Gani further says.

He explains that prior to signing NDAs, international firms did not have access to case-level data and were relying only on broad macroeconomic estimates of capital flight.

"Now it will become clear how much of this can actually stand up in international jurisdictions. Based on this, they will need to convince their litigation funders. Once they receive positive feedback from those funders, they will proceed with commercial contracts."

The SAR division has already begun seeking feedback from international firms, with mixed responses so far.

Some banks have performed well by properly organising and indexing their data and clearly presenting their proceedings in the Money Loan Court. Others, however, have submitted unstructured data, reflecting gaps in capacity and understanding.

"I plan to organise a best-practice session where better-performing banks will demonstrate to others how to prepare and present data to the required standard," he says.

SAR has also asked international firms to formally outline their minimum data requirements to ensure clarity in expectations.

Officials have observed that not all international firms operate the same way - some are more supportive and flexible, while others are less so.

German companies are so deeply tied to both the United States and China that they cannot decouple from either without severe economic costs, according to a study by the University of Sussex and King's College London seen by Reuters on Monday.

The researchers mapped sales, production and supply-chain exposures of firms listed on Germany's DAX and MDAX indices, finding that dependence on the world's two biggest economies runs across sectors and individual companies.

Automakers and machinery groups are most reliant on China as a market, while chemical and pharmaceutical firms depend more heavily on the US for research, development and production, the study said. Digital, telecoms and semiconductor companies, meanwhile, are highly exposed to suppliers in both countries.

"Leading industrial players like Siemens and BMW were built in a fundamentally globalised system and can't decouple from either China or the US without devastating losses," University of Sussex political economist Steven Rolf, a co-author, said.

The study said BMW generates more revenue from China than from the United States, while also depending on Chinese battery supplier CATL for more than 1.4 billion euros ($1.5 billion) in inputs.

Siemens gets 24% of revenue from the United States and 12% from China, with supplier networks heavily exposed to both.

The findings underscore the difficulty for Berlin in crafting a clear strategy as US-China tensions intensify, Rolf said.

Dhaka Stock Exchange witnessed a second consecutive session of losses today (30 March) as persistent sell-offs, fueled by rising US-Israeli tensions over Iran, dragged the benchmark index down. The DSEX fell 41 points to close at 5,230.

Despite declining prices for 59% of listed stocks, turnover slightly increased by 2.69% to Tk663.87 crore, according to DSE data. The other key indices also ended lower, with the DSES down 5 points to 1,061 and the blue-chip DS30 falling 19 points to 1,979.

Among traded stocks, 111 advanced, 231 declined, and 51 remained unchanged.

Trading opened on a positive note at 10 am but lasted only seven minutes before selling pressure gripped the market, pushing indices into the red. Selling intensified in the latter part of the session, keeping stocks under pressure throughout the day.

EBL Securities said in its daily report that investor sentiment remained cautious amid ongoing geopolitical tensions in the Middle East and a nationwide fuel shortage.

"The market continued its losing streak for the second consecutive session, as investors shifted focus from large-cap stocks to momentum-driven speculative scrips," the report said. "Despite a firm start, broad-based selling emerged midway through the session, intensifying toward the close and dragging the index lower."

On the sectoral front, Pharma stocks accounted for the highest share of turnover at 18.2%, followed by Engineering at 11.7% and Banks at 9.7%.

Among gainers, Hakkani Pulp and Paper led with a 9.92% rise to Tk88.6, followed by Intech Ltd with a 9.41% gain to Tk43 and IFIC First Mutual Fund up 7.69% to Tk4.2.

Prime Finance was the top loser, slipping 9.25% to Tk4.9, followed by FAS Finance down 8.57% to Tk3.2 and Fareast Finance falling 8.33% to Tk3.3.

