Strengthening Ties: The Path to Greater French Investment in Bangladesh

“The booming consumer market, its strategic location as a gateway between South and Southeast Asia, the availability of a skilled labor force, and the government’s efforts to improve the business environment and attract foreign investment are many reasons for foreign companies to grow interest in Bangladesh. At the same time, I also observed that Bangladeshi companies and authorities are more and more interested in engaging with French companies, as they are providing reliable advanced technologies and know-how that are aligned with the vision of Smart Bangladesh,” Ambassador Masdupuy began with. 

Ambassador Masdupuy believes that the Bangladesh-France Trade and Investment Summit organized by Bangladeshi authorities in Paris, on 23rd October and Toulouse on 25th October, and the visit of the President of the French Republic, are both signs of a common interest to grow our business ties further. 

However, despite the growing enthusiasm for investment in Bangladesh, certain roadblocks persist. Ambassador Masdupuy pointed out the lack of knowledge outside Bangladesh regarding the nation’s remarkable growth story. Her Excellency stressed the pivotal role that institutions like the Bangladesh Investment Development Authority (BIDA) and the Bangladesh Securities and Exchange Commission (BSEC) will play in showcasing the country’s prospects to potential investors.

The ease of doing business remains a concern for French companies, despite notable improvements such as the implementation of one-stop services by BIDA. Additionally, the ongoing pressure on foreign exchange reserves has become a new concern for companies, affecting their ability to remit profits outside of Bangladesh. It is hoped that this pressure will ease under the IMF program and Bangladesh Bank policies.

The French Ambassador, Masdupuy, shared, “Some neighboring countries like India or Thailand are hosting more than 600 French companies. At the same time, there are only a few above 30 in Bangladesh. As much as it underlines the lack of attractivity so far, it shows the great potential that lies ahead.”

Ambassador Masdupuy noted that there is significant headroom for French investment in Bangladesh, particularly in sectors like aerospace. Bangladesh’s strategic geographical location makes it a key player in connecting Europe and Asia, and infrastructure projects, including collaboration with Thales, underscore the potential for further cooperation in this sector. Airbus is also set to boost the capacity and fleet of Biman Bangladesh Airlines, aligning with Bangladesh’s ambitious plans to expand its aviation industry. 

According to the Ambassador, the European company Airbus is mobilized to straighten the capacity and the fleet of the Bangladeshi national carrier, Biman Bangladesh Airlines. Her Excellency mentioned that the announcement of the purchase of 10 A350s during the French President’s visit is surely a milestone for Biman, as by 2041, it was forecasted that the Bangladesh market would need around 185 aircraft by then.

“Aerospace is one of the high-potential sectors for developing Bangladesh-France ties, in line with Prime Minister Sheikh Hasina’s aviation hub vision. Due to its geographic location, Bangladesh can play a pivotal role in connecting Europe and Asia,” Ambassador Masdupuy added. 

Her Excellency stated that the Bangladeshi government has already undertaken multiple infrastructure projects, including with the leading company Thales, which is supplying the new Air Traffic Management (ATM) system to Dhaka International Airport. Noting down areas of concern, she emphasized, “Extension of ATM systems to regional airports, improvement of security and cybersecurity for airports, or enhancement of weather forecasts are other areas of cooperation that I believe could be further addressed.”

In addition, “Bangladesh’s first satellite, Bangabandhu-1, was supplied in 2018 by Thales Alenia Space. In this sector, Airbus Defence and Space has signed a letter of intent in early September with Bangladesh Satellite Company Limited for the Earth Observation Program Bangabandhu-2,” the current French Ambassador shared.

French car manufacturers, Peugeot and Renault, have already established operations in Bangladesh, catering to the growing middle-income class. While the market for brand-new cars remains small, there is potential for assembly and manufacturing in Bangladesh for both domestic and regional markets in the medium term. Ambassador Masdupuy thinks, “It is still very risky to set up manufacturing plants, in particular for European players. But in the medium-run, I see a lot of potential for assembly and manufacturing in Bangladesh for the domestic as well as regional markets.”

The Ambassador highlighted that Bangladesh has started exporting agricultural products to the European market with the successful shipment of lychees to Paris earlier this year. “In 2022, Bangladesh exported to the French market only 35 million euros of agro-products, mainly shrimps. In return, Bangladesh bought 38 million euros worth of products from France, mostly machinery, equipment, live poultry, animal health, and dairy products from French companies,” Ambassador Masdupuy stated. 

Despite both countries being major agricultural nations, investment and trade in the agriculture sector remain limited. However, efforts are underway to change this, with opportunities like the “Sommet de l’Elevage” taking place this year with more than 1500 exhibitors from 35 countries, providing a platform for exposure to French agricultural know-how. 

In the realm of technology and innovation, Ambassador Masdupuy acknowledged the potential for French investment in Bangladesh’s hi-tech parks. Airbus’ involvement in the sovereign earth-observation satellite project is a testament to this. Besides, with 29 unicorns and 13.5 billion euros raised by its startups in 2022, France and “La French Tech” have a unique experience to share with the vibrant Bangladeshi ecosystem of startups.

As we aim to become Smart Bangladesh by 2041, Ambassador Masdupuy believes new infrastructure and technologies, as well as skills and knowledge transfer, are needed to materialize this transition in all sectors of the economy. “In this matter, France has a lot to offer, in particular in education, to contribute, for instance, to the Sheikh Hasina Institute of Frontier Technology (SHIFT),” she added.

Finally, Ambassador Masdupuy highlighted the role of the French Development Agency (AFD) as a significant development partner for Bangladesh. AFD has been actively involved in various projects, with a strong focus on climate and poverty mitigation. Projects totaling around one billion euros are currently under preparation, primarily in the water and sanitation, power, and energy sectors. 

“In terms of development, the French Development Agency (AFD) became one of the major bilateral development banks in only a decade. Its portfolio stands today at 1.7 billion euros of commitments. This amount tripled in just 4 years, underscoring the excellent cooperation with Bangladeshi authorities,” the Ambassador unveiled. 

In conclusion, the evolving economic relationship between France and Bangladesh holds great promise for both nations. The upcoming trade and investment summits in Europe are poised to play a vital role in strengthening these ties, furthering economic growth, and fostering mutual development. As Ambassador Masdupuy aptly noted, “The potential is immense, and the future looks bright for our business ties.”