Visit of Indian Commerce Minister
Friday, 29 April 2011
Syed Jamaluddin
India's Commerce Minister Anand Sharma arrived in Bangladesh on April23,leading a 33-member delegation and a host of high profile businessmen, on a two-day visit to hold talks on bilateral trade. It was an opportunity to discuss the bottlenecks for Bangladesh exports to India, among others. The visiting Indian Commerce and Industry Minister said that Indian companies would invest $3.5 billion in Bangladesh's telecom, food processing, manufacturing and pharmaceutical sectors in the next few years. But he did not indicate any time-frame for this investment. India has agreed to increase the quota of duty-free import of ready made garments from Bangladesh to 10 million pieces from the existing eight million pieces Sharma said Indian investment will provide employment opportunities and value addition for Bangladesh exports to the rest of the world. It was said that the use of Mongla and Chittagong ports by India would enhance bilateral trade. But it is not clear how the use of two ports by India would increase bilateral trade. Sharma said India awaited Bangladesh's response to the draft modalities on transit and transshipment. Basically the minister came here to pursue the transit issue. The Indian minister agreed to supply 0.3 million (3.0 lakh) tonnes of rice and 0.2 million (2.0 lakh) tonnes of wheat to Bangladesh through commercial channels. India agreed to supply these foodgrains to Bangladesh during the visit of our prime minister to India in January 2010. India will also consider supplying Bangladesh with cotton under a special quota. The Indian commerce minister agreed to pay transit fees according to international rules. Transit arrangement will be finalised through discussion. A protocol for using Mongla and Chittagong ports has been given by the Indian side. India has proposed to sign a seven-year treaty for transit and corridor facility. The Indian minister has expressed the desire to pay transit, whereas our one important policy adviser was unwilling to ask for transit fee. Our interests should be carefully considered before giving transit. Our commerce minister observed in a seminar that transit facility to India will increase the export of Bangladesh. But this was not understood by many. The trade gap between the two countries has increased to above $3.0 billion in fiscal 2009-10. Tariff and non-tariff barriers were discussed between the two ministers but no break-through has been made. Bangladesh does not aspire to balance its trade with India but she wants that its goods should be able to enter India smoothly. Non-tariff barriers should not hold up our exports at the border. Bangladesh is not able to export its products to India for some of the reasons indicated below. Bangladesh's main exportable products are largely within the negative list of goods. Non-tariff barriers such as testing and certification, technical standards and banking impediments are some of the identifiable non-tariff barriers. A quality standard certificate from Bangladesh is not accepted by India. The Bangladeshis are not allowed to open bank accounts in the north-eastern states of India. Import -export number is issued from Kolkata. There are poor logistics for land ports. Only certain commodities can pass through land ports. There are cumbersome customs requirement, manual clearance, excessive inspection as an excuse for security, no customs cooperation or joint inspection, lack of harmonisation of standard, lack of warehouse facilities in land ports and no testing facility near any land port. Visa restrictions make it difficult for business people to travel to India to promote trade from Bangladesh. Observers say that although the political atmosphere between the two countries is cordial and friendly, progress on trade-related issues on the Indian side is very slow and unsatisfactory. Concessions from Bangladesh are given by a stroke of pen but the non-tariff barriers from the Indian side have been hanging for many years. India's unilateral acceptance of Bangladeshi products free of duty will hardly dent India's large economy or market .This was stated by Kuldip Nayar in his recent article after visiting Bangladesh. Joint ventures between the two countries will improve bilateral trade. This has been said many times in the past. The visit of the India's commerce minister will hopefully accelerate the removal of all kinds of trade barriers to Bangladesh exports. The implementation process of the areas agreed at the highest political level has been painfully slow and disappointing for the people of Bangladesh. The Indian commerce minister has hinted at providing another $1.0 billion credit for infrastructure development in Bangladesh. Our commerce minister said India will respond further if Bangladesh expresses interest in this connection. Bangladesh needs to purchase at least 85 per cent of goods, works and services from India to implement the projects. Indian government also wants to supervise the projects through their consultants, which has created complexities about project execution. It is pointed out that Bangladesh should take soft loans from independent sources. About the offer of additional credit, Bangladesh may ask for grant assistance. There is no logic to take loan from India for meeting its requirement. Our negotiators feel shy to bargain for grant. India should be happy to provide grant to build roads and other facilities to facilitate movement of their goods. Bangladesh has may outstanding issues with India. We have readily agreed to provide transit and use of Chittagong and Mongla ports by India But we do not appear to have received anything in return. It is not understood how our negotiators are dealing with their Indian counterparts. Reciprocal benefit is expected from any deal between the two countries. The writer is an economist and columnist. He can be reached at E-mail: syedjamaluddin22@yahoo.com
