Dhaka and New Delhi are nearing the harmonisation-of-product standards to remove major non-tariff barriers between Bangladesh and India, sources say.
As part of this, neighbouring India sent a concept note, which Bangladesh is currently reviewing.
The note expresses concern that "if the current trend of increasing coverage of technical barriers to trade and sanitary and phytosanitary measures continues in the coming years, exporters from both countries may face greater challenges in addressing them".
Against this backdrop, efforts by India and Bangladesh to pursue continuous, enhanced cooperation towards harmonising technical and sanitary measures would be beneficial in boosting bilateral trade and economic ties, the note adds.
Contacted, a senior official at the commerce ministry said, "We are both working together for mutual alignment of standards in various product sectors with significant trade interest for both countries."
According to the official, different product standards are considered a major non-tariff barrier hindering trade from reaching its full potential between Bangladesh and India.
"Harmonisation of standards is the key to further increase trade between the two neighbouring countries."
"We are nearing the final stage of resolving the issue. We have already held a meeting on the matter," the official added.
Standard marks or certifications issued by the Bangladesh Standards and Testing Institution (BSTI) and the Bureau of Indian Standards (BIS) are not the same, according to a trade official.
For this, he said, the two countries are facing complexities, which are non-tariff barriers, during product imports and exports.
The bilateral trade volume between the two nations currently exceeds $16 billion.
The official informed that harmonisation of sanitary and phytosanitary measures and related standards is also necessary to reduce the impact of existing non-tariff barriers.
Mutual recognition of standards should be adopted by the respective accredited certification bodies like BSTI and BIS, he said.
According to an expert, to minimise trade complexities and reap maximum benefits, Bangladesh and India should sign the proposed Comprehensive Economic Partnership Agreement (CEPA) for comprehensive negotiations.
Since the early 1990s, Bangladesh and India have undertaken various initiatives to expand their economic and trade ties.
These include, among others, a transit treaty, duty-free and quota-free access for Bangladeshi products to the Indian market and an Agreement on the South Asia Free Trade Area (SAFTA), as mentioned in the concept note.
Smoother market access for goods and the development of cross-border and regional value chains offer huge potential to promote deeper trade integration between India and Bangladesh, boosting bilateral trade and enabling closer economic integration within the South Asian region.
As a trade bloc, the Association of Southeast Asian Nations (ASEAN) has undertaken a similar exercise by harmonising standards for 20 priority products.
"As a way forward, relevant authorities from India and Bangladesh can identify a priority list of mutually beneficial products facing non-tariff barriers related to sanitary and phytosanitary and technical barriers to trade measures, where harmonising regulatory measures could open market access," the document reads.
Expert agencies managing regulations could then examine the barriers and restrictions identified by exporters for these priority commodities.
These barriers could range from product-level manufacturing standards and complex certification processes to testing and registration requirements.
After a detailed examination of the commodities and their corresponding barriers, authorities from both countries could explore and collaboratively agree upon potential solutions for resolving these obstacles.
In bilateral trades, the technical and sanitary measures are governed by agreements between the countries under the World Trade Organization (WTO).
Trade regulations are often enforced to address health, safety and quality concerns, ensuring that products, whether domestically manufactured or imported, comply with local regulations.
Similarly, sanitary measures are generally enforced to protect human, animal and plant life or health.
The document states, "While the objectives and policy goals behind implementing technical and sanitary measures may be similar for both countries, it has been observed that countries often adopt different forms of standards, regulations and conformity assessment procedures to achieve these objectives."
It adds that during implementation, complying with these diverse requirements can be challenging for market players due to information asymmetry, onerous licencing or authorisation requirements and conformity assessment procedures.
"This can lead to inefficiencies, increased costs, adverse impact on ease on doing business and impede trade. Therefore, there is a growing recognition among countries to pursue mechanisms that can harmonise regulations without compromising on regulatory objectives and policy goals," the document concludes.
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