On Nepal’s National Day, Bangladesh’s leaders pledge deeper ties with their Himalayan neighbour, hinting at untapped potentials in trade, energy, and beyond that could reshape Bangladesh-Nepal dynamics.
Bangladesh’s Chief Adviser Prof Muhammad Yunus and President Mohammed Shahabuddin extended greetings to Nepal on Saturday, September 20, 2025, affirming commitments to collaborate closely in areas of mutual interest; this follows longstanding bilateral agreements on trade and water resources, aimed at fostering economic and cultural bonds between the two South Asian nations.
In an era of regional fragmentation, Bangladesh and Nepal’s resolve to collaborate signals a bolstered subcontinental solidarity, potentially amplifying South Asia’s resilience against economic isolation and climate vulnerabilities through enhanced connectivity and shared prosperity.
Bangladesh-Nepal Strengthen Diplomatic Ties
The messages from Bangladesh’s top officials mark a reaffirmation of the enduring partnership between Bangladesh and Nepal, rooted in historical affinities and mutual goodwill. Prof Yunus, in his address to Nepal’s interim Prime Minister Sushila Karki, highlighted the “close and enduring friendly relation, shaped by shared values and deep historical, linguistic and socio-cultural ties.” He expressed optimism that “in the spirit of friendship and cooperation, our two countries will continue to collaborate closely across all areas of mutual interest for the benefit of the two peoples.”
Similarly, President Shahabuddin, conveying felicitations to Nepal’s President Ramchandra Paudel, noted that “our two countries are bound by deep-rooted historical, linguistic, and cultural affinities, as well as the enduring goodwill of our peoples.” He voiced confidence that “the bonds of friendship and cooperation between the two countries will continue to deepen and flourish in the days ahead.” These statements, issued on the occasion of Nepal’s Constitution Day, underscore a strategic intent to expand bilateral engagements amid evolving regional geopolitics.
The Bangladesh Ambassador to Nepal, Md Shafiqur Rahman, attended the National Day programme at Rastrapati Bhaban (Shitol Niwas) in Kathmandu, where he relayed “warm congratulations to Nepali leadership and its great people.” This diplomatic gesture reinforces the practical dimensions of how Bangladesh and Nepal collaborate, building on frameworks like the SAARC and BIMSTEC platforms.
Areas Where Bangladesh and Nepal Collaborate
While the greetings emphasise broad collaboration, official records indicate focused efforts in economic and resource domains. Bangladesh and Nepal signed a Trade and Investment Promotion Agreement (TIPA) to enhance commerce, with bilateral trade reaching approximately USD 50 million annually—USD 40 million in exports from Bangladesh, including garments, jute products, and pharmaceuticals, against Nepal’s USD 10 million primarily in handicrafts and agricultural goods. Negotiations are underway for a preferential trade treaty and a Bilateral Investment Promotion and Protection Agreement (BIPPA), as per statements from the Bangladesh Embassy in Kathmandu.
In energy and water resources, the two nations actively collaborate through the sixth Nepal-Bangladesh Joint Expert Committee on Harnessing Water Resources and Flood Mitigation, which convened in Kathmandu earlier in 2025. Led by Bangladesh’s Senior Secretary Kabir Bin Anwar and Nepal’s Secretary Sagar Kumar Rai, the committee addressed joint development of irrigation, flood control, and hydropower potential. A recent memorandum of understanding stipulates Nepal’s supply of 10,000 MW of electricity to Bangladesh upon completion of major projects, highlighting how Bangladesh and Nepal collaborate to address energy deficits.
Air connectivity further exemplifies this partnership, governed by a 1976 civil aviation agreement that enables daily flights between Dhaka and Kathmandu by Biman Bangladesh Airlines and private carriers. Cultural exchanges, including scholarships and tourism promotion, also feature prominently, with Bangladesh supporting Nepali participation in trade fairs and vice versa.
Historical Foundations of Bangladesh-Nepal Collaboration
Diplomatic relations between Bangladesh and Nepal were formalised shortly after Bangladesh’s independence, with Nepal recognising the new nation in 1972. The 1976 Trade and Payment Agreement granted Most Favoured Nation status, laying the groundwork for subsequent pacts. High-level visits, such as Bangladesh President Md Abdul Hamid’s trip to Nepal in November 2019, have consistently advanced dialogues on transit facilities, multimodal transport, and investment.
In July 2025, Bangladesh’s Foreign Secretary Asad Alam Siam met Nepal’s Ambassador to Dhaka, stressing the need to “strengthen collaboration in order to unlock untapped potential” in trade, hydropower, and people-to-people contacts. Both sides expressed satisfaction with progress in energy cooperation and explored additional hydropower ventures. This aligns with broader regional initiatives like the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicle Agreement, which facilitates cross-border movement and economic corridors under BIMSTEC.
According to the Ministry of Foreign Affairs of Nepal, the countries share aligned views in multilateral forums, including the United Nations, on issues like sustainable development and climate action. A 2019 Agreement on Avoidance of Double Taxation further eases fiscal barriers to investment, demonstrating the structured manner in which Bangladesh and Nepal collaborate.
Challenges and Opportunities in Bilateral Ties
Despite robust intentions, challenges persist in scaling trade volumes, hampered by geographical barriers and underdeveloped connectivity. The fifth Nepal-Bangladesh commerce secretary-level meeting in Dhaka on March 3-4, 2020, identified multimodal transport as a priority, yet implementation lags. Recent discussions in 2025 have revived momentum, with calls for private-sector involvement in joint ventures.
Opportunities abound in hydropower, where Nepal’s vast potential could offset Bangladesh’s import needs, and in tourism, leveraging shared Himalayan-Bay of Bengal appeal. The third round of Foreign Office Consultations in April 2024, held in Kathmandu, signed an MoU between Nepal’s Institute of Foreign Affairs and Bangladesh’s Foreign Service Academy, fostering educational collaboration.
Background
Bangladesh and Nepal’s relations have evolved from post-independence goodwill to strategic partnerships within SAARC and BIMSTEC. Key milestones include the 1986 Ganges water-sharing inclusion of Nepal and ongoing BBIN initiatives. Amid global shifts, these ties offer a buffer against larger neighbours’ influences, promoting equitable South Asian integration.
What’s Next
As autumn progresses, anticipated Foreign Office Consultations in Dhaka could crystallise specific projects, ensuring Bangladesh and Nepal’s collaborative spirit translates into tangible gains for their citizens.
In celebrating shared heritage, Bangladesh and Nepal chart a course of mutual advancement, where collaboration becomes the cornerstone of enduring regional harmony.
Published in SouthAsianDesk, September 20th, 2025
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