Kazuiki Kataoka is country and chief representative of the Japan External Trade Organization (JETRO). He has also recently taken over as president of the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI). Kataoka recently spoke to Bonik Barta about the prospects for Japanese investment in Bangladesh, the gap between investment interest and actual investment, and the investment environment. The interview was conducted by Badrul Alam.

Bangladesh-Japan relations have now reached the level of a strategic partnership. In your view, where lies the greatest opportunity to take the economic and trade relationship to the next level?

Thank you very much for the question. As you can imagine, Bangladesh is entering a new stage of development. The number of middle-class households is increasing, and you have a large young population. At the same time, Japanese companies are looking for new markets abroad. I see a very strong opportunity to connect these two needs. Japanese companies can provide not only high-quality products, but also capital and technology, while Bangladesh can provide a large, attractive domestic market.

The key thing is to create an environment where existing Japanese companies can expand their businesses or reinvest their profits, and where new companies are motivated to invest in this country. So we need such investment, and we have great potential to take the relationship to the next level.

And are we on the right track to grab those opportunities?

Of course, I think so.

The EPA (Economic Partnership Agreement) is Bangladesh’s first. Beyond tariff preferences, what new realities do you believe this agreement could create for trade and investment between our two countries?

Firstly, I’m really happy to see that Japan reached an agreement with Bangladesh. This is Bangladesh’s first EPA, and the two countries reached the agreement in February. The EPA is very important, but not simply because it will reduce tariffs or maintain LDC status. Bangladesh is ready to graduate from LDC status, but because of the EPA, it can retain preferential treatment in Japan. It’s not only about tariffs. It can change the way companies think about Bangladesh and Japan as business partners.

For Bangladesh, the EPA can provide an important framework for integrating the country into international value chains. For Japanese companies, greater productivity and improved market access make this country more attractive when they compare it with other investment destinations such as India, Vietnam and Indonesia. Thanks to the EPA, Bangladesh can be more competitive.

I’d like to emphasise that the benefits of the EPA don’t come automatically from the agreement itself. Business people need to understand the rules and be able to use them effectively. From now on, we need opportunities for capacity building and good implementation. Otherwise, companies won’t use the EPA.

But so far, how is the implementation going?

It hasn’t become effective yet. Both countries are preparing or finalising the domestic procedures needed to bring it into effect. From the business side, most companies, both Japanese and Bangladeshi companies that do business with Japan, are looking forward to seeing the domestic procedures finalised in both countries and the agreement taking effect as soon as possible.

JETRO survey shows strong interest among Japanese companies in expanding their business in Bangladesh, while Bangladesh Bank data shows Japanese FDI remained below $500 million as of December 2025. From your perspective, what is the main reason for this gap between interest and actual investment?

According to the data, there might be some gap, but I don’t think there is a fundamental contradiction between the high level of Japanese interest in Bangladesh and the relatively limited investment. I believe there is definitely strong Japanese interest in Bangladesh.

In the last survey, it was 57 percent...

Yes, it’s undoubted. But when Japanese companies make investment decisions, they require a high level of confidence. They’d like to see the situation regarding energy supply, infrastructure, customs clearance and taxation. Interest is different from an investment decision. From my perspective, I expect that by solving the challenges that existing companies are facing, the Bangladesh government can convert interest into confidence, and confidence into investment. The current government is making a lot of effort to improve the investment climate, but I would like to see changes that convert interest into confidence and confidence into investment. It takes time, but the interest is there. Hopefully, investment will grow further in the future.

Experience of Japanese companies already operating in Bangladesh is perhaps the strongest basis for building confidence among prospective investors. What is one change Bangladesh should make now to further strengthen their confidence?

My answer might be a little bit abstract, but I would like to see greater predictability in the investment environment. Particularly, Japanese companies generally take a long-term perspective, five years, 10 years or 20 years. They’d like to ensure that the rules of the game remain reasonably predictable. Over the past few years, we have had political transitions. Last year or two years ago, we couldn’t ensure political and social stability, so some companies waited for the right time to invest in this country. Greater predictability is really important.

Any real incidents where companies were waiting?

For example, this year, after the new government came to power in February, top executives of Japanese companies have come to Bangladesh over the past several months. That didn’t happen last year. Probably they could see somewhat greater predictability in politics and society. As I mentioned, there is already an attractive domestic market here, so they started coming to Bangladesh for feasibility studies or to make investment decisions. The situation is definitely improving.

Japanese companies such as Toyota and other major Japanese groups have a significant presence in Bangladesh, but large-scale manufacturing investment remains limited. What would it take to see companies like Toyota move beyond sales and distribution into manufacturing and a deeper local supply chain in Bangladesh?

As I said earlier, we have an attractive domestic market. The market is very important for business, but in terms of large-scale manufacturing, again, we require a stable electricity supply, a reliable gas supply, predictable customs clearance and appropriate taxation. It takes time, and we need a manufacturing ecosystem. My personal opinion is that the Bangladesh government’s priority should be to build the right conditions for a manufacturing ecosystem. Once companies establish local operations, they can develop workers and technology, creating a good cycle. We need to go through some phases, but it will come in the future. Firstly, I’d like the government to focus on policies to improve the ecosystem. Then large-scale manufacturing will also come.

Amid a changing geopolitical landscape, Bangladesh is seeking to maintain balanced relations with different partners. From Japan’s perspective, does this approach create greater economic opportunities for Bangladesh or does it present new challenges?

I can answer very clearly. A balanced relationship can create significant economic opportunities for Japanese investors. Bangladesh is in a very important location and has relations with different partners and neighbouring countries. If we can ensure a balanced relationship, Japanese companies might become interested in accessing neighbouring countries. A balanced relationship with different partners contributes to greater business opportunities, at least for Japanese investors.

Looking at initiatives such as BIG-B, the Matarbari development and the Araihazar Economic Zone together, what role do you envision for Bangladesh in Japan’s long-term regional economic strategy?

Bangladesh is located in a strategically important place. Projects like the Araihazar Economic Zone, Matarbari Deep Sea Port and BIG-B initiative are connected to each other. We would like Bangladesh to play a more important role in connecting with neighbouring countries and also within the country. Bangladesh has a very attractive domestic market and a strategic location. We already see the potential for Bangladesh to play a pivotal role in such matters.

As a professional living and working in Bangladesh, what experience has changed your personal perception of Bangladesh the most?

The first day I arrived in Bangladesh was my first time coming here. Before coming, I was aware of Bangladesh as a production base and an attractive domestic market. But after coming here, I saw many ambitious and energetic professionals, entrepreneurs and government officers. I was surprised by how easily they adopt new technologies and by their curiosity about new businesses and lifestyles. I saw great potential that I couldn’t see when I was in Japan.

What are your expectations for the future of Japanese investment in Bangladesh?

There is strong interest from Japanese companies in Bangladesh. The number of Japanese companies operating in Bangladesh is around 350, and it will continue to increase. This country is not only a production base but also a potential market for domestic consumers. Many companies are conducting feasibility studies. I would like the Bangladesh government and companies to welcome increased investment by Japanese companies. We’d like to strengthen our partnership, and JETRO will play a pivotal role in making it successful.

Mr. Kazuiki Kataoka, thank you again.

Thank you very much.