India's Commerce Minister Anand Sharma arrived in Bangladesh on April23,leading a 33-member delegation and a host of high profile businessmen, on a two-day visit to hold talks on bilateral trade. It was an opportunity to discuss the bottlenecks for Bangladesh exports to India, among others. The visiting Indian Commerce and Industry Minister said that Indian companies would invest $3.5 billion in Bangladesh's telecom, food processing, manufacturing and pharmaceutical sectors in the next few years. But he did not indicate any time-frame for this investment. India has agreed to increase the quota of duty-free import of ready made garments from Bangladesh to 10 million pieces from the existing eight million pieces Sharma said Indian investment will provide employment opportunities and value addition for Bangladesh exports to the rest of the world. It was said that the use of Mongla and Chittagong ports by India would enhance bilateral trade. But it is not clear how the use of two ports by India would increase bilateral trade. Sharma said India awaited Bangladesh's response to the draft modalities on transit and transshipment. Basically the minister came here to pursue the transit issue. The Indian minister agreed to supply 0.3 million (3.0 lakh) tonnes of rice and 0.2 million (2.0 lakh) tonnes of wheat to Bangladesh through commercial channels. India agreed to supply these foodgrains to Bangladesh during the visit of our prime minister to India in January 2010. India will also consider supplying Bangladesh with cotton under a special quota. The Indian commerce minister agreed to pay transit fees according to international rules. Transit arrangement will be finalised through discussion. A protocol for using Mongla and Chittagong ports has been given by the Indian side. India has proposed to sign a seven-year treaty for transit and corridor facility. The Indian minister has expressed the desire to pay transit, whereas our one important policy adviser was unwilling to ask for transit fee. Our interests should be carefully considered before giving transit. Our commerce minister observed in a seminar that transit facility to India will increase the export of Bangladesh. But this was not understood by many. The trade gap between the two countries has increased to above $3.0 billion in fiscal 2009-10. Tariff and non-tariff barriers were discussed between the two ministers but no break-through has been made. Bangladesh does not aspire to balance its trade with India but she wants that its goods should be able to enter India smoothly. Non-tariff barriers should not hold up our exports at the border. Bangladesh is not able to export its products to India for some of the reasons indicated below. Bangladesh's main exportable products are largely within the negative list of goods. Non-tariff barriers such as testing and certification, technical standards and banking impediments are some of the identifiable non-tariff barriers. A quality standard certificate from Bangladesh is not accepted by India. The Bangladeshis are not allowed to open bank accounts in the north-eastern states of India. Import -export number is issued from Kolkata. There are poor logistics for land ports. Only certain commodities can pass through land ports. There are cumbersome customs requirement, manual clearance, excessive inspection as an excuse for security, no customs cooperation or joint inspection, lack of harmonisation of standard, lack of warehouse facilities in land ports and no testing facility near any land port. Visa restrictions make it difficult for business people to travel to India to promote trade from Bangladesh. Observers say that although the political atmosphere between the two countries is cordial and friendly, progress on trade-related issues on the Indian side is very slow and unsatisfactory. Concessions from Bangladesh are given by a stroke of pen but the non-tariff barriers from the Indian side have been hanging for many years. India's unilateral acceptance of Bangladeshi products free of duty will hardly dent India's large economy or market .This was stated by Kuldip Nayar in his recent article after visiting Bangladesh. Joint ventures between the two countries will improve bilateral trade. This has been said many times in the past. The visit of the India's commerce minister will hopefully accelerate the removal of all kinds of trade barriers to Bangladesh exports. The implementation process of the areas agreed at the highest political level has been painfully slow and disappointing for the people of Bangladesh. The Indian commerce minister has hinted at providing another $1.0 billion credit for infrastructure development in Bangladesh. Our commerce minister said India will respond further if Bangladesh expresses interest in this connection. Bangladesh needs to purchase at least 85 per cent of goods, works and services from India to implement the projects. Indian government also wants to supervise the projects through their consultants, which has created complexities about project execution. It is pointed out that Bangladesh should take soft loans from independent sources. About the offer of additional credit, Bangladesh may ask for grant assistance. There is no logic to take loan from India for meeting its requirement. Our negotiators feel shy to bargain for grant. India should be happy to provide grant to build roads and other facilities to facilitate movement of their goods. Bangladesh has may outstanding issues with India. We have readily agreed to provide transit and use of Chittagong and Mongla ports by India But we do not appear to have received anything in return. It is not understood how our negotiators are dealing with their Indian counterparts. Reciprocal benefit is expected from any deal between the two countries. The writer is an economist and columnist. He can be reached at E-mail: syedjamaluddin22@yahoo.com