Net foreign direct investment (FDI) inflows to Bangladesh fell by 28.06 percent in the first six months of this year. Net FDI inflows totalled $794.25 million during the period, down from around $1.1 billion in the same period last year, representing a year-on-year decline of approximately $309.94 million, according to the latest statistics from Bangladesh Bank.
A breakdown of FDI components shows that net equity capital, or fresh investment, fell from $345.17 million in the first half of 2025 to $155.68 million between January and June this year.
Over the same period, net inflows of inter-company loans declined from $399.56 million to $34.74 million, while reinvested earnings rose from $359.46 million to $603.83 million.
Existing foreign investors are showing a tendency to reinvest. But leaders and representatives of organisations representing foreign investors in Bangladesh believe concerns over the business environment, energy supply and policy implementation are holding back efforts to attract new investment.
Mohammad Iqbal Chowdhury, vice-president of the Foreign Investors’ Chamber of Commerce & Industry (FICCI), told Bonik Barta: “The most important priority now is to create a suitable environment for existing foreign investors so that they can invest again. If existing investors don’t invest, new FDI won’t come. If they see that the regulatory environment introduced by the government is moving in a positive direction, it’ll be relatively easier for them to persuade shareholders to approve reinvestment.”
Leaders of organisations representing foreign investors said rapid improvements in the energy sector weren’t possible overnight, but a clear roadmap and strategy were essential to ensure energy-efficient and predictable supply. This would enable manufacturing industries to procure raw materials and produce goods at competitive costs.
Investors believe that although the government’s top leadership has adopted a pro-investment stance and the budget has seen positive changes, these have yet to be adequately reflected at the implementation level.
Existing foreign investors have also raised concerns over the tax policies and procedures of the National Board of Revenue (NBR). They allege that, in an effort to achieve its target of 45 percent revenue growth this year, the NBR is reviewing the records of the past 10 years of taxpayers who have complied with regulations under the old system, creating additional tax burdens.
FICCI had proposed setting up a research department to assess the size of industries by sector, their revenue potential and companies’ market shares. Investors believe that placing additional pressure on regular taxpayers could discourage new foreign investment.
They also noted that investment decisions by multinational companies take time, as such companies have opportunities to invest in various locations around the world and choose destinations based on predictable policies, a business-friendly environment and low costs.
Investors expect that if the government’s policy changes are effectively implemented on the ground, existing investors will be encouraged to reinvest and interest among new investors will also grow.
Invest Bangladesh, meanwhile, said in a press release issued yesterday that net FDI rose by 12.78 percent year-on-year to $346.94 million in the April–June quarter of 2026. Reinvested earnings by foreign investors were the main driver of this growth.
But net FDI stood at $447.31 million in the first quarter of this year. By comparison, net inflows in April–June fell by approximately 22.5 percent from the January–March quarter.
According to Invest Bangladesh, reinvested earnings rose by 55.08 percent year-on-year to $260.91 million in the April–June quarter, while net equity capital fell by 4.77 percent to $77.42 million. Net inflows of inter-company loans also declined by 85.17 percent to $8.61 million.
Nahian Rahman Rochi, member (investment development) at Invest Bangladesh, said: “Looking at the 28 percent decline in the first half of 2026 alone doesn’t give us the full picture. Net FDI rose by nearly 13 percent year-on-year in the April–June quarter. The first-half comparison was largely affected by an unusually high base in the January–March quarter of 2025. Net FDI more than doubled in that quarter, with a substantial share coming from intra-company loans, which were much higher than normal.”
“Bangladesh’s FDI base remains relatively small. Consequently, the timing of one or two large transactions can naturally cause significant fluctuations in quarterly or half-yearly figures. So, our main objective isn’t to manage the figures for any particular quarter, but to consistently improve the fundamentals of the investment climate,” he also said.
In a press release, he noted, “Despite global economic uncertainty, geopolitical tensions and high energy prices, foreign investment in Bangladesh is showing positive growth. But attracting new equity investment remains challenging as investors maintain a cautious stance amid global uncertainty.”
He added that the growth in profits reinvested by existing foreign investors indicated their confidence in the long-term prospects of their businesses in Bangladesh.
Rochi said Invest Bangladesh was working to address fundamental weaknesses in the investment climate and turn projects worth $1.3 billion in its investment pipeline into actual investments.
Development work on the Chinese Economic and Industrial Zone project was progressing, with completion targeted for 2028, expected to attract around $500 million in potential investment, he added.