Bilateral relations between Bangladesh and India have become a model of positive bilateral relations between neighbouring countries. The World Bank has projected that both countries will be among the fastest growing five countries in the world. A similar assessment has also been made by the Asian Development Bank recently.
Bangladesh Deputy High Commissioner in Kolkata, Toufique Hasan informed BE regarding strengthening trade, “The most practical course of action would be to set up ‘buy-back’ projects, where Indian big companies could set up their industries in Bangladesh and the products could be re-exported to India - especially to the north eastern states. We should strive to upgrade, diversify and balance our trade ties. Indian ‘buy-back’ projects in larger scale in the three Special Economic Zones of Bangladesh, which are located at Mongla, Bheramara and Mirsarai, will contribute substantially to that end.” He added, “Anybody can approach us regarding their problems and our office can happily help to resolve issues like trust and clarity in business with Bangladesh.”
He also stated, “Connectivity is a vital area of cooperation between Bangladesh and India. Currently, we are working to restore road, rail and coastal shipping links that had existed prior to the disruption during 1965 Indo-Pakistan war. At the same time, new land ports and better infrastructure are being built to facilitate greater trade. Bangladesh and India have recently signed several agreements for enhancing inland and coastal waterways connectivity between the two countries for trade and cruise movements. Moreover, a Standard Operating Procedure was finalised between the two countries regarding passengers and cruise services from Kolkata to Guwahati via Dhaka. The trial run of this river cruise has been completed recently which is supposed to start commercially by the end of this year. All these projects would surely boost trade, river transport and tourism between the two countries.”
The top five exported items to India from Bangladesh are ready-made garments (more than $300 million this year), jute (raw), jute products, plastic and other allied items, iron and steel, cement. Fish, ceramic crockery, furniture, processed food and light engineering products are among the top five potential items of export from Bangladesh to India. Major imported items from India to Bangladesh are cotton, different types of vehicle, spices, mineral fuels, capital machinery, iron, steel and other metals, stone and boulder, chemical items, plastic and other allied items, garments and cereal. Bangladesh is among top 10 importers of the Indian spices and among the top five importers of the Indian plastic products.
Among the recent Indian private investments, Ashok Leyland has set up a new facility in Dhaka, Bangladesh in a joint venture with IFAD Autos. The sales, service and spares facility is spread over 138,000 square feet and is going to cater to the entire range of Ashok Leyland vehicles.
Indian Commerce and Industry Minister Suresh Prabhu during his September 2018 visit had stated that after Bangladesh graduates from the Least Developed Country (LDC) status, it will no longer have duty-free and quota-free access for its products to the Indian market under South Asia Free Trade Agreement (SAFTA). In view of this, Prabhu had proposed that India and Bangladesh may consider signing a Comprehensive Economic Partner-ship Agreement (CEPA) which would trade in goods and services and investments.
Sushil Poddar, President of the Confederation of West Bengal Trade Association, told BE that the duties levied by the government of Bangladesh on most of the major export items of India are far from reality and are pretty high. According to him, that is one of the major challenges of the Indian exporters to Bangladesh.