The port city bourse, Chittagong Stock Exchange, also ended in negative territory. Its CSCX and CASPI fell by 7.1 points and 17.7 points, respectively

The securities regulator has approved a proposal from non-listed Akij Food & Beverage Ltd to raise Tk 5 billion by issuing zero-coupon bonds, a move that reflects the growing reliance of large corporations on alternative financing instruments.Financial literacy course

According to the regulatory approval, the bond will be unsecured, non-convertible, and fully redeemable. Unlike conventional bonds, this instrument does not offer periodic interest payments. Instead, the bond is issued at a discounted price and redeemed at full face value upon maturity, allowing investors to earn a fixed return.

The approval came at a meeting of the Bangladesh Securities and Exchange Commission (BSEC) last week, presided over by its Chairman Khondoker Rashed Maqsood.

The tenure of the bond will range from six months to 60 months, providing flexibility for investors with varying investment horizons.

The bond units will be issued through private placement to banks, non-bank financial institutions, insurance companies, institutional investors, and high net-worth individuals. Each unit will carry a face value of Tk 1 million, effectively limiting participation to large-scale investors.

Sena Insurance has been appointed trustee, responsible for safeguarding investors' interests and ensuring regulatory compliance, while North Star Investments (BD) will act as the fund manager.Bangladesh market analysis

Market insiders said amid tighter banking liquidity and relatively high borrowing costs, corporations are actively diversifying funding sources. Structured instruments such as zero-coupon bonds allow issuers to better align repayment obligations with long-term revenue generation.

The proceeds from the issuance are expected to support the company's expansion and operational financing needs, although detailed utilisation plans were not disclosed. This would be a cost-efficient way to fund expansion without immediate interest servicing burdens.

Founded in 2006, Akij Food & Beverage has grown into one of the country's leading beverage manufacturers. Its portfolio includes several well-known brands such as Mojo, Frutika, and Speed, which enjoy a strong market presence across segments.

City Sugar Industries Limited, a concern of City Group, has received regulatory approval to raise Tk1,300 crore through a three-year zero-coupon bond.

The approval was granted by the Bangladesh Securities and Exchange Commission (BSEC) at a meeting today (30 March), according to a press release.

The proposed bond will be secured and mortgage-backed, non-convertible, and fully redeemable, with an estimated discount rate of around 13.50%. Under the structure, the company will provide land as collateral, offering enhanced security to investors.

The bond will be issued through private placement to corporate entities, high-net-worth individuals, banks, financial institutions, and insurance companies. Each unit of the bond will carry a face value of Tk13 lakh.

Officials said the proceeds from the bond issuance will be used to repay existing liabilities with various banks and financial institutions, helping the company restructure its debt and improve financial stability.

BRAC EPL Investments Limited has been appointed as the trustee of the bond, while BRAC Bank will act as the arranger. The bond is also expected to be listed on the Alternative Trading Board, providing a platform for secondary market trading.

Syed Rashed Hussain, chief executive officer of BRAC EPL Investments, said the mortgage-backed nature of the bond ensures a higher level of security for investors.

He explained that the company's land will be transferred under the trustee as collateral, and in case of default, the trustee will have the authority to liquidate the assets to repay investors.

He added that this is the first instance of a mortgage-backed bond issuance in Bangladesh, setting a precedent in the local capital market and potentially opening the door for similar structured financing instruments in the future.

Earlier, City Auto Rice and Dal Mills Limited, another concern of City Group, issued a Tk350 crore bond for repaying the debt.

Market analysts believe the move reflects a growing trend among corporates to explore alternative financing options beyond traditional bank loans, while also offering investors more secure investment avenues.

The interim government's reliance on the banking sector surged significantly to meet development project costs and other expenditures, with borrowing from internal banks reaching over Tk73,000 crore in the first seven months of the current fiscal year, FY2025-26.

According to a report from Bangladesh Bank, 81% of the government's total domestic and foreign loans between July and January were sourced from the internal banking system. The total net borrowing from both local and international sources stood at approximately Tk90,000 crore during this period.

