Indo-Bangla free trade deal likely by 2011

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NEW DELHI, Jan 4 (BSS): Bangladesh and India are planning to sign a free trade agreement as early as 2011.
Trade between the two countries is likely to grow fourfold in about five years once the pact is in place, the Kolkata-based largest circulated English daily the Telegraph reported Monday.
The paper said the drill for the Free Trade Agreement (FTA) was expected to gain momentum after the visit of Bangladesh Prime Minister Sheikh Hasina to Delhi, scheduled on January 11.
Her visit was expected to speed up the FTA process that would open up duty-free export of garments, leather, jute and ceramic products from Bangladesh, it said.
"We are targeting a free trade pact by 2011. We have received positive response from studies that we have carried out on the possibility of a pact," Bangladesh Commerce Minister Faruk Khan said over the phone to the Telegraph.
India has free trade pacts with only Sri Lanka and the ASEAN, though it is negotiating similar agreements with the European Union, Japan, Australia, New Zealand and the Gulf states.
"This is the best time to take things forward. Both the governmental and party leaders have good relations. We want to cash in on this to garner gains for Bangladesh," the Telegraph quoted the minister as saying.
The ruling parties of India and Bangladesh -- the Congress and Awami League, respectively -- are on good terms.
Hasina knows the Gandhi family as well as top leaders such as Finance Minister Pranab Mukherjee and Railway Minister Mamata Banerjee.
Studies by various global agencies suggest that Bangladesh, like Sri Lanka, will benefit from the FTA, the Telegraph said.
According to a study, five years after the India-Sri Lanka FTA, the balance in favour of India declined from 15:1 in 1998 to 3.5:1 in 2004. This means for every dollar of Lanka's exports, India's exports were $3.5 in 2004 against $15 six years ago.
In 2004, bilateral trade amounted to $1.73 billion -- Indian exports stood at $1.35 billion, while Sri Lanka exported goods worth $382 million.
India was ranked No. 3 in 2004 vis-a-vis exports from Lanka against 21st in 1998.
Sri Lanka's FTA with India has attracted many multinationals in search of cheap labour and good port facilities. Bangladesh could also see similar investments after the pact.
"We will be engaging with our Indian counterparts during the course of our Prime Minister's visit and we expect a political decision on trade issues. Once there is a clear political will, everything will follow," Khan told the Telegraph.
About the negative list, or the list of products, which India does not buy from Bangladesh, is likely to be pruned from over 400 items to almost half, said the newspaper quoting Indian officials.
India has already cut the initial list of 700 products, but Bangladeshi traders were disappointed as key items such as garments and footwear continued to be banned.
"We have 68 products where we have an advantage and on which there is duty. We have asked for these to be made duty-free. The products include ceramics, jute, garments and leather products," said Khan.
Indian officials said India was likely to agree to these demands to reduce the huge trade gap between the two neighbours.