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Expanding Bangladesh-India bilateral trade

May 27, 2023 00:00:00

South Asia is said to be poised to become the next growth engine of the world. Being the largest nation of the region both in terms of size and population, India, is obviously the driver of that growth engine. And Bangladesh, as its most friendly next-door neighbour, is going to become an important stakeholder of that regional growth prospects. However, the immense growth potential, whether at the regional or bilateral levels, is yet to be fully realized. In this connection, business leaders at a recent event in the city came up with a set of proposals and recommendations to exploit the full potential of the existing bilateral trade relations between Bangladesh and India. They suggested measures that include getting around the systemic bottlenecks through harmonising the standards of products set both by the Bureau of Indian Standards (BIS) and the Bangladesh Standards and Testing Institution (BSTI).Among other proposals at the event were the introduction of a dual currency credit card and free flow of Bangladeshi taka and Indian rupee without any cap whereby India will accept without the mediation of any third currency payments in taka for its exports to Bangladesh. Similarly, Bangladesh will accept payment in rupee against its exports to India. Issuing work permits for Bangladeshis in India, easing visa procedures to augment mutual business-to-business relations and initiating a working group with the participation of the Indian diplomatic mission in Dhaka and a local business chamber to work together towards further promoting cross-border trade between the two countries also came within the purview of the recommendations.

Notably, India is the 10th largest investment destination of Bangladesh while Bangladesh remains India's fourth biggest export destination in the world. In the last fiscal year (FY2021-22), for instance, the volume of bilateral trade between Bangladesh and India soared to USD18 billion. However, due to issues including dollar crunch, growth in bilateral trade slowed down substantially and the worth of bilateral trade transacted declined to USD12.5 billon in the current fiscal (FY2022-23), which marks a 31 per cent fall in trade volume year-on-year.

The Indian High Commissioner in Bangladesh, Pranay Verma, who was also a participant at the said business event as its chief guest organized by a local business body, the Metropolitan Chamber of Commerce and Industry (MCCI), assured the local business community of increasing business cooperation laying stress on cross-border multimodal connectivity through widening railway, shipping and air links. Modernisation of land ports, creating transshipment facilities through seaports and the prospects of huge trade benefits that Bangladesh can draw particularly from its enhanced connectivity with the northeastern states of India figured prominently in his deliberation. Especially, the possibility of Bangladesh's use of Indian sea and airport facilities for exporting its products to other countries as suggested by the Indian diplomat is undoubtedly a good-neighbourly offer from the Indian side. In this context, following inking of the proposed Comprehensive Economic Partnership Agreement (Cepa) between Bangladesh and India, the current size of annual bilateral trade worth about USD 12 billion would increase fivefold to USD 50 billion. Hopefully, at its post-graduation phase (from an LDC), Bangladesh will be able to see such growth in bilateral trade.

As expected, Bangladesh is looking forward to an unhindered growth of bilateral trade with its closest neighbour so that its current trade gap could be narrowed faster. The bilateral trade facilitation measures as suggested at the MCCI's business meet, it is hoped, will take the ongoing efforts further forward to that end.

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