Economists warn that excessive government borrowing from banks can crowd out the private sector, discouraging investment and creating pressure for interest rate hikes. This comes at a time when private sector credit flow has already hit a record low due to political instability ahead of the 13th national elections.

Central bank officials identified several factors behind the rapid increase in bank loans. A primary reason is the government's capital support for the "Combined Islamic Bank," formed by merging five banks. In the first week of last December, the government injected approximately Tk 20,000 crore into the bank, a large portion of which was financed through bank borrowing.

Additionally, while revenue collection fell short of targets in the first half of the fiscal year, operating expenses rose significantly, forcing the interim government to lean more heavily on the banking sector.

The government proposed a budget of Tk7.90 lakh crore for the FY2025-26, with an overall deficit (including grants) of Tk2.21 lakh crore, or 3.5% of GDP. To bridge this gap, the government planned to borrow Tk1.25 lakh crore from domestic sources, including Tk1.04 lakh crore from the banking system and Tk21,000 crore from non-banking sources.

However, data shows a sharp shift in borrowing patterns.

Net borrowing reached Tk73,035 crore from July to January, nearly an eight-fold increase compared to Tk9,442 crore during the same period of the previous fiscal year.

Borrowing from non-banking sources plummeted to Tk7,216 crore, down from Tk25,864 crore in the previous year.

The total stock of domestic debt stood at Tk10.37 lakh crore as of January 2025, an increase of over Tk1.51 lakh crore within a single year.

The report also highlighted a dwindling contribution from external sources. In the first seven months of FY2025-26, net foreign borrowing amounted to only Tk9,832 crore, accounting for less than 11% of total loans.

In contrast, the government had secured approximately Tk27,964 crore from foreign sources during the same period in the previous fiscal year.

Experts emphasised the need for a balanced debt management strategy to attract private investment and ensure long-term economic stability.

The Bangladesh Securities and Exchange Commission has approved the issuance of an Orange bond, the first of its kind in the country, by SAJIDA Foundation to raise Tk 158.5 crore to finance women's economic empowerment and accelerate progress towards gender equality.

The zero-coupon bond, a debt that pays no interest but is sold at a deep discount, marks a major milestone in Bangladesh’s capital market evolution, said a press release by BRAC EPL Investments Ltd.

SAJIDA Foundation partnered with BRAC EPL Investments Ltd and Impact Investment Exchange (IIX), the Singapore-based global impact investing platform, to issue the Orange bond, a specialised investment tool designed to raise money specifically for empowering women, girls, and gender minorities while tackling climate change.

“The pioneering bond supports the transition toward more inclusive, resilient, and capital market-driven development finance solutions, and contributes to broader efforts to develop the impact investment ecosystem in Bangladesh,” said the press release.

BRAC EPL Investments Ltd said Bangladesh’s bond market has long been dominated by government securities and bank subordinated debt. This transaction breaks that mould by introducing thematic, impact-linked fixed income as a new asset class.

The bond offers investors tax-exempt financial returns while enabling measurable social impact, particularly in supporting women and women-led businesses.

Some 48 percent of the proceeds will be allocated to food security and agriculture, 32 percent to women-led SMEs, and 20 percent will be used for climate-resilient housing across 36 districts.

“Impact will be tracked through independently verified annual reports aligned with international standards, ensuring transparency and tangible benefits for women’s economic empowerment.”

Minister for Power, Energy and Mineral Resources Iqbal Hasan Mahmud Tuku stated in a parliamentary session today (30 March) under Rule 300 that the government has taken the initiative to import 50,000 tonnes of octane in April.

Additionally, the government announced that another 30,000 tonnes of octane will be supplied from domestic sources.

As a result, even though the monthly demand is 35,000 tonnes, the current management will ensure an additional reserve for at least two months.

The minister said that although global instability – particularly tensions in the Middle East – has created pressure on the global fuel supply, Bangladesh has kept the situation under control through advanced preparation, consistent imports and effective management.

