The volume of trade among SAARC countries remains the lowest among regional alliances globally, primarily due to political complexities and trade barriers. According to a recent report by Bangladesh Bank, only 4.47 percent of Bangladesh’s annual exports are directed to SAARC member states, reflecting the limited trade integration within the region.
Bangladesh’s Trade Performance in SAARC: Bangladesh’s trade with SAARC countries remains subdued, both in terms of exports and imports. The report reveals that 15.44 percent of Bangladesh’s total imports come from SAARC nations. However, this figure has been on a steady decline since the 2021-22 fiscal year.
Despite trade constraints, India remains Bangladesh’s largest trading partner within the SAARC bloc. Bangladesh mainly exports ready-made garments, jute, and frozen food products to India and other SAARC nations, while importing raw materials, machinery, and consumer goods.
India’s Trade AdvantageIn contrast, India enjoys a significantly higher trade surplus within SAARC. India’s exports to SAARC countries far exceed its imports, with Bangladesh being one of its largest export destinations in the region. Indian goods, including textiles, automobiles, and agricultural products, dominate the Bangladeshi market, contributing to India’s trade surplus.
Bangladesh Bank’s report also examines other financial factors such as expatriate income and foreign direct investment (FDI) between SAARC nations. The data indicates that while India benefits more from trade, Bangladesh gains in areas like remittance inflows from expatriates working in SAARC nations.
The Future of SAARC Trade: Trade experts emphasize the need for stronger economic cooperation and tariff reductions to improve trade among SAARC countries. Political stability and improved connectivity could enhance Bangladesh’s trade prospects within the region. As Bangladesh prepares for its post-LDC economic transition, increasing trade with SAARC countries could play a vital role in diversifying its export destinations and reducing trade dependency on specific markets.
Bangladesh Imports More Than It Exports: Dhaka, March 12, 2025: According to a recent Bangladesh Bank report, Bangladesh exported goods worth $1.7438 billion to SAARC countries in the 2023-24 fiscal year, while its imports from these countries totaled $9.7625 billion. Despite geographical proximity, trade among SAARC nations remains minimal, with only 5 percent of their total trade occurring within the region-making South Asia the least connected region in the world in terms of trade.
Bangladesh’s Trade Dynamics with SAARC Countries: The report highlights that Bangladesh’s largest trade partner within SAARC is India. Approximately 90 percent of Bangladesh’s total exports to SAARC nations go to India, while 92.19 percent of its imports from the region come from India. In the 2023-24 fiscal year, Bangladesh exported goods worth approximately $1.56 billion to India, followed by $621 million to Pakistan, $550 million to Sri Lanka, $433 million to Nepal, $142 million to Afghanistan, $9.1 million to Bhutan, and $41 million to the Maldives.
On the import side, Bangladesh imported $9 billion worth of goods from India, $40 million from Bhutan, $1.9 billion from Afghanistan, $630 million from Pakistan, $4.23 billion from Nepal, $3.5 billion from the Maldives, and $75.9 million from Sri Lanka.
Key Export and Import ProductsBangladesh exports a diverse range of products to SAARC countries, including:
India: Textiles, animal and vegetable oils, raw leather, plastic, rubber, shoes, minerals, and machine parts.
Pakistan: Textiles, chemicals, plastics, rubber, basic metals, and shoes. Sri Lanka: Chemicals, industrial products, pulp, plastics, rubber, shoes, machinery, and machine parts. Afghanistan: Chemicals, textiles, prepared foods, spirits, and vinegar.
Bhutan: Food, vinegar, tobacco, minerals, and plastics.
Nepal: Food, beverages, textiles, chemicals, industrial products, plastics, rubber, and minerals.
Maldives: Food, beverages, spirits, vegetables, textiles, and auxiliary products. Expatriate Income and Foreign Direct Investment (FDI)Remittance inflow from SAARC countries to Bangladesh remains low, contributing less than 1 percent of Bangladesh’s total expatriate income.
In the 2023-24 fiscal year, Bangladesh received $23.91 billion in remittances, of which only $82.9 million came from SAARC nations. The Maldives accounted for 69 percent of this amount, while India contributed 23 percent.
Similarly, SAARC countries accounted for only 16.2 percent of the total foreign direct investment (FDI) in Bangladesh in the same fiscal year. Out of the $1.47 billion in total FDI, approximately $240 million originated from SAARC nations.
Challenges and Prospects for SAARC Trade Growth: The Bangladesh Bank report suggests that trade between SAARC countries could increase if transactions were conducted in local currencies. However, despite their close geographical proximity, significant differences in trade policies and regulatory frameworks act as major barriers to regional trade expansion. To enhance trade within South Asia, experts emphasize the need for stronger economic cooperation, harmonized trade policies, and infrastructural improvements that facilitate smoother cross-border transactions.
