Why the 2025 Strategy Needs to Be Different
Between 2023 and 2025, Bangladesh's business environment changed fundamentally. The July 2024 political transition (Prime Minister Sheikh Hasina's resignation and the inauguration of an interim government), a shift in U.S. tariff policy, stabilization of Bangladesh's foreign exchange market, and the launch of Korea-Bangladesh CEPA negotiations have combined to demand a comprehensive reassessment of market entry strategies. Executing a 2023-vintage entry plan unchanged risks missing market opportunities or encountering unexpected risks.
This article compares the Bangladesh market entry environment between 2023 and 2025 across eight core indicators, and outlines the strategic implications and required adjustments for Korean companies. The focus is on the update points that companies who have already read the 2023 reports need to internalize.
Macro Environment Comparison: 2023 vs. 2025
| Indicator | 2023 | 2025 | Direction | Strategic Impact |
|---|---|---|---|---|
| GDP Growth Rate | 6.5% | 5.8% | ▼ Slight decrease | Modest domestic market growth slowdown |
| GDP per Capita | $2,688 | $2,850 | ▲ Slight increase | Consumer purchasing power maintained |
| Exchange Rate (BDT/$) | 86–90 | 117–122 | ▼▼ Sharp depreciation | Rising import costs |
| Inflation | 9.0% | 7.5% | ▲ Improving | Consumer sentiment recovering |
| Foreign Reserves | $32B | $22B | ▼ Declined | LC issuance restrictions easing |
| RMG Exports | $45B | $48B | ▲ Growing | Rising raw material demand |
| FDI Inflows | $3.5B | $3.0B | ▼ Slight decline | Investment environment uncertainty |
| Political Stability | Stable | Interim gov. | ▼ Uncertain | Short-term risk present |
Eight Core Changes and Strategic Adjustments
1. Exchange Rate Shift: The Dual Effect of Taka Depreciation
The Bangladeshi Taka (BDT) has depreciated approximately 40% from $1=86 BDT in 2023 to $1=120 BDT in 2025. This creates a dual effect for Korean exporters. On the export side, the local price of Korean products rises, weakening price competitiveness. At the same time, using Bangladesh as a production base (Korean components in → finished goods exported from Bangladesh) significantly strengthens cost competitiveness.
2. Political Environment: The Interim Government and Business
Student protests in July 2024 led to Prime Minister Sheikh Hasina's resignation and the inauguration of an interim government led by Chief Adviser Muhammad Yunus. The interim government is focused on economic reform and anti-corruption, and is showing a favorable posture toward attracting foreign investment — but uncertainty remains until the next general election. Political risk that was not part of the 2023 calculus now needs to be factored into entry strategies.
3. CEPA Negotiations: A New Game-Changer
Official Korea-Bangladesh CEPA (Comprehensive Economic Partnership Agreement) negotiations launched in October 2024. This variable — which did not exist in 2023 — is a core consideration for medium-to-long-term entry strategy. A completed CEPA is expected to deliver tariff reductions, services market opening, and strengthened investment protections. Companies that build market positioning proactively stand to benefit most.
| Area | Pre-CEPA (Current) | Post-CEPA (Expected) | Strategic Implication |
|---|---|---|---|
| Tariffs | Average 22% | 5–10% (phased) | Identify tariff-reduction products in advance |
| Services | Limited opening | IT, finance, logistics opening | Prepare services export readiness |
| Investment Protection | BIT only | Strengthened ISDS mechanism | Reduced investment risk |
| Rules of Origin | GSP criteria | CEPA preferential origin | Redesign origin strategy |
| Non-Tariff Barriers | High | Mutual recognition of standards | Expected certification cost reduction |
4. U.S. Tariffs and Bangladesh as an Alternative Market
The 2025 U.S. tariff increases have impacted Korean exporters' U.S.-bound sales, putting a new spotlight on Bangladesh as both an "alternative market" and a "production base for alternative routing." Where 2023 strategies viewed Bangladesh purely as an export destination, 2025 strategies must also consider a production base approach that leverages Bangladesh's EU EBA duty-free access.
5. Foreign Exchange Market: LC Issuance Normalizing
The LC (letter of credit) issuance restrictions at Bangladeshi banks — the biggest market entry obstacle in 2023 — have been substantially eased by 2025. Foreign reserves have declined but are stabilizing under Bangladesh Bank management, with LC issuance trending back toward normal. This significantly reduces Korean companies' export payment collection risk.
Updated Entry Strategy Framework
| Strategy Area | 2023 Strategy | 2025 Update | Priority Change |
|---|---|---|---|
| Target Market | RMG raw materials focus | RMG + Consumer Goods + IT | Expanded |
| Entry Mode | Direct export primary | Export + Local presence in parallel | Reinforced |
| Pricing Strategy | Standard FOB pricing | Flexible FX-adjusted pricing | Essential change |
| Payment Terms | LC at Sight | Usance LC + trade insurance | Flexibilized |
| Partner Strategy | Single agent | Multi-channel (agent + e-commerce) | Diversified |
| Certification and Compliance | Obtain when needed | Secure certifications proactively | Front-loaded |
| Risk Management | Transaction risk only | Transaction + political + FX risk | Reinforced |
| Long-Term Vision | Export market | Export + Production base + Services | Strategic expansion |
Action Plan by Company Type
| Company Type | Immediate (1–3 months) | Short-Term (3–6 months) | Medium-Term (6–12 months) |
|---|---|---|---|
| New Entrant | Market research + buyer matching | Trade mission + trial order | Localization support program |
| Existing Exporter | Reassess pricing + FX hedging | Renegotiate payment terms | Channel diversification |
| Investment Consideration | BIDA investment consultation | EPZ / SEZ on-site due diligence | Entity setup + certifications |
| Consumer Goods Entry | Initiate halal certification | E-commerce entry (Daraz) | Distribution partner agreement |
Over two years, Bangladesh's business environment has evolved into one where risks and opportunities coexist. Taka depreciation and political uncertainty are short-term risks, but the CEPA launch, industrial diversification, and K-content popularity are medium-to-long-term opportunities. The essential move is not to maintain the 2023 strategy unchanged, but to redesign it for the changed environment. Review the eight changes above and update your company's entry plan accordingly.