Bangladesh's trade deficit widens 34% to $27.29 bn, a 3-year high
Bangladesh’s merchandise trade deficit widened nearly 34 per cent to $27.29 billion in fiscal year 2025-26 (FY26), as imports rose 10.5 per cent while export earnings declined slightly, underscoring the need to diversify exports and strengthen domestic manufacturing, according to Bangladesh Bank data.
Merchandise imports reached $71.14 billion in FY26, compared with export earnings of $43.856 billion, pushing the goods trade gap to its highest level in three years.
China and India account for the largest shares of Bangladesh’s trade deficit. In FY25, Bangladesh imported $18.56 billion worth of goods from China while exporting $694.4 million, resulting in a deficit of about $17.86 billion. Imports from India totalled $9.62 billion against exports of $1.76 billion, leaving a deficit of approximately $7.86 billion.
Bangladesh also recorded trade deficits of around $3.58 billion with Indonesia, $2.80 billion with Singapore and $2.01 billion with Malaysia. Deficits persisted with South Korea, Thailand, Vietnam, Taiwan and Japan.
Imports from China and India include industrial raw materials, machinery, fabrics, yarn, cotton, food grains and electronic goods that support domestic manufacturing and export-oriented industries. As a result, curbing imports alone may not address the imbalance; strengthening local production, improving competitiveness and using imported technology to support export growth are also essential.
Bangladesh’s export base remains heavily concentrated in readymade garments, which accounted for 80.62 per cent of total export earnings in FY26. Exports of leather, jute, agricultural products, pharmaceuticals and engineering goods remain comparatively limited, leaving the country exposed to risks arising from dependence on a narrow range of products and markets.
Business leaders see opportunities to expand exports across Asian markets despite global economic uncertainties. However, limited product diversification, supply-chain delays, high tariffs and constraints arising from trade agreements continue to hamper market access and export growth.
To address these challenges, the government is developing country-specific strategies for 18 key export destinations, including China, India, Japan and South Korea. The plans aim to identify market demand, trade barriers and potential export products in each market, local media reported.
Strengthening links with Asian regional production and supply chains, alongside diversifying export products and destinations, will be crucial for Bangladesh to narrow its trade gap and sustain export growth.
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