Bhutan is pressing its case seeking to furnish a customs guarantee instead of a bank guarantee for transit of its goods through Bangladesh.
Bhutan fears that the issuance of any bank guarantee would just add to the cost of business of Bhutan traders, officials said.
The bilateral transit deal, which expired some 18 years back, could not be signed afresh, as the issue of guarantee remained unsettled since the first meeting held in this connection in November 2017.
Last week Bhutan sent a letter to Bangladesh explaining that only the customs guarantee would be filed for its goods moving through India.
Thimphu wants to furnish a letter of guarantee to be issued by its customs department in the event of a transit deal put in place with Bangladesh.
On the other hand, Dhaka seeks a bank guarantee equivalent to taxes and duties to be applicable to any consignment that is offloaded in Bangladesh's market instead of sending it abroad.
Land-locked Bhutan wants to sign a transit deal with Bangladesh to facilitate its overseas trade using Bangladesh's seaports.
"…Bhutan would like to reiterate that introduction of bank guarantee entails cumbersome administrative procedures which would pose extra burden and cost to the traders thereby undermining efforts to improve trade and the ease of doing business between the two countries," the letter said.
"In addition, Bhutan has been trading with third countries using Indian ports where Bhutanese consignments are cleared based on the letter of guarantee issued by Bhutan Customs. This procedure has been highly efficient," it noted.
Two meetings of a joint working group on 'Agreement on the Movement of Goods in Transit' were held in November 2017 and October 2018 to resolve the issue, among others.
In the last meeting, the Bangladesh side requested Bhutan to forward a copy of its existing arrangement with India. Bhutan has now forwarded the documents and agreements being followed for its trade through India.
A senior trade official has told the FE that New Delhi has a transit deal with Dhaka for carrying goods to its remote states using Bangladesh's territory, for which the bank guarantee has not been made mandatory.
He said Bhutan also could be extended a similar facility by accepting the customs guarantee for its transit of goods through Bangladesh.
The official acknowledged that furnishing a bank guarantee for each consignment would just add to the cost of business of the Bhutanese traders.
"We will now place the issue before top authorities for their consideration of Bhutan's plea," he said preferring not to be named.
The previous transit deal between Bangladesh and Bhutan was signed in 1980 and it expired in 2000.
Bilateral trade between the two countries is very meager. In the fiscal year 2015-16 Bangladesh exported goods worth US$ 4.74 million to Bhutan and imported goods worth $21.60 million.
Bangladesh mainly exports apparel, agri-products and footwear to Bhutan and imports vegetable products, prepared foodstuffs, mineral products, products of the chemical or allied industries, textiles and textile articles, base metals, machinery and mechanical appliances and electrical equipment.
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