The bilateral relations between the People's Republic of Bangladesh and the Federal Democratic Republic of Nepal have been progressive since the foundation of Bangladesh in 1971. The two nations are separated by the "Siliguri Corridor" - a small stretch of territory of the Indian state of West Bengal lies between southern Nepal and northern Bangladesh. Both South Asian nations are members of the South Asian Association for Regional Cooperation (SAARC) and Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation (BIMSTEC).
Although it maintained a neutral stance on the Indo-Pakistani War of 1971, the then-Kingdom of Nepal became one of the first nations to recognise Bangladesh, on January 16, 1972; in retaliation, Pakistan broke off relations with Nepal. With Bangladesh, Nepal saw an opportunity to obtain access to port facilities in the Bay of Bengal to bolster foreign trade - something it had sought when Bangladesh was part of Pakistan, to limited success. Bilateral relations improved considerably when the 1975 military coup in Bangladesh brought to power a government that distanced the country from India, with both nations seeking to counter the influence of their largest neighbour. In April 1976, both nations signed bilateral agreements to develop trade, transit and civil aviation. The transit agreement exempted all traffic-in-transit from duties and other charges. Six points of entry and exit for Nepalese traffic were set up. However, the Nepalese goods had to be unloaded at the border, due to the absence of an agreement allowing Nepalese trucks direct access to the ports. In 1986, Bangladesh demanded the participation of Nepal in talks with India over the distribution of water from the Ganges River.
Despite progress in bilateral ties, the volume of trade between the two countries stands at less than $60 million per year. In 2008-09, Bangladesh's exports to Nepal were worth $6.7 million; its major exports include pharmaceuticals, garments, plastics, handicrafts and other goods. Nepal exported $53 million worth of goods, which are largely agricultural produce such as pulses, lentils, rice and wheat.
In 1998, the Phulbari treaty between India and Bangladesh allowed Nepalese goods access to Bangladesh through a transit route in India. In 2010, a joint communique issued by the Prime Minister of India Dr. Manmohan Singh and the Bangladeshi Prime Minister Sheikh Hasina Wajed assured giving Nepal and Bhutan access to the Bangladeshi ports. The commerce secretaries of both countries were scheduled to meet and finalise details for an extensive transit agreement.
- "Foreign Relations of Nepal - Pakistan and Bangladesh". U.S. Country Studies. Retrieved 2010-09-06.
- "Bangladesh-Nepal trade talks in Dhaka next month". Financial Express Bangladesh. Retrieved 2010-09-06.
- T.R. Lakshmanan (2001). Integration of Transport and Trade Facilitation: Selected Regional Case Studies, Volume 2000. World Bank Publications. p. 106. ISBN 978-0-8213-4884-0.
- "Nepal, Bangladesh to hold trade talks". Nepal News. Retrieved 2010-09-06.