The minister noted that despite the increase in prices on the international market, fuel prices have not been raised domestically.
Keeping fuel prices stable a major success of govt: Salahuddin

Currently, while the selling price of diesel is Tk100 per litre, the actual cost is approximately Tk198. The government is also providing subsidies for octane.

The minister stated that for the March-June quarter, a total subsidy of Tk15,409 crore will be required for diesel, and Tk636 crore for octane, totalling Tk16,045 crore.

"Furthermore, for LNG imports through Petrobangla, a subsidy of Tk15,077 crore will be required for the April-June quarter. This government believes the state's primary responsibility is to stand by the people during crises and ensure their protection," he added.
What’s driving our hoarding instinct in the ongoing fuel crisis?

The minister said, "I want to reassure the nation through this parliament that fuel prices have not been increased in the country despite the foreign crisis. Many countries around the world have had to adjust fuel prices repeatedly. Even in many neighbouring countries, prices have increased by more than 25%."

He emphasised that the Bangladesh government has prioritised the public interest and kept prices stable, because if fuel prices rise, the cost of agricultural production, transport and the general public's cost of living increases manifold.

The discussion on hiking fuel prices comes in the face of a global crisis stemming from the Middle East war. In order to cope with energy shortages, prices have increased in many neighbouring countries, and some countries have even shut down educational institutions due to energy shortages.

Earlier, Home Minister Salahuddin Ahmed said keeping fuel prices unchanged in the country, despite their rise in international markets following the Middle East war, was a major success of the government.

Asian stock markets fell while oil prices surged today (31 March) as the ongoing war involving Iran continued to rattle global markets and drive up energy costs.

South Korea's benchmark Kospi index dropped sharply by 3.82%, losing more than 200 points to stand at 5,075.92 around 01:00 GMT.

Japan's Nikkei 225 also declined 2.24% in early trading before recovering slightly, though it remained down 0.73%, or 377 points, at 51,507.99.

China's FTSE China A50 Index edged lower as well, slipping between five and 10 points, or less than 0.07%, to hover around 14,570.

Meanwhile, oil prices climbed amid supply concerns linked to the conflict.

The US benchmark West Texas Intermediate rose 1.08% to $103.99 per barrel, crossing the $100 mark for the first time since the war began. International benchmark Brent Crude jumped 2.23% to reach $109.78 per barrel.

Rising crude prices have translated into higher fuel costs in the United States.

The average retail gasoline price has exceeded $4 per gallon for the first time in more than three years, according to data cited by Reuters from fuel tracking service GasBuddy.

Since the US-Israel war involving Iran began on February 28, gasoline prices across the US have surged by about $1.06 per gallon, marking a 36% increase.

The last time prices reached the $4 threshold was in August 2022, following the outbreak of the Russian invasion of Ukraine.

During his 2022 campaign to return to the White House, Donald Trump had pledged to cut energy costs and boost domestic oil and gas production, a promise now facing renewed scrutiny amid the latest price spike.

Oil companies will have to look further afield for new fossil fuel resources now that the Iran war has dented the investment allure of the energy-rich Middle East. Higher oil prices will give them that chance.

Major international oil companies, including Exxon Mobil, Chevron, TotalEnergies, Shell and BP, have long been drawn to the Middle ​East by its vast resources, stable fiscal terms and, until recently, relative political stability. The region accounts for roughly a fifth of global oil and liquefied natural gas (LNG) production.

That reputation, built painstakingly ‌over decades even as wars raged in Iraq and Yemen, has now been shattered by the US-Israeli war with Iran.

Now in its fifth week, the conflict has put energy infrastructure squarely in the crosshairs. Dozens of facilities across the Gulf have been damaged, including Qatar’s giant LNG hub and several major oil refineries.

The closure of the Strait of Hormuz - through which roughly 20 percent of the world’s oil and gas normally flows - has forced producers to shut oilfields, costing the region an estimated $1 billion a day in lost export revenues, according ​to Reuters calculations based on pre‑war prices.

