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Trade Representative’s Special Report List, it is highlighted as being one of the top five source economies for counterfeit clothing.

“Although Bangladesh made progress over the past decade to improve fire and building safety standards in the export-focused ready-made garment (RMG) industry, workers face significant legal barriers in exercising their rights to organize and collectively bargain,” the report said.

The interim government’s investment climate reform efforts remain in the early implementation stage, it added.

Bangladesh made gradual progress over the past decade to reduce constraints on investment, such as efforts to better ensure reliable electricity service, but foreign investment continues to be hindered by issues such as inadequate infrastructure, limited financing instruments, bureaucratic delays, unfair tax burdens for foreign firms, and corruption.

“The interim government is working to remove two Hasina-era practices that hinder foreign investment: delayed foreign currency payments owed by state owned enterprises (SOEs) and a requirement that the Bangladesh Bank approve the transfer of foreign currency from the country,” the report said.

The foreign currency shortage coincided with a banking scandal in which several major Bangladeshi banks made large, questionable loans to companies linked to members of the ruling AL party that later defaulted on the loans.

By December 2024, the value of non-performing loans rose to $28.57 billion. The interim government has prioritised banking sector reform to align the sector with international best practices.

After the ouster of former prime minister Sheikh Hasina, the interim government began work on reforming the state administration, but much of the day-to-day regulatory landscape remains unchanged, the report said.

It said the government has made incremental progress in using information technology to improve the transparency and efficiency of some government services. Nevertheless, regulations are often unclear, inconsistent, or not publicised, making it difficult for investors to find the correct channel to address issues, such as protectionism and subsidies in certain industries.

“Some investors have cited unclear regulations and lack of implementation as key barriers to investment,” the report said.

The Right to Information Act (2009) provides for stakeholder consultations; however, this consultation process is weak and needs improvement, it added.