While a lack of government initiative is often blamed for the sluggish performance of the country's export of services, absence of innovative approaches by the private sector is considered no less responsible. The combined effect of these two factors appears to be keeping the country's service export on a declining trajectory. Despite the vast potential that the sector holds, Bangladesh has not been able to harness opportunities in the global market in a sustainable way.
The country's export earnings from services have been sliding over the last three years, following a short-lived pickup even in the post-pandemic fiscal year. This trend, according to officials and trade analysts, has largely stemmed from neglect-both in policy direction and in entrepreneurial dynamism. The service sector has often been treated as a peripheral part of export strategy, with most attention concentrated on merchandise such as garments, leather, pharmaceuticals, light engineering, and agriculture. But in a world increasingly driven by digital and knowledge-based services, such neglect has cost the country dearly.
Notwithstanding an impressive income in the fiscal year (FY) 2021-22, when the sector bounced back strongly just after the Covid-19 pandemic, Bangladesh failed to maintain the momentum in the years that followed. That year, service exports brought in US$8.89 billion-a record figure and a clear demonstration of the sector's potential. Yet the optimism proved short-lived. In FY2023, earnings fell to $7.50 billion, marking a sharp reversal. The following year (FY2024) saw a further decline to $6.64 billion. In the last fiscal year (FY2025), there was a modest uptick to $6.91 billion, but this still left the sector nearly $2.0 billion short of the FY2022 peak. According to the Export Promotion Bureau (EPB) data, the rise in FY2025 amounted to just 3.96 per cent compared to the previous year-too little to signal any real turnaround.
These figures reflect a deeper malaise. Experts argue that government policymakers remain preoccupied with the ready-made garment (RMG) industry and a few other merchandise exports, leaving services to develop largely on their own. But services require targeted policy support and investment in infrastructure, skills, and innovation. The global service market is expanding rapidly, particularly in digital domains such as software, IT-enabled services, fintech, e-commerce support, and online education. Countries like India and the Philippines have captured significant shares of this market by promoting IT parks, outsourcing hubs, and skill-development initiatives. Bangladesh, however, has yet to put in place a comparable ecosystem.
At the same time, entrepreneurs of the service sector have also been slow to diversify, innovate and market their products internationally. Too often, businesses rely on traditional areas like manpower exports, sea and air transport, or tourism without aggressively moving into high-growth fields. The absence of structured branding, international marketing, and partnerships with global players has also limited Bangladesh's footprint.
A closer look at the composition of Bangladesh's services exports in FY2025 sheds light on both strengths and missed opportunities. Among the key sectors, foreign-exchange earnings from education and tourism amounted to $505 million, construction services fetched $750 million, while computer services-including software, data processing, and consultancy-earned $628.5 million. Another $550 million came from computer-data processing and hosting services, which fall under IT-enabled services. Technical, trade-related, and other business services generated $980 million, while sea transport brought in $630 million and air transport $400 million. Financial services, excluding insurance, earned $250 million. These figures underscore that Bangladesh already has a presence in diverse service areas. However, compared to global benchmarks, the earnings are modest.
The tourism and education segments are also illustrative. With rich cultural heritage, natural beauty, and a growing reputation for affordable medical and higher education, Bangladesh could attract many more international visitors and students. Yet the earnings of $505 million in FY2025 fall far short of the potential. The reasons are not hard to find: a lack of infrastructure, inadequate branding, poor service quality, and regulatory bottlenecks discourage both tourists and students.
To reverse the decline in service exports, both the government and private stakeholders need to rethink their strategies. The government must recognise services as a strategic export sector, on par with garments and other goods. This requires formulating a comprehensive policy framework for export of services, providing fiscal incentives, investing in digital and physical infrastructure and facilitating international market access. Establishing special zones for IT and outsourcing, easing foreign investment rules in services and negotiating bilateral agreements for mutual recognition of qualifications could open new doors.
Meanwhile, entrepreneurs and service providers must step out of their comfort zones. Innovation, diversification, and aggressive global marketing are essential. For example, Bangladeshi software companies could collaborate with international firms to secure outsourcing contracts. Universities and training institutes could design specialised courses to build skills in areas such as artificial intelligence, cyber-security, and digital marketing-fields that are witnessing explosive demand worldwide. The tourism sector, too, could benefit from partnerships with international operators, better infrastructure and targeted campaigns highlighting Bangladesh's unique attractions.
Ultimately, the future of Bangladesh's service exports hinges on whether the government and private sector can act in concert. The decline of the past three years should serve as a wake-up call. With global demand for services expanding at an unprecedented pace, Bangladesh cannot afford to remain a bystander.
wasiahmed.bd@gmail.com
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