Bangladesh and Paschimbanga are the gateway to South Asia. There are enormous economic potential in areas that remains unexplored as yet. With a view to tapping such potential, the existing infrastructure and road connectivity should be improved.
Paschimbanga Chief Minister Mamata Bannerjee observed this, during her recent visit to Dhaka. She said "we can work together" to make the two sides' business destinations for others. There are many potential areas including tourism, garment, textile, handloom, boutique and entertainment where both can work together.
Mamata Bannerjee had rightly pointed out that there should be an immediate nurturing of the ties between the two sides in order to move forward. A joint business council, she noted, is needed to remove the obstacles faced by the businessmen. There should be a screening committee to identify the problems facing businesses on both sides, she added.
Now what are the problems? As of now, exports to India did not rise up to the expected level due to para-tariff and non-tariff barriers. In fact, the trade imbalance with India is growing because of some bottlenecks.
There is an acute lack of infrastructural facilities along the bordering areas in the Indian state of Paschimbangla. Besides, India is not accepting BSTI (Bangladesh Standards and Testing Institution) certification. This is one of the major barriers to exports from Bangladesh.
However, there is a proposal from the Indian side about removing the barriers to trade with the joint efforts by the members of the business communities of both the countries and the governments.
Among the unresolved issues, there still exist two major disputes between the two countries -- land boundary agreement and the Teesta water sharing. For Bangladesh, these are very contentious issues which matter most to its teeming millions.
The land boundary agreement, according to reports, is at its final stage. It is awaiting ratification by Indian parliament. Mamata was very much optimistic, saying land boundary dispute will be resolved shortly.
But the Teesta deal with Bangladesh will take a little more time as both the countries need to resolve some domestic issues before signing anything.
During the Chief Minister's visit, a memorandum of understanding was signed between the India-Bangladesh Chamber of Commerce and Industry (IBCCI) and the Indian Chamber of Commerce (ICC) to identify the genuine problems facing the businesspeople.
There was also an agreement about launching one more border market soon, in addition to the three already in operation to develop bilateral trade through the formal channel.
Generally, India exports goods worth more than $5.0 billion a year to Bangladesh through formal channels, and it is believed products worth another $5.0 billion enter Bangladesh through informal channels.
Two reasons --, non- and para-tariff barriers and the Lilliput issue -- have narrowed the scope for Bangladesh's exports to India. Some garment exporters of Bangladesh have otherwise been facing uncertainty for years in receiving payments worth $5.0 million from Lilliput, a leading kids wear brand in India.
Besides the countervailing duty at 12.5 per cent, there are some non- and para-tariff barriers for exporting garment items to India. On the whole, exports to India declined 19 per cent year-on-year basis in fiscal 2013-14 mainly due to a slowdown in shipment of garment items that do otherwise enjoy duty-free benefit in the neighbouring market.
Bangladesh's exports were expected to increase on account of this benefit that was given to it, following former Indian Prime Minister Manmohan Singh's visit to this country earlier. But due to the countervailing duty, Bangladeshi exporters lost competitiveness to the Indian garment manufacturers.
Some Indian industrial conglomerates had already invested in Bangladesh while many others were otherwise waiting in the wings. Recently, to mention, the Indian Hero Motor invested in a joint venture plant involving Tk 430 million (43 crore) in Bangladesh. The Bangladeshi businessmen have also shown their interest in setting up hotels and other industries in the neighbouring country.
The Chief Minister of the Indian state of Paschimbanga did rightly suggest to form a business channel between Bangladesh and her Indian state via Kolkata and Siliguri points as the latter locations are considered the gateway to business with Nepal, Bhutan and the 'seven sisters' of North-Eastern India.
There is, as market analysts say, also a large market worth $20 billion for Bangladeshi products in the north-eastern Indian states alone.
Furthermore, there is a long-pending visa problem with India. The Bangladeshi businessmen need multiple-entry visas to take advantage of the market opportunities in India. The neighbouring state of India can become the second biggest apparel market for Bangladesh after the European Union (EU) as the demand for Bangladesh's apparel items among the growing middle class there is high.
All said and done, expectations run high over freer trade relations which are certainly mutually advantageous. Both the countries need to work together for further expansion of bilateral trade and commerce between them. The present level of connectivity has to be speedily expanded to benefit both the countries in a win-win situation.
szkhan@dhaka.net
Exploring business potential with India
Shahiduzzaman Khan | Published: February 26, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
Share if you like