Protecting Bangladesh's market share

The execution of the India-EU FTA, after more than two decades of anticipation and India's persistent efforts, marks a major milestone for the future of Indian exports. However, this agreement presents a serious challenge for Bangladesh in maintaining its competitiveness in the EU market.

Under the deal, substantial tariffs on many Indian export products will be eliminated, giving India a strong advantage. Meanwhile, Bangladesh, which is set to graduate from LDC status by the end of 2026, may face most-favoured nation (MFN) tariffs in the EU. This could lead to the loss of buyers, a shrinking market share, and a potential decline in exports.

Bangladesh's heavy reliance on a limited range of products, mainly garments, adds to the concern. In contrast, India has built a diversified export base, including IT, leather, and other sectors, which positions it better to compete globally.

To meet the challenge of MFN tariffs, Bangladesh urgently needs a robust export policy to mitigate the potential loss of $5-6 billion in exports. Expanding into markets beyond the EU must become a top priority. At the same time, reducing production costs through investment in technology and improvement in processing will be essential for staying competitive. Without such measures, India is likely to dominate the market, making competition extremely difficult for Bangladesh.

Additionally, Bangladesh should actively pursue trade agreements that can help offset MFN tariffs, ensuring that its market position remains strong and its exports continue to grow.

Kawsik Azad Pronoy

A banker

kawsikdbbl@gmail.com