Trade & Business

Korea-Bangladesh Bilateral Relations in 2020: Diplomacy, Economic Cooperation, and ODA Analysis

Korea-Bangladesh Bilateral Relations Overview

Korea and Bangladesh have maintained a friendly relationship since establishing diplomatic ties in 1973, now spanning about 47 years. By 2020, cooperation had become increasingly structured around trade, investment, ODA, and people-to-people exchanges. Korea is one of Bangladesh's top seven donor countries and a major source of investment. About 5,000 Korean nationals were living in Bangladesh (including corporate assignees, NGO staff, and expatriate communities), while around 17,000 Bangladeshi nationals were in Korea (workers, students, and trainees). The two countries formalized a Comprehensive Partnership in 2012.

1973
Diplomatic Relations
47 years
USD 180M
Bilateral Trade
2020
USD 300M/year
ODA
EDCF + KOICA
450
Korean Firms
actively operating
17,000
People Exchange
Bangladeshis in Korea
USD 1B+
Cumulative FDI
Korean investment

Korea ODA by Sector (2020)

Korean ODA to Bangladesh by Sector (2020)
SectorAmountShareFlagship ProjectsImplementing Agency
Transport InfrastructureUSD 80M27%Rail, bridges, roadsEDCF
Power & EnergyUSD 60M20%Power plants, transmission networkEDCF
Education & HRUSD 40M13%Vocational training, scholarshipsKOICA
HealthUSD 35M12%Hospitals, medical equipmentKOICA
Water and SanitationUSD 30M10%Water treatment, sewerageEDCF
ICT & e-GovernmentUSD 25M8%Digital infrastructureKOICA
Agriculture & Rural Dev.USD 20M7%Agri-tech, irrigationKOICA
OthersUSD 10M3%Governance, environmentKOICA

EDCF (Export-Import Bank of Korea's Economic Development Cooperation Fund) and KOICA (Korea International Cooperation Agency) form the twin pillars of Korea's development cooperation in Bangladesh. EDCF focuses on concessional-loan financed infrastructure, while KOICA supports grant-based technical cooperation and human-resource development.

EDCF vs KOICA at a Glance

EDCF (Concessional Finance)
TypeLow-rate loan (0.01~0.2%)
ScaleUSD 200M/year
Core SectorsTransport, Power, Water
Representative ProjectDhaka MRT / Karnaphuli tunnel
KOICA (Grant Support)
TypeGrant support
ScaleUSD 100M/year
Core SectorsEducation, Health, ICT
Representative ProjectVocational centers, telemedicine
01
Korean Investment Landscape
About 450 Korean firms were operating in Bangladesh in 2020. (1) Textiles: large garment factories led by companies such as Yeawon, Hanjeseol, and Sear. (2) Infrastructure: construction and EPC projects by Korea Motors, Korea Construction C, 코리아GS, and Korea Steel affiliates. (3) Manufacturing: Korea Electronics sales subsidiaries and 코리아디스플레이 Electronics assembly. (4) Finance: Woori and Hana Bank branches in Dhaka. (5) Services: 코리아CJ logistics and Korea Air routes. Around 80 Korean firms were also present in EPZs.
02
People Exchange and EPS
Through EPS (Employment Permit System), about 15,000 Bangladeshi workers were employed in Korea. Bangladesh is one of EPS' 16 approved sending countries, with placements concentrated in manufacturing, construction, and agriculture. Annual remittances were about USD 500M, serving as a key economic bridge. In addition, roughly 2,000 Bangladeshi students were enrolled in Korean universities; more than 50 were beneficiaries of the KGSP scholarship program each year.
03
Flagship Cooperation Projects
(1) Dhaka MRT Line 1: USD 1.5B EDCF loan with Korean consortium participation. (2) Karnaphuli sub-sea tunnel: construction participation by Korean firms. (3) Payra deep-sea port: Korean consulting participation. (4) ICT Village: KOICA-supported IT education and incubator programs. (5) Maternal-and-child health: KOICA-led project in Sylhet. (6) Skills development: Korea-Bangladesh Technical Training Center (BKTTC) operation.
04
Prospects for Bilateral Deepening
(1) CEPA pursuit: potential free-trade-style framework to liberalize tariffs, investment, and services. (2) Defense cooperation: Korean defense firms such as KAI and Korea Hanwha entering Bangladesh markets. (3) New Southern Policy: strengthening Korea's economic links across ASEAN, India, and Bangladesh. (4) Climate adaptation: expanded opportunities for Korea in climate resilience and disaster-management fields. (5) Cultural exchange: growing K-Pop and Korean drama popularity is creating new business opportunities.

Evolution of Bilateral Relations

1973
Diplomatic Relations Established
1988
Embassy Opened
2010
EDCF Engagement Expanded
2012
Comprehensive Partnership Launched
2019
Presidential Summit (Moon Jae-in)
2020
Trade reached USD 180M
Target
CEPA Signing
Bangladesh Garment Exports in 2020Largest Korean investment sector
Bangladesh IT Outsourcing in 2020Emerging cooperation segment

Korea-Bangladesh bilateral relations in 2020 were characterized by a multi-layered deepening across ODA, trade, investment, and labor mobility. As CEPA negotiations and Korea's New Southern Policy advance, cooperation is expected to expand further, while Korean firms should watch opportunities in infrastructure, manufacturing, ICT, and defense.

Koreabilateral relationsODA2020diplomacy
Korea-Bangladesh Bilateral Relations in 2020: Diplomacy, Economic Cooperation, and ODA Analysis | Dhaka Trade Portal