For over a decade, governments have been allocating a disproportionately low share of the budget to renewable energy despite ambitious pledges, with nearly all power and energy allocations going to fossil fuel projects, a Centre for Policy Dialogue (CPD) study has found.

The study, unveiled at an event jointly organised by CPD and Dhaka Stream at Pan Pacific Sonargaon Dhaka yesterday, comes just weeks before the BNP-led government, which has signalled a push toward clean energy, is set to unveil its first full budget. The study was co-authored by Khondaker Golam Moazzem, research director of CPD.

Presenting the findings, Khalid Mahmud, programme associate at CPD, said the allocation trend from fiscal year 2015-16 (FY16) to FY26 shows fossil fuel projects consistently capturing over 90 percent of power and energy development spending.

The budget for the ongoing FY26 showed marginal improvement, with renewable energy receiving 4.6 percent, yet fossil fuel-based projects still dominated at over 95 percent, reflecting what he called limited structural rebalancing, he said.

Mahmud added that the FY26 budget also dropped a Tk 100 crore allocation for renewable energy that had been included the previous year, and introduced no new incentives for solar or other clean technologies.

Bangladesh’s total installed renewable energy capacity stands at approximately 1,745 MW as of May 11, with solar unit accounting for over 83 percent of that. In total, renewables represent just 5.4 percent of total installed capacity, well short of a target set years ago to reach 10 percent by 2021.

The compound annual growth rate of renewables from 2016 to May 2026 is 15.78 percent. Of 42 active development projects, only three focus on renewable energy.

Despite the wind energy potential in the coastal region, wind power installation remains very low, accounting for only about 62 MW, said Mahmud, noting that renewables in Bangladesh continue to remain constrained within the national budget framework.

“The national budget must treat renewable energy not as a sub-line within the Power Division, but as a strategic national investment priority deserving its own fiscal instrument,” said Mahmud.

The government should restore and progressively scale up ADP allocations for renewables from FY27 onward, pegged to annual MW deployment targets, he added.

Also speaking at the event, Rashed Al Mahmud Titumir, finance and planning adviser to the prime minister, said the energy sector is caught in a vicious cycle that is difficult to escape.

He also pointed out that the wide gap between installed generation capacity and actual utilisation has led to significant waste through capacity charges.

“This mismatch is leading to a significant waste of public resources, most notably through capacity charges. While capacity is built to meet expected future demand, much of it remains underutilised in practice, an issue clearly reflected in Bangladesh’s experience,” he said.

“Many of the contracts in this sector were not concluded in full compliance with established rules and procedures, yet they have been given legal protection. This raises serious concerns from the perspective of transparency and fairness,” he added.

The PM’s adviser went on to point out that instead of transitioning toward a sustainable system, the country has largely continued to rely on a fossil fuel–dependent structure. “Together, these three issues form the core structural challenges of the sector.”

Without addressing these deep-rooted problems, it will not be possible to break free from the current cycle, he said, adding that resolving the crisis will require collective and coordinated action.

Rehan Asad, the PM’s adviser on telecom and ICT, said land scarcity is a major constraint on large-scale renewable deployment, citing risks to crop production from ground-mounted solar.

Hence, he said the government is prioritising rooftop solar solutions. “The government is taking a broader approach, planning renewable energy development in line with the overall energy ecosystem.”

Iftekhar Mahmud, editor-in-chief at Dhaka Stream, raised concerns about the sector’s integrity, saying large-scale renewable projects are increasingly being dominated by groups linked to the fossil fuel industry, including individuals accused of land grabbing and money laundering.

Local innovators and specialist institutions are being sidelined, while genuine entrepreneurs must navigate approvals from as many as 32 government departments, he added.

He said this difficult process discourages real investors and creates opportunities for influential groups more interested in land acquisition and bank loans than energy production.

The cost of the project to build transmission infrastructure for supplying electricity from the Rooppur Nuclear Power Plant (RNPP) has been reduced by Tk 23.30 billion under a revised proposal after some expensive components were removed from the original design, officials said.

The project, titled "Development of Transmission Infrastructure for Power Evacuation of Rooppur Nuclear Power Plant", will now cost Tk 86.52 billion, down from the original estimate of Tk 109.82 billion.

At the same time, the implementation deadline for the project has been extended until June 2026.

The Planning Commission has recommended approval of the first revised proposal at a meeting chaired by Dr Nurun Nahar Chowdhury, member (secretary) of the Industry and Energy Division of the Planning Commission.

According to officials, the revised cost represents a 21.22 per cent reduction from the original estimate, resulting in significant savings for the government.

The project is being implemented by Power Grid Bangladesh PLC.

Under the revised financing plan, Tk 60 billion will come from the Indian line of credit (LOC), Tk 14.57 billion from the government of Bangladesh and Tk 11.71 billion from PGCB's own funds.

Officials said the sharp reduction in project cost was mainly achieved by dropping several costly components from the original project design.

One of the major changes was the exclusion of a planned 20-kilometre river-crossing transmission line over the Padma and Jamuna rivers after its estimated cost became exceptionally high during the bidding process.

The component will now be implemented separately under a domestic project.

In addition, delays in land acquisition and GIS substation construction led to the removal of the 230kV Dhamrai substation expansion from the Indian LOC funding package.

Despite the reduction in overall project cost, officials said the revised budget had to absorb higher foreign exchange costs during implementation.

The original project proposal in 2018 was prepared based on an exchange rate of Tk 80.83 per US dollar, while the revised budget considered an average exchange rate of Tk 103.79 per dollar.

Officials noted that although the project cost in dollar terms declined due to the removal of several components, the depreciation of the local currency offset part of the savings.

The extension of the project deadline will allow Power Grid Bangladesh PLC to complete the remaining high-voltage transmission lines, including the 150km Rooppur-Dhaka line and the 155km Rooppur-Gopalganj line, ensuring smooth transmission of nuclear power to the national grid.

Stocks opened the week on a negative note as renewed selling pressure dragged down key indices on the Dhaka Stock Exchange (DSE) today (17 May), reversing gains from the previous three sessions amid the absence of strong market catalysts.

The benchmark DSEX index plunged 19 points to settle at 5,226, while the blue-chip DS30 index declined 11 points to close at 1,970.

Market breadth remained negative, with 228 issues declining compared to 119 advancing and 45 remaining unchanged, reflecting a broadly bearish sentiment among investors.

Turnover also took a hit, dropping by 13% to Tk868 crore, indicating reduced participation as cautious investors opted to stay on the sidelines.

According to EBL Securities PLC, the market retraced into correction territory after a brief recovery phase, as sustained selling in major stocks continued to weigh on overall sentiment.

The session began on a relatively stable note, with indices hovering near the flatline in early trading. However, as the day progressed, selling pressure intensified across large-cap stocks, pushing the market into negative territory and extending the weakness observed toward the close of the previous session, it added.

Market analysts pointed to the lack of a decisive trigger to sustain the recent upward momentum in the selective stocks, leading investors to book profits and adopt a more defensive stance.

Heavyweight stocks such as Beximco Pharmaceuticals, Eastern Bank, BAT Bangladesh, NCC Bank and City Bank emerged as major index draggers, contributing significantly to the day's decline.

