What Bangladesh wants from Japan and why Japan needs Bangladesh
Prime Minister Tarique Rahman arrived in Tokyo on Monday, October 26, for a four-day visit to a country that has helped build some of Bangladesh's most important infrastructure.
This time, however, Dhaka wants something beyond development assistance which include Japanese factories, private investment, better access to Japanese consumers and jobs for Bangladeshi workers.
The timing is significant. Japan, the world's fourth-largest economy, is struggling with a shrinking and ageing population and persistent labour shortages. Its companies are looking for new markets, production locations and workers. Bangladesh, meanwhile, needs foreign capital, industrial technology, export diversification and employment for its expanding workforce.
The two countries have complementary needs. Whether they can turn those needs into a durable economic partnership is the central question of Tarique's visit.
The prime minister is scheduled to meet his Japanese counterpart, Sanae Takaichi, on October 27. He will also engage with business leaders, development institutions and industrial companies, including potential visits to Toyota, UNIQLO and energy facilities. The visit runs through October 29.
The trip is an early test of the Bangladesh government's ambition to move economic diplomacy away from a reliance on concessional loans and toward private investment, manufacturing and skilled employment.
It is meanwhile an opportunity for Japan to strengthen its economic position in the Bay of Bengal while finding new sources of labour and production capacity.
What Bangladesh is seeking
Japan has been one of Bangladesh's most important development partners since independence. Japanese financing and technical assistance have helped build Dhaka's metro rail, the third terminal of Hazrat Shahjalal International Airport and infrastructure associated with the Matarbari deep-sea port.
These projects have changed Bangladesh's transport and logistics infrastructure. But they have not, by themselves, created the industrial transformation that successive governments have promised.
Tarique's government wants Japanese businesses to do more than finance construction. It wants them to establish factories, employ Bangladeshi workers, transfer technology and make Bangladesh part of their international supply chains.
Bangladesh has prepared a proposed $14 billion investment and cooperation package covering 2026 to 2031. It combines concessional financing, private investment and public-private partnerships across 12 priority sectors.
The proposals include approximately $3.45 billion for transport and urban connectivity, $3.14 billion for the Matarbari industrial and port corridor, and $2.2 billion for energy and climate resilience. Another $1.57 billion is envisaged for manufacturing, including automobiles, electronics and semiconductor-related activities. These are proposals, not committed investments.
More immediately, officials expect discussions on roughly $2 billion in loans and financial assistance. Japanese private-sector investment worth about 1 trillion yen, or $6.36 billion, over five years has also been reported as a potential commitment. The actual amounts, conditions and implementation schedules remain to be established.
One important negotiating advantage for Bangladesh is the Economic Partnership Agreement signed with Japan on February 6, 2026.
The agreement provides a framework for expanding bilateral trade and investment. Its importance lies partly in Bangladesh's approaching graduation from the United Nations' least-developed-country category, which could eventually affect the preferential access its exporters receive in important markets.
Japan already buys more than $1 billion worth of Bangladeshi products annually, mostly garments, with leather goods also among the exports. Bangladesh imports Japanese machinery, vehicles, iron and steel and other industrial products.
According to figures published by the Bangladesh Embassy in Tokyo, bilateral merchandise trade totalled approximately $3.32 billion in fiscal 2024-25, including $1.41 billion in Bangladeshi exports and $1.91 billion in imports.
The challenge is to expand beyond garments.
Japan's consumer and industrial markets offer opportunities for higher-value apparel, leather products, information technology services and specialised manufacturing. Japanese companies could also use Bangladesh as a production base serving other Asian markets.
But tariff preferences alone cannot deliver those gains. Japanese manufacturers require predictable taxation, reliable electricity, efficient ports, enforceable contracts and a supply of technically competent workers.
Bangladesh has struggled with several of these requirements. Investors have complained about regulatory uncertainty, delays in customs clearance and difficulties obtaining reliable energy supplies.
The proposed development of Matarbari and the surrounding industrial corridor is therefore central to the talks. Japan's Bay of Bengal Industrial Growth Belt initiative envisages a network of ports, transport links, energy facilities and industrial zones connecting Bangladesh more closely with regional production networks.
Can Bangladesh supply the workers?
Japan's demographic crisis is reshaping the country's economy.
According to figures released by Japan's Statistics Bureau on October 20, the country's population stood at an estimated 122.69 million at the beginning of October, a decline of approximately 530,000 from a year earlier.
The population aged 65 and older has reached about 36 million, while the working-age population continues to contract. The number of children under 15 is also falling.
For decades, Japan has struggled with low birth rates, later marriages, high living costs and an ageing society. The consequences are visible across the country.
In rural communities, schools have closed because there are too few children. Some municipalities struggle to maintain public services. Companies face difficulties recruiting employees, while hospitals, nursing homes and elderly-care facilities need more workers.
The problem extends well beyond healthcare. Construction companies, restaurants, hotels, transport operators, farms and manufacturers face recruitment shortages.
Japan has responded through automation, robotics, higher participation by women and older people in the workforce, and a gradual expansion of foreign employment.
But technology cannot replace every worker. Elderly people still need caregivers. Restaurants need staff. Factories require technicians. Construction sites need trained employees.
