Why a slump in exports to India causes concern in this country more than it should have, given the small volume, is because of a number of pertinent reasons. First and foremost, India is Bangladesh's closest neighbour with a contiguous border of more than four thousand kilometres on three sides; second, as a large country with similar tastes and preferences India is considered a potentially likely export destination for a bulk of Bangladesh's products; and third, a rise in Bangladesh's export is viewed (simplistically though) as a step towards reducing the lopsided balance of trade. A fourth factor, no less important from the viewpoint of public psyche, is a feeling stirred mostly by the media that Bangladesh has been facilitating Indian exports into the country on various counts, which for all good reasons should be reciprocated.
The decline in exports to India last year (fiscal 2013-14) to a level far below that of 2010-11 has reasons to make one believe that the aforementioned factors, assumed to be implicit in the bilateral trade of the two neighbours, have failed to deliver. Exports to India leaped from a paltry US$ 305 million in 2009-10 to US$ 512.50 million in 2010-11, a considerable improvement from the preceding years with a signal that many believed would continue in the years to come. But the reality was far from so: exports slumped the next year, followed by a rise the year after and a sharp fall in the next, i.e., in 2013-14 to US$ 456.60 million. The decline in exports last year compared to that of the year before is around 23 per cent. This also goes to prove wrong the perception that withdrawal of quantitative restrictions or liberalising the trade regime through expansion of duty-free product list is essentially an impetus for growth of exports. The reality remains mere preferential duty or even duty-free access does not prove enough so long the accompanying factors are also addressed.
It is true, the results of the preferential and free trade negotiations under the South Asian Preferential Trade Arrangement (SAPTA) and the South Asian Free trade Area (SAFTA), though lacklustre, have over a period of time eased some of the duty-related hurdles, and so has been the effect of WTO-generated duty-free provision for the least developed countries (LDCs). Bangladesh's exports in value terms have increased to US$ 500-plus, from less than half as much a decade ago. On the other hand, the monumental increase in Indian exports to well over US$ 6.0 billion, given its far larger product basket with intermediate goods and capital machinery, is sometimes attributed to local demands as well as the facilitations on the ground.
While referring to Bangla-India bilateral trade, one issue that never misses out is non-tariff barrier (NTB). NTBs are sometimes confused and misunderstood with the NTMs (non-tariff measures). The general perception of the business community in Bangladesh, the media and all others, who take a fancy to talk on the subject, is that it is the NTBs which are responsible for not allowing Bangladesh exports to grow up to its potential, (believed to be around US$2.0 billion). There are also strongly opinionated quarters who make no bones in attributing a host of the NTBs to a calculated bureaucratic handiwork in New Delhi much of which stems from a mindset nurtured for long to protect India's domestic supplies to the disadvantage of the growth of exports from the neighbours. Too strong a view about the credibility of Indian policymakers! Nonetheless, looking at India's NTMs upclose, one may find that some of the measures are not NTMs per se. Lack of clarity, coupled with cumbersome procedures, makes them at times difficult to be complied with. The federal structure of India's administration conflicting at times with the regulations of the States is also seen to create trade impeding barriers.
It may be seen that much of what is being pointed out as non-tariff barriers in our media is not new. In fact, NTBs that cut across a host of India's trade policy practices, customs and banking procedures, mandatory standards regime and infrastructure-related matters have been on the agenda of the bilateral official-level meetings for long.
Reviewing the scenario of Bangladesh's export to India in recent times, in particular the slump in the last fiscal, there are many who tend to find a lack of well-directed government initiatives and faltering diplomatic efforts as largely responsible for not doing the needful to eliminate a number of NTBs and trade-impeding practices allegedly pursued by India. Given the state of affairs there are definite reasons not to disagree with the view.
However, while NTBs are there as roadblocks to exports, there are other critical factors that must not be overlooked. In order for an export market to be sustained over time, supply-side has to be well-equipped to deliver as per consumer tastes and preferences. This, one must agree, has been essentially characteristic of Bangladesh's exports to India as well as in respect of many other export destinations. This has resulted in fluctuations and irregular trends in export. Except only a handful of products, the bulk of the products in export list fail to perform in a uniform manner for consecutive years. Another factor in slowing Bangladesh's exports to India last year could be the depreciation of the Indian rupee against the US dollar and Euro.
wasiahmed.bd@hotmail.com
Slump in export to India
Wasi Ahmed | Published: August 12, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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