On the sectoral front, pharmaceuticals dominated turnover, accounting for 14.5% of total market activity, followed by general insurance at 14.2% and engineering at 12.7%.

Despite this activity, most sectors posted negative returns. Services suffered the steepest decline, falling 2.0%, followed by IT, which dropped 1.2%, and life insurance, which lost 1.1%.

In contrast, a few sectors managed modest gains, with non-bank financial institutions rising 4.2%, jute advancing 0.8%, and travel edging up 0.5%.

Among individual stocks, NCC Bank, Bangladesh National Insurance, Dominage Steel, Asiatic Laboratories and Techno Drugs topped the turnover chart, reflecting active investor participation in these counters.

The day's top gainers included Global Heavy Chemicals, which surged 10%, followed by Investment Corporation of Bangladesh, National Feed Mill, SK Trims, and Appollo Ispat, all posting notable gains of over 9%.

On the losing side, Apex Spinning led the decline with an 8.72% drop, followed by Apex Tannery, GSPO Finance, Peoples Leasing and Fareast Finance, all registering significant losses.

Meanwhile, the Chittagong Stock Exchange (CSE) also ended in the red. The CSCX index fell 33 points to 9,031, while the broader CASPI index declined 39 points to settle at 14,675. Turnover at the port city bourse stood at Tk32 crore, mirroring the subdued trading activity seen in Dhaka.

The government is planning to form a capital market reform commission to bring transparency and restore investor confidence, according to officials at the Ministry of Finance.

The decision was taken at a recent budget-related meeting. It forms part of the ruling BNP’s broader commitment to reviving the capital market, which featured in the party’s election manifesto.

Ministry officials said the commission will work toward overall market reform, with the government also planning to focus on building a stronger bond and equity market.

Besides, the government is also planning to take steps towards ensuring the use of blockchain technology, create an investment gateway for non-resident Bangladeshis, and attract greater foreign investment.

The meeting was informed that Dhaka Stock Exchange’s (DSE) market capitalisation has dropped by Tk 33,000 crore, or 4.4 percent, between January 2024 and February 2026.

The bourse’s benchmark index, the DSEX, fell from 6,153 to 5,600 points in the same period.

The move follows reform efforts under the interim government, which had formed a five-member taskforce to recommend changes to the stock market.

The taskforce, after extensive stakeholder consultation, proposed amendments to several securities rules, many of which the Bangladesh Securities and Exchange Commission (BSEC) has since adopted.

In a successor note before leaving office, former finance adviser Salehuddin Ahmed said the BSEC was restructured after the interim government assumed office, and an external investigation committee was formed to look into 12 irregularities from the previous regime.

A taskforce was also formed that worked on reforming three major rules regarding margin loans, mutual funds and public offering issuance, he added.

Apart from these, another committee was formed to strengthen the BSEC and improve the capital market which also submitted a report including recommendations.

The recommendations were sent to relevant ministries to implement, Ahmed added in the note.

Bangladesh Bank (BB) has introduced a monthly performance review system to strengthen the implementation of the Bangladesh Bank Service Standard, aiming to improve efficiency, accountability, and service delivery across all operational units.

The decision was taken at the inaugural performance review meeting held on Sunday with Governor of Bangladesh Bank Md Mostaqur Rahman in the chair. Deputy governors and executive directors attended it.

The service standard framework sets mandatory timelines for processing and resolving cases across all departments and branch offices, serving as a key benchmark for operational efficiency and service quality.

During the review, 90 departments and branch offices were assessed based on compliance with service standard timelines. The findings showed that 41 units (45.56 percent) achieved 100 percent compliance, while 32 units (35.56 percent) maintained around 90 percent compliance.

In addition, 11 units recorded compliance between 80 and 89 percent, and 6 units fell within the 67 to 79 percent range.

Overall, more than 81 percent of the evaluated units were found to be performing at a high compliance level, although around one-fifth of the offices demonstrated notable efficiency gaps requiring targeted intervention.

The Governor directed that performance reviews be conducted on a monthly basis under his direct supervision to ensure continuous monitoring and timely corrective measures.

He instructed all departments and branch offices to strictly adhere to service standard guidelines and ensure that all cases are processed within the prescribed timeframe, emphasizing that 100 percent compliance should be the institutional benchmark.

At the same time, he assured full institutional support to units facing difficulties, particularly in addressing procedural and operational bottlenecks affecting service delivery.

BB said the combined approach of strict accountability and supportive intervention is expected to enhance overall institutional performance and improve public service delivery standards.

The UAE is to fast-track construction of a new oil pipeline bypassing the Strait of Hormuz, official media said on Friday, after the Middle East war crippled exports through the vital waterway.

The West-East Pipeline will double state oil giant ADNOC’s capacity through Fujairah port and is expected to become operational next year, the Abu Dhabi Media Office said.

Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan “directed ADNOC to accelerate delivery of the project”, the report said.

An existing, 360-kilometre (224 miles) pipeline from the Habshan oil fields to Fujairah has a capacity of 1.8 million barrels per day, according to the Port of Fujairah website.

The UAE, which made waves by quitting oil cartel OPEC at the start of this month, has plans to raise production capacity to five million barrels a day by next year.

Oil facilities in Fujairah have been repeatedly struck during the Middle East war. Three Indian nationals were wounded in the latest attack on May 4.

Dhaka Stock Exchange and Swisscontact Bangladesh have signed a memorandum of understanding (MoU) to promote sustainable and inclusive economic development through Bangladesh’s capital market system, with a special focus on SMEs and sustainable financing instruments.

The agreement was signed on Saturday at the DSE premises by Managing Director Nuzhat Anwar and Swisscontact Bangladesh Country Director Helal Hossain in the presence of senior officials from both organisations.Geographic Reference

Under the partnership, the two organisations will jointly work to strengthen SME access to capital markets, improve corporate governance and compliance standards, and promote sustainable financing initiatives in Bangladesh.

The collaboration will focus on strategic sectors including ready-made garments (RMG), healthcare and agriculture, while also supporting initiatives related to environmental, social and governance (ESG) practices, sustainability reporting, financial inclusion, climate resilience, entrepreneurship development, trade facilitation and skill enhancement, says a press release.

Speaking at the signing ceremony, Ms Anwar said the initiative was implemented quickly through strong coordination and clear planning between the two institutions.

“This initiative has been materialised within a short period because of mutual coordination and a shared vision,” she said.Bangladesh trade analysis

She noted that small and medium enterprises require extensive support in capacity building, governance practices and regulatory compliance to enhance their participation in the capital market.

“SMEs are one of the key drivers of the economy, but many of them still lack the institutional preparedness required to access long-term financing from the capital market,” Ms Anwar said.

She added that the partnership would help create a stronger ecosystem for SMEs by offering training, advisory services and awareness programmes aimed at improving financial literacy and governance standards.

Mr Hossain of Swisscontact Bangladesh said SMEs remain a vital pillar of Bangladesh’s economy, although they continue to face challenges in financing, competitiveness and compliance.

