India and Bangladesh have much to gain by opening up more trading
routes through India's landlocked northeast. While Airtel, Arvind
Mills and other Indian firms are already in Bangladesh, the
country's eastern neighbours are keen to show that it has "more to
offer than just Jamdani saris and Hilsa fish".
Besides opening up more road and rail links to India's northeast,
accepting each other's standards certifications and quick testing
of goods would also boost trade enormously, say officials.
Around 60 percent of Bangladesh's exports to India passes through
the Benapole (Bangladesh side)-Petrapole (India side) check point,
though the two countries have several other such Integrated Check
"There is too much dependence on one trading point; it creates too
much pressure and consequently hampers trade. There is need to
open up the other ICPs too," a Bangladesh diplomatic source told
IANS, declining to be identified.
He was echoing what the country's envoy had said at a recent
Confederation of Indian Industry (CII) seminar here.
Bangladesh High Commissioner Tariq Ahmed Karim had made an
impassioned plea to open up other border trading points, saying,
"We need to sit down and say, apart from two ICPs we have a dozen
other customs trading posts, let's open up the passage of goods..
That is where connectivity takes up meaning."
"Till connectivity is not opened up, northeast will remain
landlocked and business will remain peanuts."
Karim had said Bangladesh was eager to export to the northeast its
manufactured goods - ranging from electronics items like
refrigerators, airconditioners, LCD TVs, etc.
"We have more to offer than just Jamdani saris and Hilsa fish," he
India last year removed 46 apparel items from its negative list of
trading. The two countries also removed all tariff lines except on
25 items from the negative list.
Karim had praised India's "grand gesture" of removing tariff
lines, but he voiced concern over it not being implemented at the
"There is a problem of mindset.. At the senior, political level,
we have very good relations and things are sorted out. But when it
gets down to the level of customs functionaries at the trading
posts, they say they havn't received the written order," a
Bangladesh diplomatic official said.
Another niggling problem is of the Bangladesh Standards and
Testing Institution (BSTI) certification not yet being accepted by
Indian traders. India is moving towards sorting out the problem.
Indian Foreign Secretary Ranjan Mathai had said India "would also
welcome investments by Bangladesh companies in India."
Airtel has invested US$1 billion in Bangladesh and taken over
Warid and launched operations in the name of 'Airtel-Bangladesh'.
TATA International has announced two joint ventures for leather
shoes and bicycles, while Arvind Mills signed a JV with Nitol
Group to invest $66 million over three years in a denim
manufacturing plant to be set up in the Comilla Export Processing
Bangladesh says it too wants its manufacturers' visibility in
India. But Bangladesh companies face a major problem in banking
transactions in India.
"We are still bracketed with Pakistan in terms of security... 'for
the RBI we are still a security risk," Karim had said, adding he
had taken up the issue with Indian authorities.
"These are little things, but huge in terms of how they
translate," he had said.
"Things are getting better; both sides are working to solve
irritants and hope they are solved in the near future," a
Bangladesh official told IANS.
A World Bank study had pointed to the immense benefits of a Free
Trade Agreement (FTA) between the two countries. Talks on it have
been stalled for many years.
World Bank lead economist for Bangladesh Sanjay Kathuria said an
FTA along with increased connectivity would lead to a "win win
situation" for both the countries.
The study said free trade between the two countries could increase
bilateral trade volume by over 100 percent.
Transit access between the two countries would not only open up
the northeast but also help solve the problem of border poverty,
according to Kathuria.
During 2011-12, two-way trade between Bangladesh and India stood
at $4.3 billion, which was loaded heavily in India's favour. India
sold goods worth over $3.5 billion to Bangladesh against the
latter's export to India of about $0.6 billion.
Bangladesh, a country of 150 million-plus and growing at six
percent, is aiming at eight percent growth.
(Ranjan Narayan can be contacted at email@example.com)