Abu Sazzad :
The country’s trade gap increased by 7 per cent in the first half (July to December) of the current fiscal 2015-16 compared with the corresponding period of the last fiscal 2014-15.
Country’s trade gap stood at $326.20 crore while it was $305.80 crore during the same period of the last fiscal.
Experts pointed, the trade gap increased in the first half mainly due to higher imports from India and China. Economist M Mamun-Ur-Rashid said, India and China are one of the largest sources of raw materials for Bangladeshi manufacturing industries, which is the reason of high trade gap; contrarily Bangladeshi goods face various non-tariff barriers.
Diplomatic failure is also a reason for the huge trade deficit with the neighbouring India. Even though Bangladeshi apparels enjoy duty-free access, it could not make any significant growth in export mainly because of the non-tariff barriers and government’s lack of initiative in negotiation with the counterpart on different trade-related issues, he said.
Meanwhile, trade imbalance with the SAARC member countries, especially with India, is on the rise for the last couple of years because of the rising trend of imports than exports.
Former President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Mir Nasir Hossain said, the trade imbalance of Bangladesh with China and the SAARC countries is increasing because of the rising trend of imports in comparison to exports.
“Our imports are increasing mainly from India that comprises various goods including raw materials, food items and machineries. At the same time, we could not boost our export to the neighboring country.”
He said that apart from having a small number of exportable items, the tariff and non-tariff barriers as well as infrastructural problems also impede country’s export to India.
The former FBCCI president mentioned that Bangladesh once enjoyed favourable trade balance with Nepal, but now it went in favour of the Himalayan country. Besides, the trade balance with Bhutan is one way as the number of Bangladesh’s exportable items to that country is insignificant.
Bangladesh could reduce the trade imbalance with the SAARC countries by boosting export of garment items, consumer goods, battery, ceramics and melamine, he mentioned.
A Senior Bangladesh Bank official said, the trade gap with China continued to rise in recent years as Bangladesh failed to attract the Chinese consumers to its products due to lack of product diversification.
Centre for Policy Dialogue Executive Director Mustafizur Rahman told The New Nation recently that it was a bad sign that the country’s trade deficit with China continued to rise in recent years.
‘Bangladesh is now enjoying a zero tariff facility in exporting its products to the Chinese market. But, we have failed to utilise the facility fully due to lack of product diversification,’ he said.
The country’s single largest import source is China as it (Bangladesh) imports huge amount of capital machinery, industrial raw materials and consumer goods from the country due to lower prices of products there, he said.
The increasing trend in import from China is not a headache for the business sector but the rising trade gap is a matter of concern, he said.
Mustafizur said, ‘China imports products worth more than trillion dollars from different countries each year, but our export share in the country is very low.’
Exports of footwear, leather and readymade garment are now maintaining an upward trend in China, but it is not satisfactory as the demand for such products is high in the Chinese market, he said.
The local exporters should give more attention to diversification of the three products in a bid to boost the export to China, he said.
The government should speed up investment for product diversification keeping the Chinese market in mind to decrease the trade deficit between Bangladesh and China, he said.
The government has given commitment to the Chinese businesspeople to set up a special economic zone for them, he said. The government should try to increase its export volume to the country in exchange of the facility, he said.
