Dhaka to seek unrestricted entry of apparels to Indian market

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Nazmul Ahsan
Bangladesh, during the upcoming visit of Prime Minister Sheikh Hasina to India, is likely to seek withdrawal of quantitative restriction from the duty-free entry of its apparels to the Indian market, sources said.
But the ministry of commerce (MoC) is yet to made up its mind on the issue of persuading New Delhi during the PM's visit to remove all para-tariff and non-tariff barriers to the unhindered access of Bangladesh goods to the India market.
The MoC, according to reliable sources, thinks that the non-tariff issue should not raised at the highest-level official talks. But the business community wants this long-standing irritant to bilateral trade relations should be addressed during the meeting between Prime Minister Hasina and Indian Premier Manmohan Singh.
"We could not export a large volume of RMG under the duty-free arrangement to Indian market due to para-tariff and non-tariff barriers,'' Anwar-Ul-Alam Chowdhury (Parvez), Chairman, Evince Group, told the FE.
"The Prime Minister should press India to lift all trade barriers during her upcoming visit," Parvez, also former President, BGMEA, added.
Ahead of the visit of Hasina, the MoC formed a 'Core Group' to identify exportable items suitable for duty-free entry into the Indian market. Headed by Ruhul Amin Sarker, Joint Secretary, MoC, the Core Group comprises representatives from ministry of commerce, Tariff Commission, National Board of Revenue and major chamber bodies.
After weeklong scrutiny, the found all items from Bangladesh excepting 480, which are now included in the Sensitive list of India under the umbrella of SAFTA, are now enjoying duty-free market access to the Indian market.
Of 480, Bangladesh has only 56 exportable items, a Member of the Core Group said.
Of 56, 43 items fall in different categories of the RMG, he added.
The remaining major items, which don't enjoy duty-free facility, include betel nuts, soybean oil, palm oil, steel pipe and facial tissue.
The Core Group feels that Dhaka should not seek duty-free facility to India for edible oil as such facility if provided might push the prices of edible oil in local markets.
Finally, the Group recommended seeking duty-free market access for all RMG products, lifting the present quantitative restriction of 8.0 million pieces, sources said.
Currently, only 8.0 million pieces RMG gets duty-free facility per year to Indian market under a bilateral trade arrangement between Dhaka and New Delhi.
The exporters even could not export the quantity of RMG to India as India imposed 18 per cent para-tariff, exporters said.
The para-tariffs are education tax, secondary education tax, higher secondary education tax, central value added tax, special central value added tax and additional counter-veiling duty.
"It's rather baffling that India imposes 18 per cent duties and taxes on Bangladeshi RMG in the name of providing the duty-free market access," a textile goods exporter said.
"Our agenda is Border Haat and duty-free entry of RMG without any quantitative restriction,' a top official in the MoC told the FE.
"Issues like non-tariff and para tariff would be discussed at the official level at a later time, not to be included in the agenda of the talks between Sheikh Hasina and Manmohan Singh."
According to the list of barriers put up by India to discourage import from Bangladesh goods, Indian customs authority asks for laboratory test for each and every consignment of food products, cosmetics, and leather and textile products. Exporters concerned are subjected to pay Rs. 3000 as laboratory test fee for each type of food items. The laboratory report normally takes 15-20 days as the samples are sent to the laboratories located far from the land customs stations and sent through normal mail, which delays the clearance of consignments.
The original SAPTA certificates issued by the Bangladesh Export Promotion Bureau are not accepted by the Indian Customs at Agartala. Indian
Customs people ask both the exporters and importers to submit details of rules of origin calculation along with the documents, ignoring the set criteria of the regional agreement, said the list.
Sanitary import permit has been made mandatory for Indian importers of processed food, toiletries and cosmetics from Bangladesh.
Indian government has recently imposed 18 per cent extra duty on cement imports from Bangladesh, affecting cement exports to India's North Eastern region.
Packaging requirement has been specified for food items with maximum retail price, standard unit, month and year of packaging inscribed on the packets. All pre-packaged commodities like processed foods, cosmetics, toiletries, spices imported by India require generic and common name of the commodity packed, net quantity in terms of standard unit of weights and measures.
Non-tariff barrier like inordinate delay in clearance of Bangladeshi goods from customs for various reasons, including non-availability of their designated officers and certificates from departments concerned of the Indian government causes problems for Bangladeshi exporters.
Besides, inadequate physical facilities like warehousing, transshipment yard, parking yard and connecting roads at land customs stations of India also hinder exports from Bangladesh, the list elaborated.
The Indian authorities do not allow trucks of Nepal to go into Bangladesh territory through Banglabandh land customs that causes extra expenses for Bangladeshi importers and exporters.
At Banglabandha point at Phulbari, Nepalese trucks are allowed to come up to zero point and unloading/loading takes place there. The Bangladesh customs and ministry of commerce have long been requesting the Indian authorities to allow Nepalese trucks to come 200 metres inside Bangladesh from the zero point.
The two-way trade balance was $968.71 million in favour of India in the 2001-02 fiscal year, when Bangladesh exported goods worth $50.19 million to India against her imports of $1.01 billion. The gap increased to $2.59 billion in 2008-09.