Trade

The Republic of Korea has long been one of the major trading and development partners of Bangladesh. Bangladesh as LDC has been enjoying Duty-Free-Quota-Free (DFQF) access to the Korean market of about 95% (4000+) products under the Asia-Pacific Trade Agreement (APTA) and WTO arrangements since 2008. The major export items of Bangladesh to the Republic of Korea are-woven garments, knitwear, home textiles, leather, and leather products including footwear, frozen food, ceramic items, pharmaceuticals, jute & jute goods, tents, synthetic ropes. The major import items of Bangladesh from the Republic of Korea are- Iron and steel, plastics, and articles thereof, machinery, mechanical appliances, boilers; paper and paperboard; articles of paper; Tanning or dyeing extracts; tannins and their derivatives etc. RMG dominates Bangladesh’s export products to Korea.

Bilateral trade between the two countries has witnessed growth in recent years. The bilateral trade volume crossed US$ 2 billion mark for the first time in 2021 and then surpassed US$ 3 billion mark in 2022. Bilateral trade registered US$ 2.3 billion in 2023.

Investment

The Republic of Korea was the first country to set up an exclusive foreign Export Processing Zone (KEPZ) in Bangladesh and still is one of the top sources of Foreign Direct Investment (FDI), especially in textile and clothing sector. Currently, Republic of Korea stands as the fourth-largest contributor to Foreign Direct Investment (FDI) in Bangladesh, with a total stock amounting to US$ 1493.04 million (as on the end of December 2023). Korea is still one of the top sources of Foreign Direct Investment, especially in the textile and garment sector. It is increasingly engaging in the infrastructure, energy, ICT and Medical equipment sectors. More than 200 Korean companies are investing in Bangladesh.

Development Cooperation 

The Republic of Korea remains one of the major development partners of Bangladesh. Korea’s economic and technical assistance is channeled through two mechanisms: (a) grants for social sector projects from the Korea International Cooperation Agency (KOICA), and (b) concessional/soft loans for infrastructure from the Economic Development Co-operation Fund (EDCF) conducted by the Export-Import Bank of Korea (Korea Exim Bank). The Korean economic and technical assistance are concentrated in the priority areas of Bangladesh such as health, ICT, education, water treatment, energy and transport, etc. Korea has recently increased its development loans for Bangladesh to $3 billion from $700 million for a period of five years (2023-2027).

Manpower Cooperation

Manpower cooperation continued to grow under the existing Employment Permit System. Bangladesh has been sending its unskilled workforce to the ROK under the Employment Permit System (EPS) since 2008 which has substantially reduced the cost of migration. Approximately 13,000 Bangladeshi contractual employees under EPS are engaged in the manufacturing sector in the Republic of Korea.