The longer‑term costs will be far higher. Restarting operations and repairing damaged facilities will likely run into the tens of billions of dollars - if not far ​more. QatarEnergy said an Iranian missile strike on February 18 could cost it about $20 billion a year in lost revenue and take up to five years to repair.

But no amount of money may be able to repair the region’s reputational damage – at least not in the short term – and that is likely to rapidly reshape Western energy majors’ upstream strategies.

The ​Middle East will clearly remain a major source of oil and gas for decades. It holds about half of the world’s proven oil reserves and 40 percent of gas reserves. Western companies are thus unlikely to abandon ​it altogether.

It currently makes up a substantial portion of many majors’ portfolios, including 41 percent of Exxon’s reserves, 42 percent of TotalEnergies’ and a quarter of Shell’s, according to consultancy Welligence. The region attracted around $130 billion in oil and gas investment in 2025, roughly 15 percent of the global total, according to the International Energy Agency.

But unless the Iran war ends with a new, non-belligerent government sitting in Tehran - an outcome that currently appears remote - the conflict will leave deep scars. Uncertainty over the safety of transit ​through Hormuz and the higher risk of conflagration is apt to sharply boost the cost of deploying staff, equipment, insurance and capital in the Middle East, making the region a lot less attractive for exploration.

This ​rising risk premium in the world’s largest energy-producing region is already being reflected in long-term oil prices.

Since the eve of the conflict, the average Brent crude price expected in 2030 has jumped about 10 percent to roughly $72 a barrel. Once the ‌full extent of the damage from the war is known, that could rise even further.

A structurally higher oil price would change the upstream calculus for the world’s energy giants.

This shift comes as the industry’s appetite for new oil and gas investment has been strengthening. Over the past year, oil companies have significantly increased spending on exploration worldwide - from West Africa and the eastern Mediterranean to Brazil and Southeast Asia.

That was a sharp break from the prior decade, when shareholder pressure and fears of a rapid demand decline driven by the energy transition reduced upstream investment. Today, companies – spurred by new outlooks suggesting fossil fuel demand won’t peak until next decade – are ​increasingly confident that more supply will be needed through ​the end of the decade.

Of course, exploration remains ⁠a high‑risk, high‑reward business requiring heavy upfront investment. Projects can also often take more than a decade to progress from the first drilling campaign to production.

Still, higher long-term prices would expand the pool of economically viable reserves worldwide. And, importantly, the spiking risk premium in the Middle East is likely to push more ​capital toward regions previously deemed more risky or marginal.

Venezuela offers a case in point. Its oil industry reopened to Western companies after the US deposed President Nicolas ​Maduro in January, yet investment in ⁠the country has remained tepid given political uncertainty and concerns over the sector’s dilapidated infrastructure.

In a more bullish price environment, however, Venezuela’s vast resources could suddenly appear more appealing – particularly if the relative geopolitical risk gap between Venezuela and the Gulf shrinks.

The energy industry has been through such a geographic reshuffle before. After 2022, the Middle East gained importance when Western companies were forced to exit Russia following Moscow’s full‑scale invasion of Ukraine.

The Iran war now threatens to ⁠trigger another realignment - ​pushing companies to cast their investment nets wider than they have in years. But if the response this time around is ​to move into riskier or costlier areas, the floor on energy prices is likely going up.

Unpredictable tax practices, weak enforcement, and conflicting regulatory directives continue to raise costs and delay operations for businesses, Japanese investors said yesterday.

Speaking at an event at The Westin Dhaka, marking the Japan Business Day, they argued that without policy continuity, transparent administration, and reliable dispute resolution, long-term investment decisions remain at risk. The programme was jointly organised by the Embassy of Japan, Bangladesh and Japan External Trade Organisation (Jetro).

“Clear, consistent and fairly applied rules are vital to improve Bangladesh’s investment climate. Uncertainty often outweighs product competitiveness,” said Manabu Sugawara, president of Japanese Commerce and Industry Association in Dhaka (JCIAD), commonly known as Shoo-Koo-Kai.

