Export challenges in EU market

The recent free trade agreement between India and the European Union over duty-free access or, in some cases, significant tariff reductions in cross-border trade, poses a serious and growing concern for Bangladesh. Though this FTA has long been a strategic objective for India, its execution may become a major threat to Bangladesh, raising apprehensions about the possible erosion of its market dominance in the EU.
Bangladesh holds a significant market share in the EU, with nearly 50 per cent of its total annual exports destined for this market. As an LDC, Bangladesh enjoys duty-free export privileges and has secured the second-highest market share in the EU apparel sector.
With the implementation of the FTA between India and the EU, India is likely to aggressively capture market share, potentially displacing Bangladeshi exports. This could significantly affect Bangladesh's export revenue, as the agreement is expected to come into force in 2027. At the same time, Bangladesh is set to graduate from LDC status, which will result in the loss of duty-free export privileges in the EU.
Since India faces substantial tariff barriers in the US market, it is likely to be particularly keen on this bilateral development with the EU. To remain competitive, Bangladesh needs immediate action to negotiate a deal with the EU based on mutual benefits, so that it does not lose its existing market and can secure greater market dominance in the future through sustained export growth.

Kawsik Azad Pronoy
A banker
kawsikdbbl@gmail.com