WHEN the country’s trade gap with India recorded an all-time high at $2.65 billion in six months, New Delhi has proposed to renew the existing Indo-Bangla trade agreement for another five years. It is scheduled to expire on April 1 and its review is now in progress. We always attach importance to trade with our big neighbours but when we see the trade gap is only widening, question arises as to why corrective measures were not implemented to bring improvement to the worsening situation to the mutual benefit of both sides and as India is the biggest trading partner, it must take the initiative.
The current trade agreement between the two countries was originally signed in 1972 when India’s market remained highly restrictive while it treated Bangladesh as a land of transit to its northeast. India is now using it to carry more and more food grains, heavy machinery and other commodities. But surprisingly it is avoiding payment of transit fees or standard customs duties under the so-called “humanitarian ground” while trade gaps are only rebounding. Even in such situation Dhaka’s duty-free access to Indian market in case of some major exports is facing serious non-tariff and para-tariff barriers to deny substantial trade benefit under SAFTA agreement.
We suggest that when the existing trade agreement will come for final review there must be more trade creation facilities for Bangladesh, besides widening the scope of existing exports. Bangladesh must have more unrestricted access to Indian market by way of further reducing the negative list of products with eyes on major export items of Bangladesh to enter Indian market. The fact is that if Bangladesh has more export earning from India, it may also import more to the Indians benefit.
A news item in a national daily published on Sunday on India-Bangladesh trade said India is taking unilateral benefits from land, railway and water transit through Bangladesh without paying a minimum cost for using the facilities. Bangladesh may earn substantially from the transit services to improve its trade gap. New Delhi gets the most under the existing “bilateral agreement” which favours India unilaterally. Trade figure on both sides, showed Bangladesh’s imports from India increased to $2.91 billion in July-December of 2014 showing a rise in trade gap from the previous year.
It appears that India’s economy is 12 times bigger than Bangladesh. But Dhaka has some export items like garments, pharmaceuticals and ceramics which have a high potential market in India to play the balancing role in reducing the trade gap. Bangladesh has opened its market to bigger Indian companies but India is keeping the protectionist policies even in case of Bangladesh’s exports to its northeast. We hope trade mutualities should find due importance in the renewed trade agreement including Bangladesh transit access to Nepal and Bhutan.