“In the current economic context, creating opportunities for SMEs to raise alternative financing and equity-based capital is extremely important,” he said.Global economy forecast

He expressed optimism that the collaboration with DSE would help promising SMEs gain access to the capital market and reduce their dependence on traditional bank financing.

According to officials, the partnership will also facilitate joint capacity-building programmes, incubation support, workshops and advisory services to encourage wider participation in the capital market ecosystem.

The two organisations will additionally cooperate in developing sustainable financing products, including green bonds, sustainability-linked bonds, sukuk and blended-finance models to support environmentally and socially responsible investments.

Market analysts say the collaboration comes at a time when Bangladesh’s capital market is seeking to diversify financing sources and deepen participation from SMEs and sustainable enterprises.

They believe the initiative could help strengthen the country’s sustainable finance framework and support long-term economic resilience through broader access to capital market financing.

This year has so far brought no relief to listed multinational companies (MNCs), with earnings declining in the first quarter compared to the same period last year as inflation has not let up.

Persistently high inflation, squeezing consumer demand, and rising operating costs due to increases in the costs of raw materials and energy have complicated the business environment for foreign firms operating in Bangladesh.Business strategy consulting

This is the backdrop to subdued economic activity. Sluggishness in business has been deepening since the political changeover in August 2024, while inflationary pressure has continued to erode consumers' purchasing power and corporate profitability, according to market analysts.

During the January-March quarter, things turned worse amid geopolitical tensions surrounding the US-Israel conflict involving Iran, which disrupted global energy supply chains.

Inflation hovered around 9 per cent during the quarter, and analysts warned that price pressures may persist in the coming months due to continuing global uncertainties, supply disruptions and elevated import costs.

Of the 13 multinational firms listed on the stock market, 11 have so far disclosed first-quarter financial results for 2026. Only four of these companies posted profit growth, while four others reported profit declines ranging from 12 per cent to 34 per cent.

Two other companies remained in the red due to heavy debt burdens, and one slipped into fresh losses.Economic trend analysis

Aggregate profits of the 11 firms fell 6 per cent year-on-year to Tk 12.20 billion in January-March this year, while combined revenue declined 4 per cent year-on-year to Tk 103 billion, according to company disclosures.

Marico Bangladesh and Berger Paints follow the April-March accounting year.

Md Akramul Alam, head of research at Royal Capital, said that apart from macroeconomic challenges, tight monetary and fiscal measures adopted by the Bangladesh Bank following the political transition had dampened economic activities.

Private sector credit growth remained weak at around 6 per cent early this year, reflecting poor business confidence and tighter lending conditions.

Mir Ariful Islam, managing director and CEO of Sandhani Asset Management, said multinational companies failed to achieve meaningful revenue growth at a time when consumers had little disposable income.

"Consumers cut back on discretionary spending as essential goods became more expensive," he said, adding that many companies were unable to pass rising costs on to consumers due to weakened purchasing power.

As multinational firms operate across diverse sectors, the reasons behind profit erosion vary from company to company.Politics

Higher finance costs heavily affected firms carrying large debt burdens, while reduced government spending under the Annual Development Programme adversely affected cement manufacturers.

Singer Bangladesh, for example, saw its losses widen 66 per cent year-on-year to Tk 578 million in the January-March quarter due mainly to a 41 per cent surge in finance costs linked to heavy borrowings.

The company attributed the weak performance to sluggish demand in the consumer electronics market, where domestic sales were hurt by inflation, geopolitical tensions, the national election and an extended Eid holiday.

Singer is also facing intensifying competition from local manufacturers such as Walton Group and Vision Electronics, alongside imported brands.

BAT Bangladesh posted a 34 per cent decline in profit to Tk 2.10 billion as lower sales and rising finance costs hit earnings. Net revenue plunged 23 per cent during the quarter through March.

The cigarette maker's domestic sales dropped 21 per cent, while leaf exports fell 23 per cent in the first quarter this year compared to the same quarter last year.Financial literacy course

Meanwhile, reduced government spending under the Annual Development Programme adversely affected cement manufacturers, according to Mr Alam. The overall construction sector remained under pressure due to high inflation and weaker infrastructure activity during the quarter.

Heidelberg Materials Bangladesh slipped into a loss of Tk 50 million in the March quarter, compared with a profit of Tk 197 million a year earlier, after sales dropped 16 per cent.

The company said higher prices of key raw materials squeezed margins, while intense competition prevented it from fully passing additional costs on to customers.

Another cement maker, LafargeHolcim Bangladesh, reported a 19 per cent year-on-year decline in profit to Tk 1.12 billion in the quarter as sales fell 6 per cent amid elevated inflation, tighter private sector credit and slower public infrastructure spending.

Rising energy costs linked to the Middle East crisis and persistent inflationary pressures reduced profitability, although operational efficiency and strict cost discipline helped cement makers preserve margins.Economic trend analysis

"Despite a challenging landscape defined by persistent inflation and higher energy costs, we remain committed to resilience through innovation and operational excellence," said Iqbal Chowdhury, chief executive officer of LafargeHolcim.

Fast-moving consumer goods companies also struggled with low sales as households prioritised essential food spending over discretionary purchases.

Unilever Consumer Care reported a 12 per cent year-on-year decline in profit, while Reckitt Benckiser Bangladesh posted a 28 per cent drop in earnings during the quarter compared to the corresponding period last year.

Masud Khan, chairman of Unilever Consumer Care, attributed the weaker business performance to macroeconomic and seasonal factors.

"A depressed economy, the national election and Ramadan all contributed to pressure on sales and margins," he said.

However, Bangladesh's two leading telecom operators managed to post profit growth through cost efficiency and stronger data revenue.Business strategy consulting

Grameenphone recorded revenue of Tk 37.6 billion in the January-March quarter, down 2 per cent year-on-year. Despite lower revenue, net profit rose 4.4 per cent due to improved cost management and lower finance costs.

Yasir Azman, chief executive officer of Grameenphone, said the company maintained stable financial and operational performance despite external challenges.

Robi Axiata posted an 86 per cent surge in profits, supported by strong revenue growth and disciplined cost management.

Ziad Shatara, managing director and CEO of Robi, said higher revenue was driven by robust growth in data usage and increasing numbers of 4G users.

Linde Bangladesh also reported a 36 per cent growth in profit, driven by higher sales and an 18 per cent decline in operating expenses following the divestment of its subsidiary last year.

Similarly, Bata Shoe posted marginal profit growth, supported mainly by Eid-centric seasonal sales, although overall retail demand remained weak.

Mr Ariful Islam of Sandhani Asset Management warned that corporate profits could remain under pressure over the next two quarters due to the ongoing energy crisis stemming from Middle East tensions.Financial literacy course

"Macroeconomic improvement and restoration of consumer confidence are crucial for business recovery in the coming months," said Mr Alam of Royal Capital.

Bangladesh is preparing another round of tariff rationalisation in the next fiscal year, cutting or easing protective duties on more than 200 imported goods, as part of a wider effort to modernise the trade system ahead of graduation from least developed country (LDC) status.

Under this plan, customs duties, regulatory duties and supplementary duties of the items are likely to be rationalised, according to finance ministry officials.

