By: Maqsood Al-Kabir
Australia and Bangladesh have developed one of the fastest-growing trade relationships in the South Asia–Pacific corridor, with bilateral trade exceeding A$5 billion in 2024.
The partnership, grounded in historical ties dating back to Bangladesh’s independence in 1971, is now expanding beyond traditional goods into education, services, energy, and infrastructure.
Australia was among the first developed nations to recognise Bangladesh after its nine-month Liberation War against Pakistan. The Australian Cabinet formally acknowledged Bangladesh on 25 January 1972, and a resident diplomatic mission was established in Dhaka on 31 January 1972.
This early recognition helped Bangladesh gain international legitimacy and paved the way for its entry into the Commonwealth of Nations.
Australian diplomats were active behind the scenes, advocating for recognition at international forums, demonstrating Canberra’s proactive foreign policy approach at a critical juncture in South Asian geopolitics.
During the 1971 conflict, Australian civil society mobilised to support the Bangladeshi population. Expatriates, students, journalists, and community groups organised fundraising, awareness campaigns, and lobbying efforts to press for increased government aid. Millions of refugees and displaced persons benefited from these initiatives, establishing enduring people-to-people ties between the two countries. Individual Australians also contributed directly. William A. S. Ouderland, a Dutch-Australian, trained Mukti Bahini guerrillas and provided logistical and medical support during the war, earning Bangladesh’s Bir Protik award. Australian physician Dr. Geoffrey Davis assisted survivors in 1972, particularly women affected by wartime atrocities, under the auspices of international organisations including WHO. Political leaders such as Gough Whitlam, then Opposition Leader and later Prime Minister, were instrumental in advocating recognition, reinforcing Australia’s principled stance and laying the foundation for lasting diplomatic and economic engagement.
Bilateral trade remained modest through the late 20th century. A turning point came in 2003, when Australia extended Duty-Free Quota-Free (DFQF) market access to Least Developed Countries (LDCs). Bangladesh, an LDC at the time, gained near-unrestricted access for its ready-made garments (RMG) and other products.
By the late 2010s, bilateral goods trade surpassed A$2.6 billion, with Bangladesh exporting mainly RMG and Australia supplying cotton, wheat, lentils, dairy components, and industrial materials—critical inputs for Bangladesh’s manufacturing and textile industries.
The Australia–Bangladesh Trade and Investment Framework Arrangement (TIFA), signed in 2021, established a formal platform for trade facilitation, market access discussions, and investment promotion. Complementing this, the Australia–Bangladesh Business Exchange (ABBX) supports Australian firms exploring opportunities in agribusiness, education, energy, and technology sectors.
Two-way trade has expanded at an average annual growth rate of over 16%, reaching approximately A$5 billion in 2024. Bangladesh is now Australia’s 22nd largest export destination. Over 90% of exports from Bangladesh to Australia are RMG, with minor contributions from leather goods, processed foods, fish, and jute products.
Australia’s exports to Bangladesh are dominated by agricultural and industrial inputs, including cotton, natural fibres, wheat, lentils, vegetables, oilseeds, minerals, metals, and dairy components. Education has become a major sector, with Bangladeshi students contributing hundreds of millions of dollars to the Australian economy annually.
People-to-people links are further strengthened by over 73,000 Bangladesh-born residents in Australia. Bangladesh retains DFQF privileges under TIFA, ensuring continued preferential access to the Australian market, even after its expected graduation from LDC status in 2026.
Despite the strong growth trajectory, the trade relationship faces several challenges. Bangladesh faces political tensions, social unrest, and external trade pressures that could affect investor confidence and export flows to Australia. Heavy reliance on RMG exposes Bangladesh to demand fluctuations and potential tariff changes post-LDC graduation, highlighting the need for diversification into higher-value products and services.
Australian foreign direct investment in Bangladesh remains limited, indicating potential for expansion in sectors such as energy, infrastructure, and digital technologies.
Looking ahead, both governments are exploring ways to broaden trade. Education, healthcare, digital technologies, and agribusiness are emerging opportunities, with Australian institutions well positioned to provide training and capacity building in line with Bangladesh’s growth ambitions.
Bangladesh’s infrastructure expansion and renewable energy targets—including 40% of energy from renewable sources by 2041—create avenues for Australian participation in energy transition projects, technology transfer, and infrastructure development. Strategically, both countries share interests in a rules-based Indo-Pacific, leveraging trade cooperation to strengthen regional security and multilateral engagement.
Bangladesh’s 2026 graduation from LDC status could shift some trade dynamics, but Australia has pledged continued DFQF access, providing certainty for exporters and encouraging policy reforms that support integration into global value chains.
From early recognition and humanitarian support during the 1971 Liberation War to today’s multi-billion-dollar trading partnership, Australia and Bangladesh have built a resilient and diversified economic relationship.
Complementary sectors—Australia’s agricultural and industrial inputs and Bangladesh’s textile and services industries—have formed a robust bilateral corridor. With institutional frameworks like TIFA, expanding services trade, and shared strategic interests, the trajectory of engagement is promising.
Addressing structural risks, fostering investment, and diversifying trade will be key to sustaining growth. The Australia–Bangladesh trading exchange stands as a model of practical diplomacy and mutually beneficial economic cooperation in the 21st century.
The Author:
Maqsood Al-Kabir, an Australian of Bangladeshi heritage, is a human rights consultant with a focus on business advisory, communications, and public affairs. LinkedIn • Facebook • X
