Businesses for removal of all trade barriers to India

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Nizam Ahmed While welcoming Indian gesture of shortening its sensitive list, businesses in Bangladesh have called for removal of all sorts of trade barriers to India in order to help boost regional trade under the South Asian Free Trade Area (SAFTA). However, they expected an increased volume of exports of Bangladeshi goods to the Indian market as Prime Minister Manmohan Singh last Friday announced a major reduction of his country's sensitive list for the regional least developed countries (LDCs). The announcement at the Summit of the South Asian Association for Regional Cooperation (SAARC) in Addu Atoll island in the Maldives, will also create scopes for Nepal and Bhutan to export more products to India. India has for long been maintaining a sensitive list of about 500 items, different Indian media reports said. "It (shortening of sensitive list) may increase regional trade in South Asia, but it will not help Bangladesh much if India retains the existing multiple trade barriers," the president of SAARC Chamber of Commerce and Industry, Annisul Haque, told the FE. "If India really wants to help the regional LDCs including Bangladesh, New Delhi should remove all tariff, non-tariff and para-tariff barriers," Mr Annisul Haque said. The shortening of the sensitive list is, however, a step forward towards increased regional trade, he noted in this context. Bangladesh imports goods worth over $4.6 billion from India while its exports of merchandise goods are valued at about $600 million. The trade gap is highly tilted in favour of the neighbouring country ever since the independence of Bangladesh, the officials of the ministry of commerce (MoC) in Dhaka said. In a major trade liberalisation effort, the government of India has issued a notification to reduce the sensitive list for the LDCs under the South Asian Free Trade Area Agreement from 480 tariff lines to 25 tariff lines, so declared the Indian Prime Minister Dr Manmohan Singh at the just-concluded 17th summit of the South Asian Association for Regional Cooperation (SAARC) in the Maldives. "Zero basic customs duty access will be given for all those items removed from the sensitive list, with immediate effect," a news agency quoted the Indian prime minister as telling the summit. The Bangladeshi businesses have been struggling for long to convince the Indian government to reduce the number of items in the sensitive list. The announcement about no non-tariff and para-tariff barriers to the exports of the regional LDCs to the Indian market by the Indian prime minister in the Maldives could be considered as another positive move within a couple of months time, they maintained. While visiting Bangladesh on September 6 and 7 last, Dr Manmohan Singh announced duty-free and quota-free access for 46 Bangladeshi garment products to India. "The report of reducing the sensitive list to 25 from 480 by India is incredible and if it is true than it is a great offer of trade concession," Prof. Mustafizur Rahman, executive director of the Centre for Policy Dialogue (CPD) told the FE. "However, it is not yet clear by when it will be really implemented, so it is premature to comment on the latest announcement by India at this stage," Prof. Mustafiz, head of the leading think-tank of the country, added. Under the SAFTA agreement, the member-countries are allowed to retain a 'sensitive list' under which no concessionary treatment is offered for any item included in it. As per the SAFTA agreement, non-LDCs that include India, Pakistan and Sri Lanka, are required to reduce their tariff to five per cent by 2013, and the regional LDCs by 2016.