Staff Correspondent:

Bangladesh saw a significant surge in net foreign direct investment (FDI) in the January-March quarter of 2025, driven by a sharp rise in intra-company loans and strong equity investments, according to data from the Bangladesh Bank (BB).

Net FDI rose to $865 million in the first quarter, up by 114 percent from $403 million in the same period of 2024. The latest foreign investment was also 76 percent higher than in the October–December period, when the country received $490 million.

The sharp increase came despite a 24 percent year-on-year decline in reinvested earnings, suggesting that fresh capital injections and debt inflows are currently driving investor interest.

However, equity investments more than doubled year-on-year to $304 million, from $188 million in January-March 2024. At the same time, intra-company loans surged to $629 million — nearly two and a half times the $254 million borrowed by foreign firms here a year ago, data from the BB show.

Officials at the Bangladesh Investment Development Authority (BIDA) said this reflects multinational companies’ growing reliance on debt financing to support expansion or manage operational needs.

Reinvested earnings fell to $194.71 million in the first quarter of this year, down from $257.26 million a year ago.

BIDA officials suggested that some companies may be repatriating profits to meet liquidity requirements abroad or diversifying investments.

Outflows also rose, reaching $711 million from $651 million a year earlier, indicating relatively lower net equity inflows in the first quarter.

BIDA Executive Chairman Ashik Chowdhury said FDI inflows reached Tk 10,500 crore in the first quarter, more than double the amount recorded a year ago.

However, he said that BIDA’s role in securing these inflows was “minimal”, as many investment decisions were made earlier. He credited faster approvals by BIDA and BB for supporting the recent momentum.

Meanwhile, the government in May formed a five-member high-level committee to explore incentive mechanisms for attracting FDI.

Led by Finance Adviser Salehuddin Ahmed, the panel has been tasked with submitting its recommendations within a month, focusing on competitive and practical incentives.