India has sought modification of termination clause of its bilateral trade agreement with Bangladesh for perpetual extension of its validity, official sources said.
The agreement, having three years' validity, is scheduled to expire on March 31 this year.
"The trade agreement between India and Bangladesh would expire on 31st March 2015 and (we) propose that the validity of the agreement be extended in perpetuity by suitable modifications of the termination clause of the agreement," said the Indian High Commission in Dhaka in a recent letter to the Ministry of Foreign Affairs.
Officials at the Ministry of Commerce (MoC) told the FE Tuesday Bangladesh is examining the Indian proposal and a stakeholders' meeting will be convened soon to get opinion in this regard.
"We will hold a meeting with stakeholders soon to know whether a longer-term extension of the agreement will be favourable for us," additional secretary of the MoC Monoj Kumar Roy told the FE.
He said businessmen want favourable policy before making a big investment in any country. "The three-year term in case of such a major policy agreement needs a review."
Earlier, the government was thinking to incorporate service sector in the trade deal. However, in the face of opposition from the business community and the WTO Cell of the MoC, the plan was abandoned.
Officials said a meeting late last month had discussed about bringing amendments to the Articles VI and Article VIII of the agreement. However, later the amendments were found unnecessary and the plan was also abandoned.
The Bangladesh Tariff Commission (BTC) had suggested incorporation of the issue of removal of non-tariff barriers by India so that Bangladesh could enjoy export facilities in the vast market of the neighbouring country.
The Bangladesh-India Chamber of Commerce and Industry had suggested that the bilateral trade deal should be automatically renewed after three years.
The WTO Cell of the MoC had advocated that the tenure of Indo-Bangla trade deal should be of five-year tenure instead of the present three years. This will let businessmen make their business plans without any concern.
Additional secretary Mr Roy said the meeting had discussed various issues but finally had decided not to bring any amendment.
"India has proposed amendment of the termination clause and sought our opinion for perpetual renewal of the validity of the agreement."
Years back, the neighbouring country under the WTO agreement had offered duty and quota- free market access to Bangladeshi products.
The facility had helped raise Bangladesh's apparel exports to India for several years. However, during the last two years, Bangladesh's export to India 'declined due to non-tariff barriers'.
The two-way trade now stands at US$6.491 billion. In fiscal year 2013-14, Bangladesh exported goods worth $456 million to India while it imported goods worth $6.034 billion from there.
Despite granting of duty-free access by India for Bangladeshi goods, export trade imbalance has continued to rise.
syful-islam@outlook.com
