Bangladesh’s current internet penetration stands at 53 percent, placing it behind regional leaders such as Bhutan at 88 percent and the Maldives at 85 percent, but broadly in line with several neighbouring countries, according to a recent Asian Development Bank (ADB) report.
Internet coverage stands at 57 percent in India and 56 percent in Nepal, while Sri Lanka has achieved near-universal 4G coverage but records relatively low active usage of 51 percent.
The ADB, in its Digital Public Infrastructure: Landscape and Opportunities in South Asia report released last month, identified affordability constraints and low digital literacy as the primary barriers to internet adoption in Bangladesh.
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It said the most pressing challenges facing the country are a stagnating internet penetration rate and a widening digital gender gap.
Only 19 percent of women in Bangladesh access mobile data, compared with 36 percent of men, the report said.
Rural users are also 29 percent less likely to access mobile internet than their urban counterparts, a disparity compounded by a functional digital literacy rate of just 49 percent. As a result, large segments of the population remain excluded from the country’s digital transformation despite high mobile phone ownership.
The report examined the above-mentioned six South Asian countries, assessing the state of digitalisation and the maturity of their digital public infrastructure (DPI).
It also identified institutional gaps and high-impact opportunities for reform and investment, with the aim of helping countries leapfrog legacy systems and improve public service delivery for underserved populations.
The report found that Bangladesh’s foundational digital identity system also lags behind its neighbours. The Smart National ID currently covers around 40 percent of the population.
In contrast, India’s Aadhaar system has achieved near-universal coverage of 99 percent. Even smaller countries such as Bhutan and the Maldives have recorded higher coverage, at 46 percent and 47 percent respectively.
Crucially, the report noted that Bangladesh’s NID system lacks open APIs and a consent-based architecture, limiting its ability to function as a universal building block for the economy. These shortcomings limit its ability to function as a universal digital building block for public services and the broader economy.
Bangladesh also remains vulnerable in terms of physical connectivity.
The country relies on two international undersea cables that follow similar routes, increasing the risk of widespread outages, whereas Sri Lanka and the Maldives benefit from more resilient connectivity through multiple, geographically diverse submarine links.
At the operational level, many rural government offices in Bangladesh are forced to function under low-bandwidth conditions, sometimes as slow as 5 Mbps, constraining their capacity to deliver digital services effectively.
Institutional fragmentation is another major bottleneck for Bangladesh, the ADB notes.
Unlike India, which has established specialised and empowered bodies such as the Unique Identification Authority of India (UIDAI), Bangladesh’s digital governance landscape is characterised by overlapping mandates among the ICT Division, the Bangladesh Computer Council and Aspire to Innovate (a2i).
The absence of a binding legal framework to mandate integration across digital systems has left core registries operating in silos.
In the agriculture sector, for example, soil, water and weather data are managed by different ministries with no common architecture to link them. Similar fragmentation is evident in digital payments.
While India’s Unified Payments Interface (UPI) powers about 85 percent of retail transactions, Bangladesh’s interoperability platform, Binimoy, is described in the report as “stalled”, leaving more than half of retail transactions cash-based.
THE CROWN JEWEL AND THE ‘PHYGITAL’ BRIDGE
Despite these challenges, the ADB report noted that Bangladesh has developed global-standard expertise in several niches. The mobile financial services (MFS) ecosystem has taken the spot of the crown jewel of the country’s digital transition.
Platforms such as bKash and Nagad have emerged as regional powerhouses, facilitating nearly 24 million transactions a day. bKash alone has 75 million registered customers and accounts for about 75 percent of transaction market share.
Supported by a nationwide network of around 379,000 agents, MFS has become the primary driver of financial inclusion in Bangladesh.
Another notable success is the country’s “phygital” bridge. Bangladesh has built a network of around 9,500 digital centres that serve six to seven million rural users each month.
These centres act as critical access points for citizens who lack the digital literacy to independently navigate online platforms.
This infrastructure has reportedly averted 12.9 billion in-person visits to government offices and saved citizens an estimated $21.8 billion in time and travel costs.
Bangladesh is also showing strong momentum in health DPI. The government has stretched the Surokkha vaccine platform to nearly 60 million users and is piloting universal health IDs.
ADB modelling suggests that a fully implemented health DPI stack could deliver $500 million in annual benefits by reducing duplicate tests and enabling real-time immunisation tracking.
PATH TO 2030 GOALS
The report noted that to meet its 2030 goals to reach $5 billion in ICT exports by 2030, Bangladesh must shift from a vendor-led approach to a strategic partnership model with the private sector.
In October 2025, the government took a critical step by approving the Personal Data Protection Ordinance, which is essential to building the trust architecture required for wider adoption.
By enacting a unified DPI governance law and expanding the Bangla QR code framework, Bangladesh could leapfrog legacy systems and redefine its position in the South Asian digital race.