He identified tax reform as a priority, calling for simpler procedures, clearer interpretations and reduced discretionary practices, alongside faster services and reliable dispute resolution.

Sugawara highlighted poor coordination among government agencies, saying conflicting directives create delays and raise costs for investors.

He also urged a functional one-stop service with fully digital, streamlined and time-bound approvals, licensing and renewals.

Pointing to persistent visa and permit delays, he said such bottlenecks must be resolved quickly.

Hiroshi Uegaki, country representative of Mitsubishi Corporation, one of Japan’s corporate giants, called for foundational reforms to strengthen Bangladesh’s investment climate for Japanese firms.

He stressed improving data management, business efficiency and digitalisation aligned with international standards to reduce delays.

Uegaki highlighted the importance of economic partnership agreements (EPAs) to ease import-export processes and support smoother operations.

Policy consistency, he added, remains critical to ensure long-term investor confidence and signal a stable, business-friendly environment.

Tareq Rafi Bhuiyan, president of the Japan-Bangladesh Chamber of Commerce and Industry, said the EPA would ensure continued market access to Japan and strengthen investor confidence through a rules-based framework.

The Bangladesh–Japan EPA is being seen as critical to sustaining trade and investment as Bangladesh prepares for LDC graduation, he said. “Investors value predictability and long-term trust,” he noted, adding that reforms must align with EPA commitments to attract sustained Japanese investment.

Also speaking at the event, Rashed Al Mahmud Titumir, the prime minister’s adviser on finance and planning, pointed out priorities to deepen Bangladesh–Japan economic ties and shift focus from aid to investment-led growth.

He said Bangladesh wants higher Japanese investment to match global averages, with a stronger emphasis on manufacturing to create sustainable jobs.

He also stressed the need for greater technology transfer through joint ventures, enabling long-term industrial capacity and competitiveness. Titumir added that the government is committed to policy reforms, including deregulation, stronger market-based oversight, and improved contract enforcement to build investor confidence.

Ashik Chowdhury, executive chairman of the Bangladesh Investment Development Authority (Bida), outlined a set of reforms aimed at attracting sustained foreign investment, particularly from Japanese firms.

He said improving the business climate would require making tax administration more transparent and efficient, reducing the burden of unpredictable enforcement. He also stressed the need for stronger coordination among government agencies to avoid conflicting directives that often delay operations.

Chowdhury called for a fully functional “one-stop service” to streamline licensing through digitalisation and ensure visa processing within a predictable timeframe. Policy consistency, he added, remains crucial for long-term corporate planning and boosting investor confidence.

Japanese Ambassador to Bangladesh Shinichi Saida described the recently signed bilateral EPA as a landmark step, urging Bangladesh to view it through a long-term lens rather than immediate gains.

He said the deal offers legal certainty for investors and reinforces a rules-based trade environment at a time of global uncertainty.

Meanwhile, presenting the findings of a survey on business conditions of Japanese firms, Kazuiki Kataoka, country representative of Jetro, said Bangladesh is emerging as a promising frontier for Japanese businesses, with stronger profit expectations and growing interest in expansion.

He noted that 56.9 percent of Japanese firms in Bangladesh plan to expand operations, driven largely by the country’s rising domestic market.

He also pointed to administrative inefficiencies and policy uncertainty as major risks, stressing that improving these areas could unlock greater foreign investment.

Syed Nasim Manzur, managing director of Apex Footwear Limited, said Bangladesh should position itself as a manufacturing hub, exporting to Japan and integrating into global value chains.

Leveraging the EPA, he added, could deepen long-term partnerships and boost trade and services.

M Masrur Reaz, chairman and CEO of Policy Exchange of Bangladesh (PEB), said Bangladesh’s prospects under the proposed economic partnership with Japan remain promising, but some weaknesses could blunt its gains.

He said weak inter-agency collaboration, fragmented public-private dialogue, and limited private-sector linkages undermine policy execution and investment climate reforms.