WELCOME

TO OUR
PRESENTATION

GROUP L
OUR TOPIC

FOREIGN
DIRECT
INVESTMENT
(FDI) IN
BANGLADESH :
CHALLENGES &
WAYOUTS
 Supervised by
Dr. Md. Ashraful Alam
Associate Professor
Institute of Social Welfare & Research
University of Dhaka
 Group Participants
EXAM ROLL NAME
16228 Md Rihad Miah
16232 Farhana Faria
16243 Md. Ripon
16264 Nasrin Akter
16277 Arif Istiaque Hossain
16280 Syeda Musharrat
 CONTENTS

 Concept of FDI
 Types of FDI
 Importance of FDI
 Advantages of FDI
 Disadvantages of FDI
 Present Situation of FDI in Bangladesh
 Incentive Packages in Bangladesh for FDI
 Challenges of FDI
 Recommendations
 CONCEPT OF FDI

Foreign Direct Investment are substantial, lasting investments made by a

company or government into a foreign concern.

According to UNCTAD, “FDI is an investment involving a long-term

relationship and reflecting a lasting interest and control by a resident
entity in one economy (foreign direct investor or parent enterprise) in an
enterprise resident in an economy other than that of the foreign direct
investor (FDI enterprise or affiliate enterprise or foreign affiliate)”
According to OECD, “Foreign direct investment is a category of cross-
border investment made by a resident in one economy (the direct investor)
with the objective of establishing a lasting interest in an enterprise (the
direct investment enterprise or affiliate) That is resident in an economy
other than that of the direct investor.”

“FDI is a particular form of the flow of capital across international

boundaries, from home countries to host countries.”(Lipsey,2002)
According to Richard E. Caves, “ FDI Is a category of international investment that
reflects the objective of the investors obtaining a lasting interest in an enterprise
resident in another economy.”

For example, Telenor group invest in Bangladesh as Grameenphone Ltd. and started
its operation on March 1997. Telenor hold 55.8% ownership share in Grameenphone.
 TYPES OF FDI

FDI can be mainly classified into three types :

I. Horizontal FDI
II. Vertical FDI
III.Conglomerate FDI
IV.Platform FDI
 IMPORTANCE OF FDI

FDI has a significant impact on various sectors of the economy and

contributes to overall growth, employment general, technology transfer and
infrastructure development.

 Economic Growth
 Agricultural Sectors
 Infrastructural Development
 Transfer of Technology
 Foreign Exchange Flows
 Employment Opportunities
 ADVANTAGES OF FDI

 Economic Growth
 Human Capital Development
 Technological Development
 Increase in Experts
 Exchange Rate Stability
 Improved Capital Flow
 Creation of A New Capital Market
 Rise in Exports
 Leads to The Creation of A New Market
 Helps in Combating Climate Change
 Stimulates Economic Development
 DISADVANTANGES OF FDI

 Hindrance of Domestic development

 Risk from Political changes
 Negative Exchange Rates
 Higher Costs
 Economic Non-Viability
 Modern Day Economic Colonialism
 Poor Performance
 Disappearance of Cottage Industries
 Contribution to Pollution
 Cultural Erosion
 Convertibility of Currency
 Political Corruption
 PRESENT SITUATION OF FDI IN BANGLADESH

Foreign direct investment (FDI) in Bangladesh rose by 12.9% to $2.9 billion

– around the pre-pandemic level – in 2021. Meanwhile, outward FDI from
Bangladesh rose nearly seven times to $92 million in 2021. The condition is
very positive if compared with our neighbouring countries .
Sl No. Sector FDI inflows Percentage
(in million (%)
USD)
1 Manufacturing 1238.27 36
2 Power, Gas and Petroleum 768.31 22.3
3 Trade and Commerce 682.11 19.8
4 Services 315.65 9.2
5 Transport, Storage and Communication 273.33 7.9
6 Construction 112 3.3
7 Agricultural and Fishing 41.31 1.2
8 Other Sectors 8.65 0.3
Total 3439.63 100

Table : FDI Inflows by major sectors in FY 2022(in Million USD)

Figure: FDI Inflows by major sectors in FY 2022(in Million USD)
Sl Countries FDI inflows(in Percentage(%)
No. million USD
1 USA 661.12 19.2
2 China 465.17 13.5
3 UK 383.96 11.2
4 Singapore 300.58 8.7
5 South Korea 215.97 6.3
7 Hong Kong 179.22 5.2
7 Norway 173.45 5.0
8 Netherlands 160.24 4.7
9 Japan 122.72 3.6
10 India 106.83 3.1
11 Other countries 670.73 19.5
Total 3439.63 100

Table: FDI Inflows by major countries in FY 2022(in Million USD)

Figure: FDI Inflows by major countries in FY 2022(in Million USD)
 INCENTIVE PACKAGES FOR FDI IN BANGLADESH

 Tax Holiday And Exemptions

 Exemptions On Import Duties
 Double Taxation Regimes
 Capital Repatriation
 Tariff Reduction
 Accelerated Depreciation
 Ownership
 CHALLENGES

 Political Unrest
 Corruption
 Insufficient Power Supply
 Taxation Systems
 Lack Of Expertise And Research
 RECOMMENDATIONS

 Ensure good governance

 Coordinate government agencies
 Dynamic and independent government agencies
 Accountability and transparency
 Developing dynamic relationships
 Devoting efforts to shift FDI tracks
 Political reformation
 Ensuring power and energy
THANK YOU