Bilateral relations between Bangladesh and the Kingdom of Bhutan began when Bhutan became the second country in the world to recognize the independence of Bangladesh in 1971. Both nations are members of the South Asian Association for Regional Cooperation (SAARC) and the Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation (BIMSTEC).
As the Bangladesh Liberation War approached the dramatic defeat of the Pakistan Army, Bhutan became the second country in the world (after India) to recognize the newly independent state on 6 December 1971. Sheikh Mujibur Rahman, the founder and first President of Bangladesh visited Bhutan to attend the coronation of Jigme Singye Wangchuck, the fourth King of Bhutan in June, 1974. Diplomatic relations were officially established in 1973. In 1980, both nations opened embassies in their respective capitals. The King of Bhutan made a state visit to Bangladesh in February, 1984.
Bhutan and Bangladesh signed a bilateral trade agreement in 1980, granting each other the "most favoured nation" preferential status for development of trade. As of 2009–2010, Bangladesh's total imports from Bhutan stood at USD 25 million, while its exports to Bhutan accounted for USD 3 million. The agreement was renewed in 2008 during the official visit of Bangladeshi Prime Minister Sheikh Hasina Wajed. In the renewed agreement, Bangladesh gave free access to 18 major categories of import items from Bhutan. The Bangladeshi Prime Minister also promoted the importing of electricity generated in Bhutan, and proposed a Bhutan-Bangladesh bus service across the territories of India.
Bhutan and Bangladesh have actively cooperated in the field of flood control in the aftermath of severe floods in Bangladesh in 1988. Bangladesh also extended support to Bhutan following the 2009 earthquake. Bangladesh offers one scholarship to the Royal Bhutanese Army for a course at the Bangladesh Defence Services Command and Staff College. Both nations signed an air services agreement in 1986, allowing for seven weekly flights between the two nations. Bangladesh designated Biman Bangladesh Airlines and GMG Airlines as its designated carriers, while Bhutan designated Druk Air.
Bangladesh and Bhutan have begun negotiations on the potential export of Bhutanese hydroelectricity to Bangladesh. King Jigme Khesar Namgyel Wangchuck discussed the prospect of power sector cooperation with Bangladesh Prime Minister Sheikh Hasina during his state visits to Dhaka in 2011 and 2013. Bhutan has proposed over 10,000 MW of hydroelectric power for export to Bangladesh.
- "Bangladesh-Bhutan Relations". Embassy of Bangladesh in Bhutan. Retrieved 25 September 2010.
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- Narendra Kr. Singh (2003). Encyclopaedia of Bangladesh. Anmol Publications Pvt. Ltd. pp. 151–56. ISBN 978-81-261-1390-3.
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- "Entrepreneurship lacks keeps untapped Bangladesh-Bhutan trade prospects". Ittefaq - The Nation. 28 April 2010. Retrieved 25 September 2010.
- "Bangladesh to explore trade areas in Bhutan". 2009-11-13. Archived from the original on 18 September 2010. Retrieved 25 September 2010.