EXPORTS to India are not picking up despite a friendly bilateral relationship which has coexisted for long, particularly with the government of the day. The bordering nations maintain a political nexus and diplomatic warmth but export volumes have remained frigid as goods from Bangladesh have to face several non-tariff barriers, countervailing duties, illiberal marketing scope, standardization problem, and lack of diversity in the export basket. The import volume from India is in an ever increasing trend which reached at USD 5.6 billion in 2016 while Bangladesh is struggling to cross the USD 1 billion-mark on exports to India. Taking the congenial relation as an opportunity, the government should strengthen diplomatic efforts to expand trade relations by removing non-tariff barriers and widening export items.
According to Export Promotion Bureau, Bangladesh’s exports to India stood at $672.40 million in fiscal 2016-17 although Indian markets can be a good export destination for Bangladeshi garment makers for its rising middle-class population. But the exports have not been increasing mainly for two reasons – a lack of diversity in Bangladeshi goods and non-tariff barriers in India. Goods cannot enter freely into the Indian market from Bangladesh due to India having non-tariff barriers like mandatory testing and also due to a poor banking system along the bordering areas. India allows duty-free access to all Bangladeshi items, but the imposition of 12.5 percent countervailing duty on apparel items and anti-dumping duty on jute and jute goods are the new obstacles that hindered exports. As a result, in the last fiscal year, garment shipments to India fetched only USD 129.81 million, down by 4.85 percent year-on-year basis.
Currently, the Bangladesh Standards and Testing Institution certificate for 21 food products is recognized by India. Recently, Bangladesh proposed to India to accept the BSTI certification for 14 other products like frozen food, potato crackers, candy, milk powder, white bread, dry cake, drinking water, flavoured drinks, canned juices, soap, cement, mild-steel rod, GI pipes and textile items. The balance of trade between the two countries is heavily tilted towards India because Bangladesh imports some basic products like rice, wheat cotton, cereal, vehicles, chemicals and pharmaceuticals from the neighbouring country.
In such an unbusiness like background, the government must engage high diplomatic endeavours to remove non-tariff barriers, anti-dumping duty, BSTI acceptance and access of television channels to Indian airspace for advertising local goods to the Indian peripheral areas. If such a favourable business-friendly eviroment is created then there will be remarkable expansion of Bangladesh’s export earnings from India resulting in marked reduction in the BoP gap.
