FE Report
India may allow goods-laden vehicles from Bangladesh to enter and ply in the country in a bid to boost up bilateral ties and facilitate trade by reducing freight costs and decongesting borders, a leading business daily in India reported Friday.
The Economic Times (ET), the business daily, published the news on its foreign trade section on the day under the headline "India may allow entry to freight vehicles from Bangladesh to improve bilateral ties".
Citing government officials, the report said the measure was originally planned as a bilateral agreement, but Indian commerce department has proposed the unilateral offer after getting no response from Bangladesh for about a year in respect to the treaty.
It said the commerce department had written to the road transport and highways ministry, which would be in charge of framing the rules and protocol, about the proposal to unilaterally allow Bangladeshi vehicles to ply in India. And the latter has given a conditional acquiescence.
"We have written back saying that we support the proposal but it needs to be approved by the Cabinet given that the offer is a unilateral one. There needs to be clarity on whether and when it would translate into a bilateral agreement from which we could also share the benefits. Stakeholder ministries like home affairs need to be on board for this," a highways ministry official was quoted as saying by the ET.
A commerce department official said a final decision will be taken only after the Cabinet clears the proposal.
At present, vehicles carrying cargo from both sides have to unload the goods at border check posts. The goods are then transferred to vehicles of the importing country to be taken to their destinations, the report said.
It added that this unloading and loading - combined with the rapid rise in bilateral trade growth that has crossed US$ 5.0 billion (approx Rs 31,000 crore) - has led to massive congestion at the border, especially at the land Customs stations or integrated check posts, besides taking a toll on trade transaction and freight costs of exporters and importers.
The report said the trade costs between the countries will significantly come down and goods movement activities also be accelerated if India goes ahead with its move.
To facilitate the move, the ministry would need to frame rules under the Indian Motor Vehicles Act, 1988 as well as protocol and procedures particularly relating to acceptable documents, it mentioned.
Ram Upendra Das of Research and Development System for Developing Countries (RIS), an autonomous think-tank under the ministry of external affairs, welcomed the proposal. "It will be a very good gesture from India's side, which will give confidence to Bangladesh to reciprocate it as they get more access to the Indian market," he was quoted as saying by the ET.
A bilateral Motor Vehicles Agreement (MVA) to enable vehicles from both sides to enter and ply within the other's territory was mooted years ago. In fact, in 2011, Prime Minister Manmohan Singh and his Bangladeshi counterpart, Sheikh Hasina, had agreed to work towards concluding the agreement.
However, officials said, the draft bilateral agreement sent to Bangladesh by the highways ministry has been pending with Bangladesh for about a year.
It won't be the first time that India makes a unilateral offer to Bangladesh. Under the South Asian Free Trade Area (SAFTA) agreement, India provides duty-free, quota-free access to all but 25 products to them.
