DHAKA: Bangladesh’s exports to India have not been rising despite undertaking a lot of positive measures in recent years to reduce the huge bilateral trade gap between the two countries.
People involved in the bilateral trade identified some major impediments — a lack of product diversification, non-tariff barriers, and inadequate banking facility along the bordering areas of the two countries.
They said major steps taken in 2012 could hardly impact Bangladesh’s exports to its neighbour.
A renowned kids’ wear brand in India — Lilliput — had not cleared payments worth $5 million to twenty-two garment exporters of Bangladesh even five years after the shipment, which has dented confidence of the exporters.
Another barrier is that the Indian authorities do not accept certification from Bangladeshi institutions, exporters said.
Bangladesh mainly imports basic commodities from India such as rice, cotton, onion, fabrics, chemical products and dyes, lime stones, cattle, electricity, machinery and pulses. As a result, India has become a top source of Bangladesh’s imports.
It is believed that India exports goods worth more than $5 billion to Bangladesh a year through informal channels.
However, Mostafa Abid Khan, director of Bangladesh Foreign Trade Institute, said non-tariff barriers are not the major problems that hinder Bangladesh’s exports to India.
“The demand for some major export items such as jute and jute bags has declined in the Indian market as production of these items went up in India in recent times,” Khan said.
Though apparel is a major exportable item of Bangladesh, India is not a good destination for such products, he said.
Khan said India’s exports are higher as Bangladesh imports mainly basic commodities from India.
Bangladesh’s imports from India were recorded at $6.03 billion in fiscal 2013-14 and $4.78 billion in the previous year, according to data from the commerce ministry.
On the other hand, Bangladesh’s exports to India were worth $456.63 million in 2013-14 compared to $563.97 million in the previous year.
India came up with some trade improvement measures after the then prime minister, Manmohan Singh, visited Bangladesh in September 2012. Previously, Bangladeshi Prime Minister Sheikh Hasina had also visited India, in January 2010, in a bid to increase bilateral trade.
After the visit of Singh, India allowed duty-free access of all Bangladeshi products to its market, except 25 alcoholic and drug items, to narrow the trade gap.
But in 2013, India imposed 12.5 percent countervailing duty on the export of garments, which is why the overall shipment to India is on the decline.
Kazi Akram Uddin Ahmed, the immediate past president of the Federation of Bangladesh Chambers of Commerce and Industry, said it is the non-tariff barriers that are hurting exports to India.
“The Indian side does not accept certification from BSTI (Bangladesh Standards and Testing Institution). This is why, we cannot export many products to India,” Ahmed said.
