DHAKA: When Prime Minister Narendra Modi visits Dhaka on June 6-7 for building a stronger political relationship with the strategically positioned neighbouring country, bold moves are expected to take the mutual economic relations much beyond cotton and textiles industry which dominates the bilateral trade.
“Composition of India’s export and import basket related to Bangladesh shows growing intra industry trade in cotton textiles sector. For instance, raw cotton is the single largest item of export to Bangladesh accounting for a share of more than a quarter in India’s total exports to Bangladesh. Also Bangladesh is sourcing dyeing materials and a variety of filament yarns for its textile industry from India.”
The paper has analysed India’s economic engagement with each of the BIMSTEC members including Bangladesh, Mynamar, Sri Lanka, Bhutan, Nepal and Thailand.
With Bangladesh, the second largest member of the BIMSTEC in terms of population, India’s trade is governed by SAFTA framework. India-Bangladesh trade has increased over the years but the share of Bangladesh in India’s total imports remains miniscule. Share of Bangladesh in India’s imports has remained around 2 per cent in recent years while India has consistently maintained a trade surplus with Bangladesh.
“With such a huge trade surplus in our favour, India can afford to be much more liberal towards its neighbor in granting market access. In fact, while a fair competition is welcome, India and Bangladesh can get together in jointly tapping the global textiles market with advantage of cost effective Bangladeshi workforce, while India can provide support in technology, branding, scale etc” Assocham president Rana Kapoor said.
Of the total bilateral trade of $6.65 billion , India’s exports comprised $6.16 billion while imports were less than $500 million, leaving a large trade surplus of $5.68 billion.
As much as 14 percent of India’s total exports to Bangladesh consist of machinery and capital goods with close to $500 million of exports of transport equipment consisting of automobiles and auto parts. India’s imports from Bangladesh consist of primary products such as betel nuts, jute fibre/yarn, oil cakes, fish etc. India is also importing increasing volumes of cotton apparel and accessories after New Delhi granted duty free access to Dhaka on a range of cotton made up articles.