Last year, the government proposed cuts on around 350 tariff lines in the first phase of a broader reform programme. The upcoming budget for fiscal year 2026-27 is expected to continue that process.

Officials said the changes are designed to bring the trade system closer to global standards and prepare for the post-LDC era starting from November this year.

“We are continuing the process of tariff rationalisation to make the structure more competitive, transparent and compliant with international trade obligations,” said a senior official involved in the process.

Preferring anonymity, he also said that despite the planned reductions, sensitive sectors would continue to receive a degree of protection to allow local industries time to adjust to increased competition from imports.

According to finance ministry officials, Bangladesh will face more pressure to reduce trade barriers after the LDC graduation, as the country will lose several preferential trade benefits under the current international arrangements.

They also said the reforms are being designed in consideration of Bangladesh’s commitments under the World Trade Organization and ongoing talks on future trade agreements.

Bangladesh currently has 7,611 tariff lines. In other words, the country has 7,611 different product categories for which import taxes are set separately.

Its binding commitments at the World Trade Organization (WTO) cover 955 tariff lines, including 763 agricultural and 192 non-agricultural products. Tariffs on 60 of these lines were higher than the bound rates set when Bangladesh joined the WTO in 1995.

The National Board of Revenue (NBR) began tariff rationalisation in phases in FY23, following recommendations from a committee formed in 2021 to prepare for LDC graduation challenges.

In the past two years, tariffs on 60 items have been brought within bound rates based on those recommendations.

A related study also called for a review of supplementary and regulatory duties, noting that Bangladesh would need to compete without relying on import protection after graduation.

The study found regulatory duties on 3,565 tariff lines, about 47 percent of the total, ranging from 3 to 35 percent. Nearly 95 percent of revenue from regulatory duties comes from just 250 tariff lines.

Based on the recommendations, the NBR scrapped regulatory duties on 282 items between FY23 and FY25 and removed minimum import prices on 50 items.

Speaking on the implications of the country’s scheduled LDC graduation this year, trade expert Mostafa Abid Khan said that oversight was limited while Bangladesh remained an LDC, but that would change.

“But once we graduate, we will come under surveillance.”

He said the transition would not automatically force Bangladesh to change its policies, but verification from trading partners would increase.

He pointed out two immediate risks. These are exceeding agreed tariff limits on a small number of products and maintaining minimum import prices.

“In some cases, not many, only for a limited number of products, our bound tariff rates have already been exceeded,” said Khan.

He said, “Another issue is the minimum import value or minimum import price system. That cannot be maintained. It will not be allowed.”

He said Bangladesh must gradually lower protection and prepare industries for competition under future trade agreements.

M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said Bangladesh’s post-LDC challenge will centre on a sharp loss of trade competitiveness with the ending of preferential market access.

He said the impact of higher tariffs will largely depend on productivity and efficiency in the economy.

“Competitiveness comes from productivity, lower costs of doing business, and logistics efficiency, including speed to market,” he noted, adding that Bangladesh is currently weak in both productivity and competitiveness.

He also warned that the pharmaceutical sector will come under pressure after the loss of TRIPS-related flexibilities, particularly due to limited API production, weak backward linkages and patent constraints, which could push up medicine costs.

Reaz stressed that long-term reforms are essential, especially investment in skills, technology adoption, logistics and trade facilitation.

“Ideally, these reforms should have started five years ago, but they did not. We are still ignoring them. But this is a golden opportunity, and I would say almost the last opportunity.”

He said reforms should begin gradually from the next budget cycle, rather than being delayed or introduced abruptly after graduation.

Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said that the timing of graduation, whether soon or later, does not change the need for preparation.

“Whether LDC graduation happens in November or three years later, the government should identify the programmes needed and allocate resources accordingly,” he said.

Like Reaz, Razzaque highlighted the need for infrastructure and logistics reforms.

“Important infrastructure will be needed, and we must clearly define what is required. Implementation of the logistics policy will be essential, with clear responsibilities and timelines,” he added.

Calling for a structured approach, he said the transition should be guided by clear milestones.

“There should be a roadmap for what we want to achieve in the next one year, and in the next two years. A priority list has been prepared, and if implemented effectively, it could be a positive step,” he added.

Dhaka division received nearly half of Bangladesh's total remittance inflows in March 2026, ahead of Chattogram and Sylhet divisions, according to a Bangladesh Bank (BB) report.

The division accounted for $1.85 billion, or 49.55 percent of the $3.75 billion that flowed in during the month — up $456.58 million, or 13.85 percent, from March 2025.

Chattogram division ranked second with $1.16 billion (31.03 percent), followed by Sylhet at $301.10 million (8.02 percent), according to BB’s Monthly Report on Workers' Remittance Inflows.

BB noted that inflows typically rise during religious festivals, at the end of the fiscal year in June, and at the close of the calendar year in December.

At the district level, Dhaka topped the list with $1.35 billion, ahead of Chattogram ($413.04 million), Cumilla ($243.40 million), and Sylhet ($161.13 million).

Bangladesh’s ambition to become a $1 trillion economy by 2034 is bold, inspiring and politically powerful. It reflects confidence in the country’s development journey and its desire to emerge as a major economic force despite evolving challenges. For a nation transformed through decades of resilience, the goal naturally captures the public imagination. Yet while the slogan is compelling, the economics behind it are more complex.

The economy is currently valued at about $470 billion. To reach $1 trillion within a decade, Bangladesh needs close to 10 percent annual GDP growth in dollar terms. That is where the difficulty lies. GDP measured in US dollars depends not only on domestic production growth, but also on inflation and exchange rate stability.

The distinction matters. If Bangladesh achieves 5 percent real growth and 7 percent inflation, the economy could expand by roughly 12 percent in nominal taka terms. But if the taka loses 3 percent of its value against the dollar each year, dollar-based GDP growth falls to about 9 percent, below what is required. In simple terms, Bangladesh may grow strongly at home yet still struggle to hit the trillion-dollar target if currency depreciation continues.

This makes the exchange rate policy central to the debate.

The Bangladesh Bank (BB) is already navigating a delicate balancing act. It must rebuild foreign exchange reserves after they fell sharply from $48 billion in 2022, while preserving export competitiveness. A weaker taka helps exporters, particularly the ready-made garments sector, remain competitive. But the same weaker currency reduces the economy’s size in dollar terms.

This creates a policy trilemma. Bangladesh cannot fully maximise three objectives at once: a strong currency, export competitiveness and reserve accumulation. A stronger taka may lift GDP in dollar calculations, but would hurt exports. A weaker taka supports exports and reserve rebuilding but delays the trillion-dollar milestone. At any given time, policymakers can effectively prioritise only two.

Global conditions further complicate matters. Rising geopolitical tensions and volatile oil prices increase import costs, strain reserves and fuel inflation. As an energy-importing economy, Bangladesh remains exposed to external shocks that can weaken the taka and disrupt growth projections.

None of this makes the trillion-dollar goal unrealistic. It does mean the path must rest on structural reform rather than political arithmetic.

