Bangladesh UAE Trade
and Economic Partnership
General Information
Bangladesh and the UAE have been trading partners for several decades. However, a significant shift in the economic relations between the two nations happened in recent years. The UAE has become the 18th largest trading partner of Bangladesh and is the largest remittance source for Bangladesh. UAE is also a leading foreign investor in Bangladesh. In more recent time, the volume of trade between the two countries exceeds USD 2 billion.
Bangladesh-UAE Trade Highlight
Trade Overview
The economic partnership between Bangladesh and the UAE has seen substantial growth, with bilateral trade reaching over $1.8 billion in 2023. Bangladesh’s primary exports to the UAE include readymade garments, knitwear, agricultural products, and jute goods. Conversely, the UAE exports crude oil and petroleum products to Bangladesh. These trade dynamics reflect the complementary nature of the two economies, with each country leveraging its strengths to benefit the other.
Bangladesh’s exports to the UAE have steadily increased over the years, showcasing the competitiveness and quality of Bangladeshi products. The readymade garment sector, in particular, has been a significant contributor to this growth. Bangladeshi garments are known for their quality and affordability, making them highly sought after in the UAE market. The agricultural sector has also played a crucial role, with products like fruits, vegetables, and spices finding a ready market in the UAE. These exports have not only boosted Bangladesh’s economy but also provided employment opportunities to millions of workers in the country.
On the other hand, the UAE’s exports to Bangladesh primarily consist of crude oil and petroleum products. Given Bangladesh’s growing energy needs, these exports are crucial in supporting the country’s industrial and economic activities. The UAE has been a reliable supplier of energy products, ensuring a steady flow of fuel to meet Bangladesh’s demands. This energy partnership is vital for Bangladesh’s economic development, as it ensures the availability of essential resources needed for industrial growth and infrastructure development.
The bilateral trade relationship is further strengthened by the complementary nature of the two economies. While Bangladesh is an emerging economy with a strong manufacturing base, the UAE is a wealthy nation with abundant energy resources. This complementarity ensures a balanced trade relationship, with each country benefiting from the other’s strengths. The increasing trade volumes reflect the mutual benefits derived from this partnership and the growing interdependence between the two nations.
Trade Statistics
During FY 2023-2024, the export to the UAE from Bangladesh reached USD 428.32 million as of March 2024. In FY 2021-2022, home textiles exports were USD 382.5 million, culminating in a record-high total export figure of USD 864.2 million.
The growth in Bangladesh’s exports to the UAE can be attributed to several factors. Firstly, the quality and affordability of Bangladeshi products have made them highly competitive in the UAE market. Secondly, the strong diplomatic and strategic ties between the two countries have facilitated greater market access for Bangladeshi products. Thirdly, strategic initiatives taken by both governments to promote trade have played a crucial role in boosting exports. These factors, combined with the increasing demand for Bangladeshi products in the UAE, have contributed to the steady growth in exports.
On the other hand, the UAE’s exports to Bangladesh have also seen significant growth. The UAE’s strategic location as a global trading hub and its abundant energy resources have made it a key supplier of crude oil and petroleum products to Bangladesh. The increasing energy needs of Bangladesh, driven by its rapid industrialization and economic growth, have further boosted the demand for UAE’s energy products. Additionally, the favourable trade agreements and strong diplomatic relations between the two countries have facilitated the smooth flow of goods and services, further enhancing trade volumes.
Bilateral Trade Between Bangladesh & UAE (in million USD)
Major Commodity-wise Export to the UAE from Bangladesh
UAE- Bangladesh Trade Figure
Investment Landscape
As of September 2022, UAE’s net Foreign Direct Investment (FDI) stock in Bangladesh was US$ 529.74 million, making it the 5th largest foreign investor in the country.
The UAE’s investments in Bangladesh have been primarily focused on key sectors such as textiles, banking, ceramic, chemicals, pharmaceuticals, energy, infrastructure, and real estate. The energy sector, in particular, is promised to attract approximately US$7.0 billion in several energy projects in Bangladesh. These investments will play an instrumental role in enhancing Bangladesh’s energy security and supporting its industrial growth.
In addition to energy, the UAE has also invested heavily in Bangladesh’s infrastructure sector. The development of ports, logistics hubs, and transport infrastructure has been a key focus area. These investments have not only improved Bangladesh’s connectivity but also enhanced its trade capabilities. The development of the Matarbari Exclusive Economic Zone (EEZ) and other strategic locations has further boosted Bangladesh’s attractiveness as an investment destination.
| Year | Net FDI (in USD million) |
| 2000 | 0.86 |
| 2005 | 12 |
| 2010 | 22 |
| 2015 | 11 |
| 2020 | 98 |
| 2022 | 102 |
The real estate sector has also seen significant investment from the UAE. Urban development projects, including the construction of commercial and residential properties. These investments have contributed to the rapid urbanization of Bangladesh and the growth of its real estate market.