Foreign workers have become increasingly important.
Japan employed a record 2.57 million foreign workers as of October 2025, an increase of 11.7% from a year earlier. The largest groups came from Vietnam, China and the Philippines.
Its foreign-resident population surpassed 4.1 million at the end of 2025, according to Japan's Immigration Services Agency.
This presents an opportunity for Bangladesh, which has a much younger population and sends hundreds of thousands of workers abroad every year.
But the Japanese labour market differs from Bangladesh's traditional overseas employment destinations, particularly the Gulf states.
Japanese employers place considerable importance on language proficiency, technical certification, workplace discipline and compliance with professional standards.
Bangladesh cannot expect to send large numbers of untrained workers and automatically secure jobs. The government is therefore seeking a more structured arrangement.
Dhaka wants to establish a pathway for sending 100,000 Bangladeshi workers and students to Japan annually. The plan includes Japanese-language instruction, technical certification and training in nursing, caregiving, engineering, manufacturing, driving and information technology. That figure is a Bangladeshi target, not an agreed Japanese recruitment quota.
A more concrete development occurred on October 17, when the two countries signed a memorandum of cooperation on employment skills development.
Recruitment under the arrangement is scheduled to begin on April 1, 2027. The agreement provides a framework for employment protections and equal treatment, including safeguards against discrimination affecting female workers.
There is also a possibility of longer-term migration, although the rules vary considerably by visa category and permanent residence is not automatic.
Bangladesh faces competition. Vietnam, Indonesia, the Philippines, Nepal and other Asian countries are also preparing workers for the Japanese market. Several already have more established recruitment networks and Japanese-language training systems.
Bangladesh will have to demonstrate that its workers can meet Japanese requirements without being burdened by excessive recruitment fees, fraudulent contracts or inadequate preparation.
A difficult debate over immigration
Tarique is visiting a Japan whose political landscape has shifted markedly.
Prime Minister Sanae Takaichi, the country's first woman to hold the office, leads the conservative Liberal Democratic Party, or LDP.
She emerged from a period of political uncertainty that had weakened the party's longstanding dominance. The LDP lost its lower-house majority in 2024, followed by setbacks in the upper house in 2025.
Takaichi subsequently formed a governing alliance with the Japan Innovation Party, also known as Ishin, after the LDP's longstanding partnership with Komeito ended.
In February 2026, she secured a decisive electoral victory. Her party won 316 of the 465 seats in the lower house, giving it a two-thirds supermajority on its own and considerably strengthening her political authority.
Takaichi's political outlook is conservative and nationalist. She favours stronger defence capabilities, a more assertive security policy and state-backed investment in strategic industries.
Her economic programme emphasises fiscal stimulus, technological development, industrial competitiveness and measures to address rising living costs.
Japan remains a wealthy, technologically advanced country with globally competitive companies. But it also faces long-term economic pressures: high public debt, an ageing population, uneven wage growth and the costs of supporting an increasingly elderly society.
For years, Japanese households experienced little inflation. More recently, higher food and energy prices have made affordability a major political concern.
The country's dependence on imported energy creates another vulnerability, particularly during periods of geopolitical instability.
Takaichi's government is seeking to strengthen economic security through investments in semiconductors, advanced manufacturing, artificial intelligence, energy infrastructure and resilient supply chains.
These priorities could create opportunities for Bangladesh. Japanese businesses seeking to diversify their production networks may find a competitive manufacturing base in Bangladesh attractive, provided the necessary infrastructure and regulatory conditions are in place.
There is also a geopolitical dimension.
Japan has long viewed the Bay of Bengal as an important part of its broader Indo-Pacific strategy. Its investments in Bangladesh's ports, roads and industrial infrastructure are connected to an interest in regional connectivity, maritime trade and diversified supply chains.
Japan's relations with China remain complicated by territorial disputes, security concerns and competition over technology and regional influence.
Bangladesh's position between South and Southeast Asia gives it commercial significance. A functioning Matarbari port and industrial corridor could improve access to markets in northeastern India and the wider Bay of Bengal region.
For Dhaka, Japanese investment also offers a way to diversify international economic partnerships without relying excessively on any single major power.
Yet one of the biggest contradictions in contemporary Japanese politics concerns immigration.
Japan needs foreign workers, but parts of its electorate are increasingly uneasy about their presence.
The right-wing Sanseito party has gained attention through its nationalist messaging and opposition to immigration. Takaichi has also adopted tougher positions on foreign-resident regulations.
On October 1, Japan announced tighter requirements for permanent residency, including stronger income and Japanese-language expectations and higher application fees. The measures form part of a broader effort by the government to regulate foreign residency more strictly.
This does not mean Japan is closing its labour market. On the contrary, its demographic pressures make foreign workers increasingly necessary.
But the political environment is becoming more demanding.
Japanese policymakers face a difficult balance: admitting enough workers to sustain businesses and public services while responding to voters who worry about cultural change, public spending and immigration enforcement.
For Bangladesh, the success of the visit will ultimately be measured less by the number of agreements signed than by the factories built, export orders secured and workers employed.
And for Japan, Bangladesh could become more than a recipient of development assistance: a source of labour, a manufacturing partner and a link to one of Asia's strategically important maritime regions.
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