The real route to a trillion-dollar economy lies in productivity growth. Bangladesh must diversify beyond garments into sectors such as pharmaceuticals, IT services, electronics, light engineering and higher-value services. Greater industrial depth, stronger foreign direct investment and technological upgrading are essential. Without this transformation, growth may continue, but not at the scale or quality required.

Human capital is equally important. Skills development, better education and higher labour productivity must become national priorities. A larger economy is not built by numbers alone; it is built by a more capable workforce.

Macroeconomic discipline will also matter. Inflation control, stable fiscal management and a predictable exchange rate policy are crucial. Gradual and manageable depreciation may prove wiser than abrupt adjustments or artificial currency support.

Ultimately, the trillion-dollar question is not simply whether Bangladesh can reach a number by 2034. It is whether the country can build an economy strong enough to make that number inevitable.

If Bangladesh sustains solid growth, preserves stability and implements meaningful reforms, it could approach $900 billion by 2034 and cross $1 trillion soon after. Reaching the milestone in 2035 instead of 2034 would not be a failure; it would be economic realism.

The true success of Bangladesh’s strategy will not be measured by a political deadline alone, but by whether it builds productive strength, resilience and institutional capacity, alongside a governance model capable of sustaining prosperity long after the trillion-dollar headline is achieved.

The writer is an economic analyst and chairman at Financial Excellence Limited

G7 finance ministers gathering in Paris on Monday will try to find common ground on tackling global economic tensions and coordinating critical raw material supplies, even as geopolitical differences threaten to test the group's cohesion.

The two-day meeting follows a summit between US President Donald Trump and Chinese President Xi Jinping in Beijing that yielded few concrete economic breakthroughs, as tensions over Taiwan and trade simmered beneath a display of diplomatic cordiality.

At the core of the Paris agenda will be what French Finance Minister Roland Lescure described as deep-seated global economic imbalances that are fuelling trade friction and risk a turbulent unwinding in financial markets.

"The way the global economy has been developing for the past 10 years or so is clearly unsustainable," he said, pointing to a pattern in which China under-consumes, the United States over-consumes and Europe under-invests.

Update from US-China summit

Lescure, who will host the talks, said the G7 offered an opportunity for frank dialogue among allies at a time of widening disagreements with Washington.

"These discussions are not easy. I'm not going to tell you that we agree on everything, including, of course, first and foremost with our American friends," he told journalists ahead of the meeting.

Finance ministers will be looking for an update on US-China relations following the Trump-Xi summit and the latest US efforts to re-open the Strait of Hormuz, as the Trump administration allowed a sanctions waiver on Russian seaborne oil to lapse on Saturday.

Merely agreeing each side bears some responsibility for the trade and capital flow imbalances would be a success, French officials involved in preparations said, though the US side is likely to be reluctant.

Fallout from Mideast conflict

"I'd be shocked if they're going to sign on to the idea this is the US's fault in some way," said Philip Luck, director of the economics programme at Washington's Center for Strategic and International Studies.

Ministers are also due to discuss the economic fallout from the Mideast conflict and volatility on global bond markets, which are of particular concern to Japan.

Britain's finance ministry said Rachel Reeves would "press for coordinated action to limit inflation and supply chain pressures, and restore freedom of navigation through the Strait of Hormuz" at the meeting, and also reassert the government's desire to reduce trade barriers between Britain and the European Union.

Divisions within the G7 complicate efforts to project unity as ministers prepare for a 15-17 June leaders summit in the spa town of Evian.

Critical mineral dependence

A second priority will be critical minerals and rare earths, where G7 governments are trying to coordinate efforts to reduce reliance on China, which dominates supply chains vital for technologies such as electric vehicles, renewable energy and defence systems.

Lescure said the G7 would push for stronger coordination to monitor markets, anticipate disruptions and develop alternative supplies, including through joint projects spanning allied economies. The aim is to ensure that "no country can ever again have a monopoly" over such materials, he said.

G7 countries are trying to agree on a common toolbox of measures to stabilise markets and encourage domestic investment, possibly through price floors for producers, pooled purchases and also tariffs.

Nonetheless, the initiative is a long-term project that would yield little at the finance ministers' meeting, said Luck, who worked on the issue in the Biden administration.

"We are in the very early innings of figuring this out," he said. "I don't think there's agreement on a strategy even within the US government, let alone being able to articulate that in a convincing way to our partners in order to get them to sign on."

India is scrambling to salvage a sinking rupee as surging oil prices linked to the Middle East conflict threaten to disrupt the world’s fastest-growing major economy.

The currency has dropped more than five percent since the crisis erupted in February, extending losses from 2025 and making it Asia’s worst-performing major currency in 2026 so far.

It hit a record low of over 96 to the dollar on Friday, prompting officials to signal that halting further depreciation is a key macroeconomic priority.

India’s central bank has already poured billions of dollars to stabilise the currency, curbed speculative trading and offered a special credit line to oil importers to ease dollar demand.

Prime Minister Narendra Modi has also urged voluntary austerity measures to rein in dollar-guzzling imports, including cutting down on gold buying and foreign travel for a year.

But the pressure persists.

“The whole system has been disturbed,” said Dilip Parmar of stockbroker HDFC Securities, citing heavy foreign investor outflows, weaker growth prospects and elevated crude prices.

“That is the basic problem which you’re seeing replicated in the fall of the rupee,” he said, noting that it was ultimately “a function of demand and supply” with dollar demand being higher.

The rupee’s slide comes as India faces a widening current account deficit driven by costly energy imports.

The gap is likely to be over two percent of GDP this fiscal year, more than double last year’s level and potentially the widest since 2012–13, according to Bank of America Securities estimates.

WIDENING DEFICIT

At the same time, foreign investors have dumped more than $20 billion in Indian stocks since the start of the Mideast conflict, the fastest pace on record, while dollar inflows have slowed, opening the possibility of a balance-of-payments gap as large as $67–88 billion.

The 2027 fiscal year “will be our third year of a balance-of-payment deficit, which is certainly unusual,” economist Dhiraj Nim of ANZ Research told AFP.

This strain has weighed on the rupee, prompting the central bank to defend it by burning through foreign exchange reserves -- now at around $697 billion, down from over $720 billion before the Middle East war.

While still covering about 11 months of imports, the decline underscores the strain.

A weaker rupee is rippling through the domestic economy.

Manufacturers and food processors, many dependent on imported raw materials priced in dollars, are seeing costs surge.

Smaller firms often lack the ability to hedge currency risks.

In Kerala’s cashew industry, which mostly imports raw nuts from Africa, the impact has been acute.

“Imports have become far more expensive for the local market,” said Rajmohan Pillai, who runs a cashew firm, adding buyers can now afford only about 90 percent of last year’s volumes.

He estimates more than 80 percent of processing units have shut in recent years, with rupee volatility a contributing factor.

‘LAST STRAW’

India’s currency decline has also hit students looking to study abroad.

Education consultants say studying in the United States now costs more than one million rupees ($10,450) extra compared with a year ago.

“This is the last straw,” said Meghna Sen, a 17-year-old aspiring psychology student.

“Now we have to track (the rupee) movement to check how much we need for our grocery budgets.”

The depreciation has punctured India’s ambition to become the world’s third-largest economy.

