EU business climate dialogue

EU- Bangladesh Business Climate Dialogue was constituted in 2016 to resolve the exiting bottlenecks to trade which the EU companies are facing in Bangladesh. To facilitate different issues, five working groups (Customs I Trade Facilitation, Pharmaceuticals, Tax Regime, Financial Flows and Investment in Services) are formed under this dialogue.

As one of the members of the license and investment group, NCCI participated in the fifth round meeting of the working group on “Licenses and Investment in the Services Sector” constituted under the aegis of EU-BD Business Climate Dialogue held on 23 April 2019 at the Ministry of Commerce. The major demand of EU in Licenses and Investment in shareholding in logistics from the current 49% to 100% in the Services Sector, as foreign ownership is currently restricted to 49%.

The EU consider this quite insufficient to bring new investment to Bangladesh from leading EU logistics companies. They claimed that globally renowned EU logistics companies with long experience and wide-reaching networks worldwide can provide logistic services at a level and scale required in the Special Economic Zones (SEZ), local and export-oriented industries, if they are allowed to invest in Bangladesh with full ownership. This will help in Bangladesh’s LDC graduation by 2024 and the vision for becoming upper middle-income country by 2021 as real time and secure shipment of goods will be the highest priority for businesses in the years to come.

Officials from Ministry of Commerce, NBR (Customs) and BIDA at the Working Group meeting on 11 March 2018 jointly agreed to conduct a study on the costs and benefits of full (100%) foreign direct investment (FDI in Bangladesh’s logistics sector to opt for the best policy decision in this sector.

NCCI president, Tareq Rahman recommended donors such as JICA and ADB to undertake such a study, as the study if taken by EU can be considered biased. Whereas, EU as well as the Danish embassy accordingly recommended some local think-tanks who are suitable to conduct the study.  However, who will fund the study is still to be decided.