New Delhi is now pushing for holding a joint consultation through video conferencing to discuss on the country origination certificates issued under the Safta deal for edible oil exports to India by Bangladeshi traders.
Earlier, India had sought permission for visiting Bangladeshi factories to check whether value is being added inline with the rules of origin criteria of the South Asian Free Trade Area pact.
However, Bangladeshi exporters have expressed their reservations about the onsite visit of factories by Indian officials, thus the government decided to hold joint consultation instead.
Except for a few, Bangladesh is entitled to exporting all goods, duty and quota free to India under the regional free trade accord, but requiring the 30 per cent value addition criteria is a must.
Yet, Indian customs officials frequently decline to accept the rules of origin certificate issued by the Bangladeshi authorities and create impediments to releasing goods from the ports without paying duty.
In addition, to create further barrier, the Directorate General of Foreign Trade, DGFT, of India on January 8 published a notice amending its import policy, which shifted products like refined bleached deodorised palm oil and palmolein from "free" category to the "restricted" one.
Due to the amendment, every consignment of the edible oil has to enter the country obtaining prior approval from the DGFT, which is largely time-consuming and discouraging.
Officials said in February this year, the ministry of commerce told the Indian high commission that instead of conducting onsite visit of factories, the dispute over rules of origin under the Safta accord can be resolved through joint consultation.
After that new coronavirus started to spread both in Bangladesh and India, which has stopped business activities around the world.
According to officials, the Indian high commission on June 22 in a note verbal requested the ministry of commerce to arrange a video conference to discuss the issue of country of origin certificates.
On August 20, the high commission again issued a reminder to the commerce ministry asking for setting up time to hold the virtual conference.
Bangladesh's edible oil export to India with duty free facility has remained suspended for a long time on the dispute over country origin certificate issue.
India asks for bank guarantee, equivalent to applicable duty and taxes to get Bangladeshi edible oil released from the ports.
Commerce ministry officials said India is creating barrier to raising edible oil export to the neighbouring country.
Research director of the Centre for Policy Dialogue Dr Khondaker Golam Moazzem had earlier told the FE that the Delhi administration might have come up with the new measures after Indian entrepreneurs had raised the objection that Bangladeshi exporters were grabbing their shares.
The increase in Bangladesh's exports to India caused a major concern for them, he said, adding India is trying to curtail the benefits offered to Bangladesh.
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