Nepal and Bangladesh established diplomatic relations on 8 April, 1972. Nepal is the seventh country to recognize Bangladesh. Relations between the two countries have remained friendly and cordial ever since the establishment of diplomatic relations. Both countries are members of SAARC, BIMSTEC, NAM and South Asian Growth quadrangle and work closely in international forums on matters of bilateral, regional and international interests. Exchange of visits at various levels has further developed bilateral relations between the two countries.

The current balance of trade between Nepal and Bangladesh has remained a matter of mutual concern. It is a fact that both countries have not been able to exploit the potentials available so far. Both governments are working seriously to remove impediments in boosting bilateral trade. A number of prospects of cooperation in trade, tourism and investment exist between the two countries. Nepal organized the second single country trade fair in 2007 in Dhaka to promote trade between Nepal and Bangladesh. Reactivation of the Joint Economic Commission (JEC) between Nepal and Bangladesh could help boost trade, commerce and other areas of cooperation between the two countries. The JEC's last meeting was held in 1998 in Kathmandu. Negotiations are also underway to sign the Agreement on the Avoidance of Double Taxation between the two countries with a view to further bolstering trade relations.

It has been estimated that around 1,500 Nepali students study at various government and private universities and colleges in Bangladesh in the areas of medicine and engineering on self finance basis. Nepal has been receiving every year some seats on self-financing scheme in MBBS in the government medical colleges which has contributed to development of human resources of Nepal.

Both countries have been working closely on the proposed Transport Agreement between Nepal and Bangladesh to operate direct bus services between Dhaka and Kathmandu in order to facilitate trade, tourism and people-to-people contacts. It is being expected that the Transport Agreement would also help to increase trade volume.     

Nepal has remained a preferred destination for Bangladeshi tourists who wish to visit Nepal to view the majestic mountains of the Himalayan range, natural beauty and ancient cultural heritage of Nepal. The number of Bangladeshi tourists visiting Nepal in recent years has increased tremendously. From South Asian countries, Bangladeshi tourists are second after Indian tourists visiting Nepal for tourism purpose. Nepal organized tourism fair and road shows in major cities of Bangladesh in 2007 and 2008 respectively in order to familiarize Bangladeshi tourists about the tourism attractions available in Nepal.

 There are a few Nepali nationals serving jail sentences in Bangladesh on various charges. With the cooperation of Bangladesh government, Nepal has been successful in repatriating four Nepali nationals to Nepal in 2007following completion of their jail terms in Bangladesh.