Potential Investment Opportunities:
Bangladesh presents a promising investment landscape for the UAE, offering a multitude of sectors ripe for investment and collaboration. UAE has numerous investment opportunities in Bangladesh across a diverse range of sectors which include LNG terminals, power sectors, port management, the blue economy, portfolio investment, and infrastructure development projects. Additionally, the UAE can explore investment prospects in industries such as textiles, leather, jute and its products, electricity, renewable energy, biotechnology, tourism, and ICT.
While the UAE authorities and investors possess substantial financial capabilities, they may engage in joint venture by providing fund to the local entrepreneurs or investors from Bangladesh who undertake large-scale projects.
MoU’s signed to Boost Investment between Bangladesh and UAE
- The Government of Dubai and Public Private Partnership (PPP) Authority under the Prime Minister’s Office signed the first MoU to set up a port, dry port, and an industrial park in Bangladesh.
- An MoU was signed between Emirates National Oil Company (ENOC) and Power, Energy, and Mineral Resources of Bangladesh, to supply LNG to Bangladesh on a long-term basis and develop a land-based LNG receiving terminal in Payra. ENOC also wanted 300 acres of land in Payra Port where they would construct the LNG terminal that will help boost Bangladesh’s energy security.
- An MoU was signed between Sheikh Ahmed Dalmook Al Maktoum and the Power Development Board of Bangladesh (PDB). The objective of this MoU was to set up an integrated 800-1000 MW LNG power plant in two phases. There will also be a 100MW solar power project.
- Another, MoU was signed between the private office of Sheikh Ahmed Dalmook Al Maktoum and the Bangladesh Investment Development Authority (BIDA). The focus of this MoU was on setting up a special economic zone in Matarbari where they a company would be set up for investment in 300 acres of land.
- The UAE’s Almaden Emirates Fortune Power and Bangladesh’s Intraco Solar Power signed a preliminary agreement to develop solar plants backed by investment commitment of $5 billion from the Arab Investment Development Authority (AIDA). AIDA, which is supported by the European Union and the United Nations, has a mandate to develop and finance sovereign projects across the subcontinent, Mena as well as Africa in human development, energy, infrastructure, agriculture as well as technology. The solar development will be completed over a six or eight-year timeline and will see the deployment of 14 million solar panels, with a total capacity of 5 Gigawatts, in one of the largest such investments in the sector in Bangladesh.
Labor Mobility and Remittances
Labor mobility is a crucial aspect of the Bangladesh-UAE relationship. Over 1 million Bangladeshi workers, both skilled and unskilled, reside in the UAE, contributing significantly to the economies of both countries. In 2022, approximately 57,988 workers from Bangladesh arrived in the UAE in the first half of the year alone, highlighting the high demand for Bangladeshi labour in sectors such as construction, hospitality, and domestic services. These workers play a vital role in supporting the UAE’s economic activities and development projects.
Bangladeshis are major investors in the UAE economy where more than 50,000 businesses are owned and successfully run by Bangladeshi expatriates who employ more than 150,000 people collectively.
On the other hand, the contribution of Bangladeshi workers to the UAE’s economy is significant. They provide essential services in various sectors, including construction, hospitality, healthcare, and domestic services. Their hard work and dedication have made them a valuable part of the UAE’s workforce. The remittances sent by these workers to Bangladesh also play a crucial role in supporting the country’s economy. These remittances amount to approximately $3 billion annually, providing a significant boost to Bangladesh’s foreign exchange reserves and supporting countless families back home.
The strong demand for Bangladeshi labor in the UAE is driven by several key factors. First, the UAE’s rapid economic expansion has generated a significant need for labor across various sectors. Second, Bangladeshi workers are highly valued for their skills and strong work ethic, making them a preferred choice in the UAE job market. Additionally, the close cultural ties between the two nations have further encouraged labour mobility. Together with favourable labour policies and bilateral agreements between the governments, these elements have led to the high demand for Bangladeshi workers in the UAE.
The remittances sent by Bangladeshi workers in the UAE are a vital source of income for many families in Bangladesh. These remittances help support household expenses, education, healthcare, and other essential needs. They also contribute to the country’s economic development by providing a steady flow of foreign exchange. The significant remittances sent by Bangladeshi workers in the UAE highlight the importance of labour mobility in the bilateral relationship between the two countries.