Bangladesh and Malaysia formally launched negotiations for a free trade agreement (FTA) on Tuesday (October 27) to boost bilateral trade and investment, aiming to finalise a modern, balanced and mutually beneficial deal by 2027, The Business Standard reported. Commerce Secretary Sharif Uddin Ahmed Chowdhury inaugurated the first round of discussions at the Pan Pacific Sonargaon Hotel in Dhaka, and the three-day talks are scheduled to continue until October 29.
Source: The Business Standard
During the opening session, both sides signed the Terms of Reference (ToR) to establish the framework and scope of the negotiations, The Business Standard reported. Malaysia's delegation is led by chief negotiator Dr Rashidi Said, while Bangladesh's negotiating team is headed by Commerce Ministry Additional Secretary Khadija Nazneen, Digital Dhaka News reported.
Source: Digital Dhaka News
A deal first promised in June
Chowdhury said the commitment to conclude a sustainable and mutually beneficial FTA by 2027 was discussed during Prime Minister Tarique Rahman's visit to Malaysia in June, when he met Malaysian Prime Minister Anwar Ibrahim, and that the formal launch of negotiations marks an important step towards fulfilling that commitment. He said significant opportunities to diversify trade and investment remained unexplored despite growing economic ties, and pointed to Bangladesh's location at the crossroads of South and Southeast Asia as an opening for Malaysian investors in the halal industry, semiconductor skills development, digital trade, logistics and joint ventures in special economic zones.
Malaysia's chief negotiator Dr Rashidi Said said the proposed FTA should be viewed as more than a tariff-reduction arrangement, describing it as a strategic initiative for a long-term and balanced economic partnership that could be completed by 2027 through mutual understanding, flexibility and a realistic action plan. Bangladesh's chief negotiator Khadija Nazneen said the agreement would improve market access in both countries, lower trade barriers and make cross-border trade more transparent and predictable, with negotiations covering trade in goods and services, rules of origin and customs procedures.
Why Dhaka is in a hurry: the LDC deadline
The commerce secretary highlighted the agreement's importance as Bangladesh prepares to graduate from the least developed country (LDC) category — scheduled for November 24, 2026 — and seeks to preserve its competitiveness in international markets. Dhaka is pursuing trade agreements with eight to ten nations ahead of that graduation; it signed an Economic Partnership Agreement with Japan in February 2026 and a Comprehensive Economic Partnership Agreement with South Korea, though both await ratification in the respective countries, Dhaka Universal reported.
Rashidi put bilateral trade at around US$2.84 billion in 2025 — yaani about 284 crore US dollars — expressing confidence the agreement would open new avenues for trade expansion, industrial development and investment. Of that trade, Malaysian exports to Bangladesh totalled about US$2.35 billion (yaani about 235 crore dollars) while Bangladeshi shipments to Malaysia stood at roughly US$500 million (yaani about 50 crore dollars), according to figures from Malaysia's Ministry of Foreign Affairs reported by Dhaka Universal — a gap Dhaka hopes better tariff terms, especially for its textile and apparel sector, can help close.
Source: Dhaka Universal
Chowdhury also expressed appreciation for Malaysia's support for Bangladesh's aspiration to join the Regional Comprehensive Economic Partnership (RCEP), the major regional trade bloc, Digital Dhaka News reported. The negotiations now continue in Dhaka until October 29.