Modi, who once criticised his predecessors over currency weakness, has seen India’s global economic ranking dented because GDP comparisons are measured in dollars.

The country has slipped behind the United Kingdom to the sixth place according to IMF data, largely due to the rupee’s fall.

Nomura analysts warn more drastic measures may be on the anvil.

These include possible fuel price hikes, tighter controls on overseas remittances and steps to attract dollar deposits from non-resident Indians -- a playbook used in past crises.

Still, economists caution that intervention can only smooth volatility, not reverse underlying pressures.

“Fundamental factors” remain to be resolved, Nim said, adding “I would not even rule out an interest rate hike which squarely targets future inflation”.

The Reserve Bank of India knows what its options are, he said.

“All that remains is to see what it decides to choose.”

Royal Footwear Limited, a footwear manufacturing and export-oriented company, is planning to raise Tk12 crore from the capital market through the SME platform to support its business expansion and meet rising export demand.

The company has recently re-submitted its application to the Bangladesh Securities and Exchange Commission (BSEC) to issue 1.2 crore shares under the fixed-price method through an Initial Qualified Investor Offer (IQIO).

Earlier, in 2024, Royal Footwear had applied for the same fundraising plan. However, the company later withdrew its Initial Qualified Investor Offer (QIO) proposal, citing political uncertainty, the ongoing economic slowdown, and an overall unstable business environment that was not favourable for expansion at that time.

As the business climate has improved now, the company has decided to revive its fundraising plan and move forward with the application again to support its expansion and take advantage of growing export opportunities.

As a synthetic shoe manufacturer, Royal Footwear intends to utilise the funds for business expansion, working capital, and loan repayment.

Specifically, the allocation includes, Tk2 crore for purchasing raw materials and packing materials, Tk1.67 crore for the purchase of spare parts, Tk8 crore for loan repayment, and Tk0.33 crore for IQIO expenses.

Royal Footwear Limited shares some common directors with Al-Madina Pharmaceuticals, a publicly listed company on the SME platform. In February 2023, Al-Madina Pharmaceuticals raised Tk5 crore through the SME platform to support business expansion. In FY25, the company declared a 12% cash dividend for its shareholders.

According to Royal Footwear, the company—incorporated in 2014—plans to enter the capital market to expand its operations and strengthen compliance standards. The management says that some of its international buyers have encouraged listing in the capital market, believing it would improve governance, compliance practices, and alignment with global standards.

The company mainly exports to European and Asian markets, where demand for its products continues to grow steadily. In addition, the management views capital market financing as a more sustainable long-term growth option compared to relying heavily on bank borrowing.

In FY25, Royal Footwear Limited reported revenue of Tk52.91 crore, up from Tk52.34 crore in the previous fiscal year. Its profit after tax stood at Tk2.78 crore, which was Tk3.19 crore a year ago.

Earnings per share (EPS) reached Tk0.82, which was Tk0.94 a year ago. Its net asset value (NAV) per share, after revaluation, was Tk27.54.

Prime Bank Investment Limited is acting as the issue manager for the IQIO.

According to the company prospectus, the footwear industry in Bangladesh is growing rapidly due to increasing domestic and international demand, competitive production costs and favourable government policies.

Opportunities lie in export expansion, modern technologies, and sustainable practices. However, challenges such as quality control, compliance with international standards, and workforce development persist.

Major competitors of Royal Footwear include Apex Footwear, Bata Shoe Company (Bangladesh), Bay Emporium, Lotto BD, Jenny's Shoes, Craftsman Footwear and Accessories, and MK Footwear PLC.

To remain competitive, companies are adopting advanced technologies such as CAD/CAM systems and automated machinery to enhance efficiency and quality. Many firms are also obtaining global certifications, such as the Leather Working Group (LWG) certification, to boost credibility.

Despite obstacles like limited access to finance, infrastructure gaps, and labour shortages, the industry is making strides in environmental sustainability.

Investments in eco-friendly production methods and effluent treatment plants are helping to address environmental concerns and align with international standards, further strengthening the industry's growth potential.

The government has approved a Nationwide Telecommunication Transmission Network (NTTN) licence for Bangla Phone, marking the first major telecom infrastructure licence approval since the formation of the new government. The company’s earlier bid was rejected by the interim government.

This makes Bangla Phone the seventh company in the country to receive this licence.

According to official documents, the approval was granted on May 13 after the Bangladesh Telecommunication Regulatory Commission (BTRC) sought government clearance on May 10.

Under existing guidelines, the licence allows operators to build, maintain and manage nationwide fibre-optic transmission networks and share infrastructure with telecom operators and internet service providers.

BTRC requires prior approval from the Ministry of Posts, Telecommunications and Information Technology before issuing such licences. In May last year, the regulator sought approval, but the interim government rejected the proposal.

After the new government took office, BTRC again sought approval from the ministry.

It remains unclear under which guideline the licence was approved, as there is no separate NTTN category in the telecom licensing policy.

The policy, approved by the BTRC and later endorsed by the interim government, is now under review by the current administration.

Under the licensing policy, NTTN falls under the category of National Infrastructure and Connectivity Service Provider (NICSP).

Major General (retd) Md Emdad Ul Bari, chairman of the BTRC, said the licence was issued under the legacy framework.

“When the licensing regime changes, the licence will be migrated accordingly,” he said.

Explaining why the BTRC recommended the licence for Bangla Phone, Bari said an inspection team found that the company, which has been operating in Bangladesh since 2004, already has a fibre-optic transmission network spanning more than 13,000 kilometres.

“As the country needs more transmission network infrastructure and the operator already has an extensive fibre network, the regulator recommended issuing the licence following its application and investigation,” a BTRC official said.

Bangla Phone first applied for the licence in June 2011, but the ministry rejected it in July 2014. After the company filed a writ petition, the High Court directed a review, although the ministry upheld its decision in June 2016.

The company reapplied in September 2024, prompting the BTRC to form a committee in January 2025 to assess the request.

The committee cited the need to expand affordable transmission networks nationwide, particularly in remote areas.

Considering the limitations of the country’s existing transmission network and Bangla Phone’s previously permitted infrastructure, the committee recommended issuing a new NTTN licence, according to the documents.

As per BTRC documents, the country’s other six NTTN operators currently manage a combined 148,000 kilometres of optical fibre network.

The country’s first NTTN licence was awarded to Fibre@Home in 2008, and the company now operates around 50,000 kilometres of network infrastructure.

Summit Communications operates approximately 40,000 kilometres of network, while Bahon Limited has 7,817 kilometres. Bangladesh Telecommunications Company Limited manages around 40,000 kilometres, and Power Grid Company of Bangladesh operates roughly 8,500 kilometres. Bangladesh Railway, meanwhile, has about 3,800 kilometres of optical fibre infrastructure.

In addition, the government has laid nearly 35,000 kilometres of optical fibre under projects such as Info-Sarker 3 and Connected Bangladesh, while mobile operators collectively operate around 8,200 kilometres of fibre infrastructure

Last year, Amjad H Khan, chairman of Bangla Phone, told The Daily Star that the company’s four licences, including an International Internet Gateway (IIG) licence, were cancelled during the previous government’s tenure.

