Just 45 percent of all foreign investments in Bangladesh qualify as actual foreign direct investments (FDI), while the rest is either intercompany loans or reinvestments, Bangladesh Investment Development Authority (BIDA) said in a report.
The report released on Sunday said the FDI inflow has remained stagnant in recent years, contributing a mere 0.5 percent of the country's gross domestic product (GDP).
According to the statistics department of Bangladesh Bank (BB), the country received $1.47 billion as net FDI in FY24 which was $1.61 billion in FY23.
The report title "The FDI Heatmap," also highlighted the significant lack of structured investment promotion campaigns for domestic industries.
Furthermore, it said industry experts in various sectors emphasised the need for better strategic alignment between public and private initiatives.
Additionally, they urged the prioritisation of industrial development and targeted interventions by the government to unlock the country's true potential in receiving FDI, it added.
BIDA underscored the urgent need for a robust framework to attract quality investments that align with national priorities. To this end, BIDA identified 19 priority sectors for attracting FDI and driving economic growth.
These include established industries such as apparel and pharmaceuticals alongside emerging ones like renewable energy, information technology, and light engineering.
With the focus ranging from advanced textile manufacturing to agro-processing, the report showcases diverse opportunities for innovation and development.
BIDA said that by prioritising these sectors, Bangladesh could enhance its competitiveness in global markets. "This initiative aligns with the nation's vision for sustainable growth and economic self-reliance," it added.
BIDA informed that it created the heatmap as a strategic tool to facilitate FDI by addressing challenges hindering its inflow.
Drawing inspiration from global best practices, including collaborations between investment bodies and academia, the heatmap aims to align FDI efforts with Bangladesh's long-term economic goals.
BIDA outlined short-term strategies for attracting FDI, such as showcasing priority sectors, leveraging success stories in this regard, and simplifying the country's investment frameworks.
The suggested medium-term initiatives involve the development of production-linked incentives to reward measurable outcomes, including job creation and export growth.
"We need a cohesive strategy integrating public and private efforts to create an investor-friendly ecosystem," BIDA said in its report.