Bangladesh-Malaysia FTA seen as gateway to ASEAN exports
Bangladesh’s trade with Malaysia remains heavily imbalanced, but business leaders and policymakers say a Free Trade Agreement (FTA) could unlock new opportunities in Malaysia and across ASEAN.
Wide trade gap
According to the Export Promotion Bureau (EPB), Bangladesh exported goods worth $293.51 million to Malaysia in the 2023–24 fiscal year, while imports from Malaysia stood at $2,604 million. That left bilateral trade at $2.9 billion, with the balance overwhelmingly in Malaysia’s favour.
Most of Bangladesh’s exports to Malaysia come from the ready-made garment sector, accounting for $188 million of the total. Other promising sectors — including agro-processed products and frozen foods — remain underutilised, mainly due to tariffs as high as 30 percent.
By contrast, rival countries such as India and Pakistan already enjoy duty-free or reduced tariffs through bilateral agreements.
Industry calls for tariff relief
Business leaders argue that an FTA would significantly improve competitiveness.
Ahsan Khan Chowdhury, Chairman of PRAN-RFL Group, said: “The biggest obstacle to exporting goods from Bangladesh to Malaysia is the lack of any trade agreement. Due to this, we are lagging behind India, Pakistan and China. If we can export PRAN products duty-free, we will be able to compete and capture the Malaysian food market. That alone could increase our exports fivefold.”
Selim Bhuiyan, Managing Director of Pinnacle Foods — the sole distributor of PRAN products in Malaysia — echoed the call: “We have to pay 30 percent more duty than competitors. With an FTA, we can reduce prices and secure larger orders. Malaysia is the most suitable gateway for expanding into the ASEAN region.”
Bhuiyan noted that if an FTA is signed, Bangladesh’s export earnings could rise sharply within three to five years.
Government stance and negotiations
Officials say discussions have already begun. A draft terms of reference for FTA negotiations has been prepared.
Mosammat Shahanara Monika, Acting High Commissioner of Bangladesh to Malaysia, said: “Our market potential in Malaysia is huge, but tariffs and regulations make it difficult to compete. There has been progress in FTA talks, and formal negotiations may begin in mid-2025. There is no alternative to an FTA if we want to increase exports in line with competing countries.”
She added that Bangladesh could also address the trade gap through the services sector.
EPB Director General Baby Rani Karmakar confirmed that EPB and Malaysia’s trade promotion body MATRADE have signed an MoU to cooperate on information exchange, fairs, and trade missions.
“By leveraging MATRADE’s experience, Bangladesh will be able to compete in agro-processed products, pharmaceuticals, SMEs and halal food,” she said.
Potential in ASEAN
Malaysia imported 117.44 billion ringgit worth of consumer goods in 2024, accounting for 8.6 percent of total imports, according to MATRADE. The annual growth rate of consumer goods imports was 12.8 percent, creating opportunities for exporters.
Business leaders stress that Malaysia’s role as a regional hub could allow Bangladeshi companies to re-export and form partnerships across the ASEAN bloc of 660 million people.
Mahbub Alam Shah, Director of the Bangladesh–Malaysia Chamber of Commerce, said: “Competitors succeed because they already have trade agreements. For Bangladesh, product diversification and halal certification will be crucial to expand into Malaysia and ASEAN.”
Jute products, processed food, frozen fish, halal food, pharmaceuticals, plastics, and eco-friendly goods are seen as key areas for growth alongside garments.
Pran’s market presence
PRAN products already enjoy strong visibility in Malaysia. A visit to supershops such as Mydin, Hanifa, Giant Hypermarket, KK Mart and NSE shows Bangladeshi goods well placed on shelves. PRAN currently supplies 4,500 outlets across the country.
“If tariff barriers are lifted, we can expand to nearly every supershop in Malaysia and reduce the trade deficit,” Bhuiyan said.
At the 21st Malaysia International Halal Showcase (MIHAS) held in Kuala Lumpur on September 17-20, PRAN received orders worth $1.5 million and showcased nearly 500 food products, ranging from juices, biscuits and confectionery to noodles, sauces, chocolates and basil seed drinks. The exhibition featured 2,300 stalls from 90 countries, with a special focus on Korean noodles, biscuits and halal beverages.
Two Malaysian superstores have already confirmed they will add PRAN products displayed at MIHAS to their shelves.
The bottom line
While Bangladesh’s current exports to Malaysia remain small and tariffs steep, an FTA is widely seen as the key to breaking into Malaysia’s market and, by extension, ASEAN. With negotiations expected to begin in mid-2025, business leaders and government officials agree that the agreement could transform Bangladesh’s export landscape.