BSS, Dhaka :
Major trade barriers significantly eased with the negative list coming down to 25 items from 763 only six years ago, and the export surged to a record high, but still the vast market of India remained largely unexplored by Bangladeshi exporters.
The reasons, as some economists and cross-borders trade experts identified, are the tunneled focus of exporters that kept them away from taking the advantages of duty-free, quota-free access to Indian market.
“The vast Indian market has remained untapped by our exporters because they are relying on conventional products for cross-border trade,” Professor Mustafizur Rahman, Executive Director of Centre for Policy Dialogue (CPD) told BSS.
Bangladesh exports to India highly rely on textile fibre, woven fabric, knitwear, hand-made textile and raw jute and jute goods, which are around 40 percent of the export earnings from Indian market. Other major exports to India include fruit, nuts, cotton and cotton waste, copper, animal fodder and fish.
Rahman, a trade expert, said our exporters should explore new avenues in Indian market instead of relying on conventional products to take full advantage of the duty-free, quota-free market access to India.
Bangladesh export to India surged to reach a new high of $563.9 million in 2012-13 financial year (FY13) with 13.15 percent rise over $498.42 million in 2011-12 financial year (FY12).
The export maintained the strong trend in the first quarter of the current 2013- 14 financial year (FY14) when the amount reached to $245 million only in three months.
According to Indian High Commission in Dhaka, Bangladesh exports to India grew 10 times since 2002.
Economists and businessmen attributed the phenomenal rise of Bangladesh export to India to the duty-free and quota-free market access, offered by India in September 2011 after strong diplomatic efforts of the present government.
Six years back, as many as 763 exportable items including garment were in the negative list of India, but the big neighbour offered duty free, quota-free market access of Bangladesh for all products excepting 25 items including arms, tobacco and liquor.
Among the duty free, quota-free exportables were 46 textile tariff lines, which helped phenomenal rise of export to India with significant jumps in garment export.
Despite the sharp growth in export, trade deficit with India remained as high as $4,176 million in 2013 when the total bi-lateral trade was $5.34 billion. Last year import from India was $4740 million, according to Export Promotion Bureau (EPB) and Indian High Commission in Dhaka.
“Import from Bangladesh by India is only a fraction of its total import from the global market. If we can get 1.0 percent share of the total Indian import, the country could fetch five billion US dollars a year,” said Rahman. He said there are demands in Indian market for Bangladeshi goods. “We should identify the particular demand to get bigger space in Indian market.”
The economist suggested a mutual recognition agreement between Bangladesh and India by strengthening Bangladesh Standards and testing Institution (BSTI) so the countries accept certificates each other.
He favoured increasing customs and warehouse facilities and setting up testing labs at Bangladesh-India border points.
Talking to the news agency, Abdul Matlub Ahmed, President of India- Bangladesh Chamber of Commerce and Industry (IBCCI), said India produced most of the goods and products that Bangladesh produces and usually exports to India. So, we should manufacture unfamiliar products for getting greater access to Indian market.
“And maintaining and ensuring quality are must for sustainable export growth”, said Ahmed, who represents some leading Indian enterprises in Bangladesh.
Besides, Bangladesh should invite more Indian industrialists to set up joint venture industries here, which would also help increase export to India, advised the IBCCI President.
Earlier in February, India’s High Commissioner in Dhaka Pankaj Saran told a meeting of Metropolitan Chamber of Commerce and Industry (MCCI) that there would be teething troubles on entry, but the success stories had already started to emerge.
He said the success of trade also depends in other variables including institutional framework, dispute settlement, non-tariff and para-tariff barriers and trade infrastructure.
Besides India, Bangladesh is enjoying duty-free access to 37 countries, including 27 member states of the European Union (EU).
