Bangladesh-Moscow Economic Ties: New Developments? – OpEd

Bangladesh and Russia’s economic ties have grown over decades, building on a history of collaboration and mutual support. Beginning with the Soviet Union’s considerable support for Bangladesh’s War of Independence in 1971, the connection has evolved into a multidimensional cooperation. This partnership spans all areas, with both countries aggressively promoting economic connections, trade, and investment cooperation.

As the 52nd anniversary of diplomatic relations between Bangladesh and Russia approaches, the relationship has not only survived, but prospered, with a heavy focus on economic cooperation. Recent collaborative conversations, which serve as a microcosm of this lasting tie, demonstrate a commitment to diversifying the trade basket and increasing Russian investment in Bangladesh. High-level visits, such as the prominent appearance of Russian Foreign Minister Sergey Lavrov in Bangladesh, serve as symbolic checkpoints on this trip, underlining the strength of their partnership. Economic talks, such as those between Foreign Minister Dr. Hasan Mahmud and Russian Ambassador Alexander Mantytsky, highlight the common goal of increasing trade and investment.

In managing the complexity of international relations, both countries refute claims of foreign involvement while recognizing the legitimacy of the Bangladeshi administration. These debates, and their subsequent positive pattern, reflect a larger story of mutual collaboration and shared historical links, assuring the economic success and stability of the Bangladesh-Russia relationship. As we look further into these recent events, we discover the many layers of this long alliance, highlighting the unshakeable link that characterizes Bangladesh’s economic landscape with Moscow.

New developments between Dhaka – Moscow Trade relations

Bangladesh’s Garment Exports to Russia: Defying Odds amidst War

Despite the hurdles faced by the Russia-Ukraine war, Bangladesh’s garment exports to Russia have shown extraordinary endurance. Despite early interruptions and payment processing issues, the sector responded by using other routes via Poland and Hamburg, Germany. Accepting payments in Chinese yuan or US dollars facilitated transactions, resulting in an amazing 45.65% rise in the first quarter of the fiscal year 2022-23, totaling $42.30 million. This increase demonstrates Bangladesh’s garment sector’s flexibility and capability in capitalizing on possibilities provided by changes in the global trading scene.

Year Bangladesh’s RMG Exports to Russia (Million USD) Growth Rate (%)
2020-21 473.54 (FY) 
2021-22 639 (FY) 35 %
2022-23 423 (FY) -38%
2023-24 (Q1-Q4) 125.80 (July-October) 39.42%

Russia’s Strategic Trade Propositions Elevate Economic Ties with Bangladesh

Recent events highlight Russia’s strong attempts to strengthen economic cooperation with Bangladesh. Russia proposes a government-to-government (G-to-G) method to export agricultural items while also meeting Bangladesh’s long-term energy demands via LNG supplies. Notably, Bangladesh exported $639 million in goods and services to Russia during the fiscal year 2021-22, while experiencing hurdles such as Western sanctions. The comprehensive plan also includes currency exchange options and significant investments in Bangladesh’s economic zones, indicating a strategic commitment to developing a mutually beneficial economic collaboration.

Russia-Bangladesh Economic Nexus

In spite of worldwide difficulties, economic relations between Russia and Bangladesh have fortified, as indicated by the substantial surge in Bangladesh’s exports to Russia during the initial quarter of the fiscal year 2023-24. In total, exports increased by $136.47 million, or 37.80%, with the garment industry accounting for a significant portion of this growth at $125.80 million, or 39.42%. The increase in apparel imports from alternative sources by Russia, which is a consequence of Western sanctions, has created a strategic market opportunity for Bangladesh. The trade data illustrates the adaptability and resilience of the economic relationship between Russia and Bangladesh amidst worldwide uncertainties.

Bangladesh’s Trade with Russia (in million USD)
Year Export Import 
2017 464 465
2018 485 653
2019 548 630
2020 487 782
2021 665 482
2022 639 594

Upon examining historical trade data, it becomes evident that the economic partnership between the two countries has been steadily expanding, as evidenced by the most recent figures which indicate a positive trend. As of January 31, 2024, ongoing negotiations between Dhaka and Moscow pertain to the augmentation of Russian investments, the expansion of their respective export portfolios, and the completion of pending Memorandums of Understanding (MoUs). The emphasis on dual-currency trade signifies a proactive stance, underscoring a mutual dedication to bolstering financial flexibility and fostering economic expansion. In general, the present condition of bilateral economic cooperation demonstrates a favorable trend, suggesting that the two nations are capable of addressing obstacles and adjusting to shifting international conditions.