He said the country still lacks adequate telecom infrastructure, creating opportunities for more players to contribute.

Iran will reopen its stock market on Tuesday after a suspension ‌during the conflict with the US and Israel, ​Iran's IRNA news agency ​cited a senior official ⁠as saying on Saturday.

"The ​suspension of stock market ​activities from the start of the war was aimed at ​protecting shareholders' assets, ​preventing panic-driven trading and allowing for ‌more ⁠transparent pricing conditions," said Hamid Yari, deputy supervisor at the Securities and ​Exchange ​Organisation.

"Now, ⁠with the reopening of the stock ​market, we will ​see ⁠the full resumption of all capital market sectors," ⁠he ​added.

Bangladesh plans to position itself among the world’s top 20 countries in telecom and technology services within the next five years through a holistic digital economy strategy focused on connectivity, affordable access, startup growth, electronics manufacturing and skilled human resources.

The vision was outlined by Rehan Asad, the prime minister’s adviser on telecom and ICT, at a seminar titled “Telecom future: new government's vision” organised by the Telecom and Technology Reporters' Network Bangladesh (TRNB) at InterContinental Dhaka today.

Faqir Mahbub Anam, minister for telecom and ICT, and Md Emdad Ul Bari were also present at the programme.

“We are not only aiming to become a top-20 subscriber country, we want to become a top-20 service-quality country,” Rehan said, noting that Bangladesh already ranks among the top countries globally in terms of telecom subscribers but lags behind in service quality indicators.

According to different estimates, the telecom and ICT sector’s current contribution to Bangladesh’s GDP ranges from less than 1 percent to around 6 percent, but the figure could rise to 15 percent if the government develops a supportive ecosystem around the industry, he said.

“Yes, there will be challenges … But there is no reason why this sector cannot contribute 15 percent of GDP,” he said.

Rehan said that alongside network expansion, affordable devices and digital services are needed to ensure digital inclusion.

“We are talking about 4G and 5G, but if we do not focus on devices, then 4G and 5G mean nothing,” he said.

According to him, smartphone penetration in Bangladesh remains below 50 percent, while the cheapest smartphones still cost around Tk 10,000, making them unaffordable for many low-income users.

To address this, the government is working with local manufacturers, telecom operators, banks and mobile financial service providers to produce smartphones priced between Tk 5,000 and Tk 6,000 and introduce equal monthly instalment (EMI) facilities for consumers.

“If we can enable EMI, a farmer or rickshaw puller may be able to buy a smartphone through monthly payments,” he said.

The adviser also highlighted the need for stable and predictable policies to attract investment into the telecom and technology sectors.

“One of the biggest complaints from businesses is policy unpredictability. We want to provide a five-year roadmap for VAT, tax and customs policies so businesses can plan ahead,” he said.

He acknowledged concerns over the telecom sector’s high tax burden, saying operators face effective tax rates of up to 56 percent, significantly higher than the global average.

On spectrum policy, Rehan said the government’s priority is no longer limited to maximising revenue collection.

“Our priority is creating the ecosystem, the value chain and overall economic development,” he said.

The adviser also identified AI, cybersecurity, data centres and digital governance as key pillars of the government’s future technology strategy.

“Cybersecurity is absolutely critical,” he said, adding that both the public and private sectors would need to work together to improve the country’s cyber resilience.

He also drew comparisons with countries such as Vietnam and India, saying Bangladesh has the potential to become a major electronics manufacturing and export hub if it can ensure investment-friendly policies and support for entrepreneurs.

Rehan also said the government plans to strengthen the startup ecosystem through grants, policy support and financing facilities for young innovators and entrepreneurs.

Nineteen years ago, BNP finance minister M Saifur Rahman placed a national budget of Tk 69,740 crore for fiscal year 2006-07. Three governments have since come and gone, and BNP has now returned to power through a national election.

This time, Finance Minister Amir Khosru Mahmud Chowdhury is preparing to unveil the country’s 54th budget, which may exceed Tk 9.30 lakh crore for FY2026-27.

Despite the increase in size, the budget-to-GDP ratio has not changed much over the years. In 2006-07, the budget stood at around 12.68 percent of GDP, and is set to be 13.6 percent in FY27.

This suggests that while the economy has grown significantly in size, the government’s fiscal capacity has not strengthened at a comparable pace.

Bangladesh is therefore entering a phase where the scale of public spending is no longer the central issue. The more pressing question is whether the economy can sustain a larger budget amid rising debt, weak revenue mobilisation and institutional constraints.

Over the past two decades, the country’s socio-economic condition has changed noticeably. Electricity access has expanded, rural road connectivity has improved, mobile phone use has surged and internet-based communication has reshaped daily life. Large infrastructure projects such as the Padma Bridge and Dhaka Metro Rail have altered transport patterns and boosted economic activity.

These changes have also raised expectations.

Citizens now expect uninterrupted power supply, better transport systems, modern healthcare, quality education and improved urban services.

Dhaka dwellers want more metro rail lines, while people across the country want improved highways, second bridges across Padma and Jamuna and more industrial investment. As a result, public spending commitments have increased structurally. But, at the same time, fiscal space has tightened.

A growing share of the budget is now being absorbed by just operational expenditure. Interest payments on domestic and external borrowing have risen due to higher debt levels and elevated interest rates. Subsidies in energy, power and food are also high, while the proposed implementation of a new pay commission for public employees is expected to add further recurring pressure.

These factors leave less room for development spending, even as the overall budget size expands.

Weak revenue mobilisation remains a central challenge. Bangladesh continues to have one of the lowest tax-to-GDP ratios in South Asia, which limits the government’s ability to finance development without heavy borrowing.

The financial sector adds another layer of pressure. Non-performing loans have risen due to weak governance, political interference, lending irregularities and poor recovery. A fragile banking system reduces its capacity to support private investment and economic expansion.

Government borrowing from banks has also increased, crowding out credit available to the private sector and pushing up borrowing costs for businesses. The capital market has remained shallow and volatile, offering limited support for long-term financing needs. As a result, the economy remains heavily dependent on the banking sector.

Governance concerns and corruption further complicate fiscal management.

Delays in project implementation, cost overruns and allegations of irregularities in public procurement have reduced the efficiency of public spending.

A White Paper on the State of the Bangladesh Economy under the previous interim government estimated that around $234 billion may have been laundered during the previous Awami League period.

External shocks have also shaped recent economic pressures. The pandemic disrupted trade, employment and production. The Russia-Ukraine war pushed up global food and fuel prices, feeding inflationary pressure in import-dependent Bangladesh.

Inflation has remained above 8 percent since March 2023, eroding real incomes and weakening purchasing power. At the same time, war in the Middle East has added further volatility to global energy markets, increasing risks for inflation and foreign exchange stability.

Against this backdrop, Bangladesh faces a difficult policy balance.

Growth has slowed in recent years while inflation remains elevated. Expansionary fiscal measures could support growth, but they also risk worsening debt and price pressures.

Another important dimension is the role of the International Monetary Fund (IMF) under its ongoing programme. Reform commitments are expected to focus on raising tax revenue, improving banking, reducing subsidies, strengthening fiscal discipline and increasing exchange rate flexibility. While these measures may improve long-term stability, they carry short-term political and social costs.

