Once the dominant source of foreign direct investment (FDI) in Bangladesh, the United States saw its share of total FDI stock plummet from roughly 22% ($3.3 billion) in 2016 to just 5.36% (~$1 billion) by late 2025—a period during which Chinese capital expanded sevenfold to become the nation's top FDI source.
However, a rapid succession of diplomatic moves marks a major strategic pivot.
Following high-level discussions between US Special Envoy for South and Central Asian Affairs Sergio Gor and Prime Minister Tariq Rahman, a revised US travel advisory, and an upcoming visit by 45 senior executives representing 25 major US corporations, the bilateral economic relationship is poised to shift from traditional buyer-supplier ties toward high-value investment partnerships.
US FDI stock declined from ~$3.3 billion (22% of total) in 2016 to ~$1 billion (5.36%) by late 2025 due to past political uncertainty, foreign exchange bottlenecks, and profit repatriation delays.
The US remains the largest single export destination for Bangladeshi readymade garments (RMG)—driven by major buyers like Walmart, Target, Gap, PVH, and VF Corporation—yet direct US industrial capital inflows lagged.
Beyond traditional oil, gas, and LNG infrastructure, future US investment targets agriculture logistics (soybean, cotton, and wheat cold-chain warehousing), pharmaceuticals (FDA testing protocols), cloud computing/data centers, and renewable energy.
Envoy Sergio Gor indicated Bangladesh could partner in the US "Pax Silica" initiative (launched December 2025), opening avenues for AI, semiconductor component manufacturing, and critical technology supply chains.
Active talks are underway to leverage the US International Development Finance Corporation (DFC) for private sector infrastructure, digital systems, and clean energy financing.
US-Bangladesh Investment Evolution
Legacy Anchor (2016) ──▶ Oil, Natural Gas Exploration, & LNG Supply
Structural Constraints ──▶ FX Crisis, Policy Instability, Repatriation Friction
Future Horizon (2026+) ──▶ "Pax Silica" (AI/Semiconductors), Agri-Logistics, & IT
Dimension | Legacy Position (Pre-2026) | Emerging Framework (2026 Onward) |
Share of Total FDI Stock | Dropped from 22% ($3.3B) in 2016 to 5.36% (~$1B) | Projected resurgence driven by 25-company delegation |
Core Sector Focus | Fossil fuels, power, and buyer-centric RMG sourcing | Agri-warehousing, IT/Cloud, Pharma (FDA), Semiconductors |
Global Tech Alignment | Minimal high-tech presence | Potential partnership in "Pax Silica" (AI/Critical Minerals) |
Institutional Finance | Traditional commercial loans & multilateral aid | DFC-backed development finance & private equity |
Easing Risk Perception | Constrained by travel alerts and policy uncertainty | Positive US Travel Advisory revision signaling investor confidence |
"The resurgence of investment interest from major global powers like the United States is overwhelmingly positive," stated Zaid Bakht, former senior researcher at the Bangladesh Institute of Development Studies (BIDS).
"However, policymakers must maintain a clear distinction between foreign direct investment (FDI) and debt-financed development. FDI brings job creation, technology transfer, and export diversification with zero sovereign debt burden. When foreign loans are necessary for infrastructure, Bangladesh must prioritize multilateral institutions—such as the World Bank, ADB, IDB, and Jica—over single-country bilateral loans. Multilateral funding is more transparent, carries lower political leverage, and avoids strategic or policy conditionalities that can compromise long-term economic sovereignty."
"The visit of 45 senior executives from 25 leading US corporations is a critical confidence-building milestone," noted Mohiuddin Rubel, founder & CEO of Bangladesh Apparel Voice and former BGMEA Director.
"While the US is already our largest single RMG export market, the relationship must evolve beyond simple trade. With global buyers actively diversifying their supply chains, Bangladesh has a golden window to attract US capital into high-value manufacturing, logistics, R&D, and AI-driven services. To convert this diplomatic momentum into actual factory floors and data centers, the government must guarantee policy predictability, fast-track port handling, reliable energy, and seamless profit repatriation."
Prerequisites for converting interest into capital
According to Unctad data, Bangladesh attracted just $1.8 billion in total FDI in 2025—an underperformance relative to its status as South Asia's second-largest economy.
To ensure the upcoming US Investor Summit in Dhaka yields binding commitments, analysts urge immediate structural reforms:
- Guaranteeing transparent mechanism for foreign firms to repatriate dividends and profits without FX liquidity delays.
- Providing uninterrupted industrial gas/electricity supply and fast-track land allocations through EZs (Economic Zones).
- Enforcing rule-of-law in dispute resolution, modernizing customs procedures, and streamlining FDA-aligned pharmaceutical testing.
- Maintaining balanced economic ties with the US, China, Japan, the EU, and South Korea to prevent over-reliance on any single power.
