JETRO Country Representative Kazuiki Kataoka. File photo

DHAKA, Aug 29, 2026 (BSS) - Japan External Trade Organization (JETRO) Country Representative Kazuiki Kataoka said political and social stability following Bangladesh's February 2026 general election has encouraged Japanese companies to reassess the country's market potential and investment opportunities.

In an interview with BSS, Kataoka said political and social instability had been one of the major concerns for Japanese investors under the interim government. 

The establishment of a new government following the election, however, has provided companies with greater scope to formulate medium- and long-term business plans and consider investment decisions, he added.

According to JETRO's FY2025 Survey on Business Conditions of Japanese Companies Operating Overseas, 94.4 percent of Japanese companies operating in Bangladesh identified "unstable political and social conditions" as an investment risk.

The figure was almost unchanged from 94.8 percent in the previous year, indicating that political and social stability remained a major concern for Japanese businesses, he said.

"Greater stability makes it easier for companies to formulate medium- and long-term business plans and make investment decisions," Kataoka said.

He noted that JETRO has recently observed an increase in visits to Bangladesh by senior executives of Japanese companies from their headquarters in Tokyo and regional offices such as Singapore.

"I believe that one factor behind this trend is that, with political and social conditions becoming more stable, more companies are reassessing Bangladesh's market potential and business opportunities," he said.

However, Kataoka cautioned that political stability alone would not automatically lead to a significant increase in investment.

He stressed the need for continued improvements in the day-to-day business environment, particularly in taxation and customs clearance, licensing and permits, and the transparency of laws and regulations.

Regarding the future of Bangladesh-Japan economic relations, Kataoka said the two countries should move beyond traditional development cooperation and build a stronger trade- and investment-driven partnership.

He also emphasized that economic relations should not be limited to Japanese investment in Bangladesh.

"Economic relations should not be limited to investment from Japan into Bangladesh. We would also welcome investment from Bangladeshi companies into Japan," he said.

"To further develop economic relations between the two countries, it is important not only to promote investment in one direction, but also to expand investment and business transactions by companies from both countries and build a relationship that generates mutual economic benefits," Kataoka added.

He said Japanese companies have shown increasing interest in Bangladesh's domestic consumer market, particularly in Dhaka.

Citing a survey by the Dhaka Chamber of Commerce and Industry (DCCI), Kataoka said Dhaka accounts for approximately 46 percent of Bangladesh's GDP, while its per capita income exceeds US$5,000.

Alongside Bangladesh's population of around 180 million, rising income levels in Dhaka are making the capital increasingly attractive as a consumer market, he said.

Kataoka pointed to the growing number of cafes, restaurants and other businesses in Dhaka offering higher levels of quality and service as an indication of rising demand for quality products and services.

He also noted that Bangladesh's relatively high tariff rates can make imported products expensive.

"As a result, some Japanese companies are considering entering the market not simply through exports, but by combining local production with local procurement," he said.

He identified food and consumer goods as sectors that could offer increasing opportunities for Japanese companies as domestic demand expands.

The combination of Bangladesh's large population, rising consumer demand and potential for local production could provide a stronger basis for Japanese investment in the coming years, he said.

At the same time, Kataoka reiterated that sustained efforts to improve the business environment would be crucial to translating growing investor interest into actual investment commitments.