Bilateral Trade

Republic of Korea has been one of the most reliable development partners of Bangladesh and has been extending significant cooperation and support to Bangladesh since the early 1970s. It is one of the major trading partners of Bangladesh. Bilateral trade volume recorded USD 3.035 billion in 2022, a 38.71% increase from 2021. ROK has been allowing duty-free and quota-free access to the Korean market to 95 percent (for 4,802 products) of Bangladesh products since 2008. The main exporting items of Bangladesh to ROK are leather, Woven garments, Jute manufactures, Pharmaceuticals, Jute yarn & twine, other mfd. goods, Knitwear, Footwear (leather & sports), Stainless steel wares, frozen fish, Cap, Copper wire, and raw jute. Major items imported for ROK to Bangladesh are vegetable products, Live animals, Mineral products, plastic & Articles thereof, Textile & Textile articles, Articles of stone, Machinery & mechanical appliances, Vehicles, aircraft, Optical, Photographic, Footwear, Umbrellas etc.

Investment

The Republic of Korea is a pioneer country to invest in Bangladesh and ranks fourth with an accumulated gross stock of USD 1458.35 million as of December 2022. Korean companies were the first to invest in the RMG sector in Bangladesh in the early 1980s. Korea is also the biggest foreign investor in Export Processing Zones with 75 companies operating in the Zone. 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 ROK companies have so far invested 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).

Labour Relations

Labor market for Bangladeshi laborers continued to grow under the existing Employment Permit System. Bangladesh has been sending its unskilled workers to the ROK under the Employment Permit System (EPS) since 2008 which has substantially reduced the cost of migration. Approximately 12,500 Bangladeshi contractual employees under EPS are engaged in the manufacturing sector in the Republic of Korea.