Despite strong diplomatic and economic ties, Bangladeshi exporters continue to face steep tariff and non-tariff barriers in the Malaysian market, constraining trade growth and widening the bilateral imbalance.
While regional competitors such as India and Pakistan enjoy duty-free or reduced-tariff access under bilateral agreements, Bangladeshi products are subject to import duties of up to 30 percent.
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Government officials and industry insiders say this puts key sectors, including processed food, agro-processing, and consumer goods, at a distinct disadvantage, where price competitiveness is crucial.
For instance, Bangladeshi plastic and electronics goods face up to a 30 percent tariff, juice and confectionery items face up to 20 percent, and biscuits 8 percent.
“There’s enormous potential, but without tariff relief and streamlined regulations, it’s difficult for Bangladesh to compete,” said Mosammat Shanara Monica, deputy high commissioner of Bangladesh in Malaysia. “To boost competitiveness in Malaysia, we must prioritise export diversification and product standardisation.”
Speaking to The Daily Star in Kuala Lumpur, Monica, along with Export Promotion Bureau (EPB) Director General Baby Rani Karmakar and top business executives, stressed the urgency of addressing barriers to unlock Bangladesh’s export prospects in Malaysia.
EPB data show that the trade deficit between the countries stands at over $2 billion, in favour of Malaysia. While Bangladesh exports only $200-250 million, it imports over $2.5 billion from the Southeast Asian country.
Bangladesh’s exports largely consist of readymade garments, knitwear, and a few basic food items. In contrast, Malaysia exports a diverse mix of electronics, consumer goods, fertilisers, and machinery to Bangladesh.
Ahsan Khan Chowdhury, chairman and CEO of Pran-RFL Group, one of the major Bangladeshi conglomerates with a growing influence in Malaysia, believes that with the right policies, Bangladesh could emerge as a formidable exporter in Southeast Asia.
“Malaysia and other Asean countries represent hundreds of millions of consumers with rising incomes, food safety demands, and halal dietary preferences,” said Chowdhury.
“Tariff barriers, regulatory red tape, and poor logistics remain major bottlenecks,” he said, adding that Bangladesh needs FTAs and better infrastructure to be more competitive. “Without zero-duty access and efficient port handling, exporters like us can’t compete on fair terms.”
Mahbub Alam Shah, director of the Bangladesh-Malaysia Chamber of Commerce and Industry, also pointed to the same issues.
He said many Bangladeshi companies are eager to enter the Malaysian market but are being outcompeted by Indian and Pakistani exporters who enjoy preferential tariff arrangements. “High tariffs are the biggest obstacle.”
Salim Bhuiyan, managing director of Pinnacle Foods, which imports agricultural and frozen goods from Bangladesh, noted that except for spices, most items face duties of up to 30 percent, making it hard to compete with local and regional players.
“We are surviving only due to our strategic supply chain management,” he added.
The latest Malaysia International Halal Showcase (MIHAS), the world’s largest fair for halal foods, which concluded yesterday, shows the potential of Bangladeshi goods in the Malaysian market.
Touhiduzzaman, deputy general manager (public relations) of Pran-RFL Group, confirmed that during this MIHAS, the company secured export orders worth $1.5 million, up from over $1 million in the previous edition.
Mohammad Haseb, assistant general manager at Nourish, which also partook in the fair, said several Malaysian buyers expressed interest in their products.
Resolving the tariff and non-tariff barriers is expected to boost demand and help Bangladeshi companies expand their business there.
Meanwhile, government officials say efforts are ongoing to sign a Free Trade Agreement (FTA) with Malaysia, alongside broader efforts being made to integrate with the Asean (Association of Southeast Asian Nations).
Monica said discussions on a long-anticipated FTA have recently gained momentum. The Terms of Reference for formal negotiations have been finalised, with round-based talks expected to begin by mid-2026.
She noted that Chief Adviser Muhammad Yunus’ three-day visit to Malaysia in August has helped elevate the FTA to a government priority.
Once in effect, the agreement is expected to reduce or eliminate import duties on Bangladeshi products, significantly improving market access.
A key focus of the bilateral dialogue was the halal economy, which Monica described as a “lifestyle economy” with global appeal, surpassing traditional religious boundaries.
She emphasised Bangladesh’s growing engagement with Asean, stating that Malaysia could serve as a launchpad for deeper regional integration. The interim government is actively pursuing observer or membership status in Asean, which could open doors for increased trade and investment.
EPB Director General Karmakar described the evolving partnership between Bangladesh and Malaysia as a “new chapter” in bilateral relations, driven by shared interests in trade, labour, investment, and the growing halal economy.
She said the EPB has recently signed a Memorandum of Understanding (MoU) with the Malaysia External Trade Development Corporation aimed at deepening commercial cooperation between the two countries.
“This agreement will help us address the persistent trade imbalance, while also opening avenues for export capacity enhancement and joint ventures in emerging sectors,” Karmakar said.
Under the MoU, both agencies will collaborate on the exchange of trade-related information, participation in trade promotion activities such as fairs, missions, and seminars, and facilitation of mutual trade development, she added.
“The Malaysia External Trade Development Corporation is internationally recognised for its strategic export development initiatives. By working closely with them, Bangladesh can significantly improve its competitiveness in sectors like SMEs, agro-processing, pharmaceuticals, and halal-certified food products,” said the EPB chief.
The agreement is also expected to enhance the competitiveness of businesses from both countries by reducing technical barriers to trade and promoting policy alignment.