For the finance minister, the job is not just to present a bigger budget. It is to rebuild trust in how public money is managed while dealing with limited resources and political promises.

He will have to make difficult choices. Money will need to go either to big infrastructure projects or to areas like health, education and skills.

In the end, the budget is not only about numbers. It will show how the government plans to manage a time of high expectations, tight finances, global uncertainty and weak institutions.

The Dhaka Stock Exchange (DSE) witnessed a massive retreat by international investors in April, as a combination of escalating global geopolitical tensions and persistent domestic structural hurdles triggered a wave of heavy selling.

Data from the premier bourse revealed a stark imbalance in foreign participation, with overseas investors offloading shares worth Tk124.14 crore while injecting only a meagre Tk12.06 crore into the market.

This lopsided trade reflects a deepening sense of caution among global fund managers, who appear to be scaling back their exposure to frontier markets in favour of safer havens amidst a volatile international landscape, according to the market insiders.

The overall participation of foreign investors saw a dramatic contraction during the month. Total foreign turnover in April stood at Tk136.2 crore, which was exactly 50% lower than the turnover recorded in March.

This decline in trading volume suggests that foreign institutional investors are not only selling off their positions but are also hesitant to engage in fresh buying, leading to a significant reduction in market liquidity, said insiders.

As per DSE data, foreign investment held in 130 listed companies, out of which foreign investments trimmed in 19 companies, while increases in 14 firms. Foreign participation remained unchanged in 97 firms.

According to the Central Depository of Bangladesh Limited, the number of non-resident beneficiary owner accounts stood at 43,242 as of mid-May.

The sell-off was most pronounced in fundamentally strong, large-cap companies that have traditionally been the darlings of foreign portfolios. Square Pharmaceuticals, often considered a blue-chip anchor for the market, saw the highest volume of foreign exit, with sales amounting to Tk40.72 crore. Consequently, foreign shareholding in the pharmaceutical giant dropped from 15.33% in March to 15.11% in April. BRAC Bank followed a similar trend, with foreign investors trimming their stakes by Tk37 crore, bringing their holding down to 36.22% from 36.48%.

Other major firms such as Renata, British American Tobacco Bangladesh, Marico, and Grameenphone also experienced notable foreign outflows, reflecting a broader trend of profit-taking or risk-mitigation by international funds.

In a few extreme cases, foreign investors opted for a complete exit from certain entities. During April, international fund managers liquidated their entire remaining holdings in Ring Shine Textile and Premier Bank. Conversely, the market saw a rare entry as foreign investors picked up stakes in Bangladesh National Insurance for the first time.

On the buying side, BSRM Steels emerged as the only significant beneficiary of foreign interest, attracting Tk9.50 crore in purchases and raising its foreign shareholding from 0.25% to 0.60%. Minor increases were also noted in BSRM Limited, Prime Bank, and Envoy Textile, though these were insufficient to offset the overall exodus of capital.

Market experts and researchers attribute this sharp decline to a complex mix of external and internal factors.

A senior researcher at a leading brokerage firm noted that while there was high optimism following the national elections and the formation of a new government, the expected surge in foreign investment failed to materialise. Instead, the market was blindsided by the sudden escalation of conflict in the Middle East involving the United States, Israel, and Iran. This geopolitical instability has sent shockwaves through global energy markets, creating a climate of economic uncertainty that is particularly damaging for energy-import-dependent nations like Bangladesh.

For global investors, the risk of inflation and energy insecurity in Bangladesh, exacerbated by these international conflicts, has made the domestic equity market appear increasingly risky. These external pressures have compounded long-standing domestic issues that continue to weigh on the market's attractiveness.

Analysts emphasised that the scarcity of high-quality, well-governed firms forces foreign investors to concentrate their holdings in a very small number of stocks. When sentiment shifts, as it did in April, this concentration leads to rapid and heavy sell-offs that the local market often struggles to absorb.

Furthermore, the prevalence of "junk stocks" and companies with poor corporate governance continues to deter professional fund managers. Issues surrounding transparency, inconsistent financial reporting, and weak regulatory enforcement remain significant barriers to attracting long-term institutional capital, said a managing director of a brokerage firm.

Structural hurdles, including a complex capital gains tax regime and ongoing difficulties in the repatriation of funds, also remain cited as deterrents. While the government and regulators have introduced some policy measures to address these bottlenecks, market participants argue that the impact of such reforms has yet to be felt on the ground, he added.

According to the DSE officials, the persistent foreign sell-off serves as a wake-up call for the country's capital market regulators. As foreign investors shift their stakes from top-tier firms like City Bank, Southeast Bank, Beximco Pharma, and IDLC Finance into defensive positions or out of the country entirely, the pressure on the DSEX benchmark index continues to mount.

Sustainable financing in Bangladesh reached Tk 8,375 crore during the October-December quarter of 2025, accounting for 35.87 percent of total disbursed loans, reflecting growing momentum in the country’s sustainable finance sector, experts said.

They, however, stressed the need for blended and sustainable financing to further strengthen economic growth, tackle climate-related risks and expand social welfare initiatives.

The observations came at the “Sustainable Finance Summit 2026”, organised by LightCastle Partners with support from the Embassy of Switzerland in Bangladesh, the United Nations Capital Development Fund (UNCDF), Netherlands-based impact investment firm Truvalu Bangladesh, and Startup Bangladesh Ltd, held at a hotel in Dhaka yesterday.

Reto Renggli, Swiss ambassador to Bangladesh, inaugurated the event and said sustainable finance was no longer a niche agenda but an essential element for building an inclusive and future-ready economy.

He also praised Bangladesh’s progress in climate resilience and financial inclusion and expressed hope that the summit would help unlock investment opportunities and partnerships.

According to data presented at the event, the global sustainable finance market reached $919 billion in 2025 and is projected to expand to $1.1 trillion in 2026.

The daylong summit aimed to mobilise blended finance and expand the sustainable finance market in Bangladesh.

Masud Rahman, chief technology adviser to the Aspire to Innovate (a2i) project under the ICT ministry, attended the programme as guest of honour.

“Bangladesh stands at a critical juncture where innovation, technology and sustainable financing must advance together,” he said.

More than 200 policymakers, financiers, entrepreneurs and ecosystem stakeholders participated in the summit.

Bijon Islam, chief executive officer of LightCastle Partners, delivered a presentation, titled “From Pledges to Projects: Unlocking the Next Trillion in Sustainable Finance”.

The event also featured three panel discussions involving representatives from financial institutions, development organisations and the startup ecosystem.

Zahedul Amin, managing director of LightCastle Partners, Diepak Elmer, deputy head of mission/head of cooperation at the Embassy of Switzerland in Bangladesh; Nuzhat Anwar, managing director of Dhaka Stock Exchange; Nurul Hai, managing director of Startup Bangladesh Limited; Kerry Breen, senior director at Brummer & Partners; Nazat Chowdhury, managing director of South Asia Tech; Nabila Nowrin, managing director of Infusion Partners; among others, also spoke at the event.