Amit Datta Roy
Senior Research Fellow, Institute for Policy, Advocacy and Governance (IPAG)
Mir Nasir Hossain
Former President, the Federation of Bangladesh Chamber of Commerce & Industry (FBCCI), Bangladesh.
Dr. Prabir De
Professor, & Coordinator, ASEAN-India Centre (AIC), Research & Information System for Developing Countries (RIS), New Delhi, India.
Dr. Mustafizur Rahman
Distinguished Fellow, Center for Policy Dialogue (CPD), Bangladesh.
Senior Director & Head, Arab & South Asia Regions, Federation of Indian Chambers of Commerce & Industry (FICCI)
Mr. Amit Datta Roy initiated the session by mentioning that South Asia was one of the fastest growing regions in the world with Bangladesh and India having significant contributions towards this growth and highlighted the pivotal role of bilateral cooperation between the two countries in supporting this growth. However, some challenges do prevail, for example trade disparity, which is favorable to India. He mentioned that the Bangladesh-India trade ratio was 9 i.e. Bangladesh imported nine times more goods from India than Bangladesh exported to India.
Mir Nasir Hossain mentioned that the Indian export to Bangladesh is 6 billion USD against 0.6 billion USD from Bangladesh to India, signifying the high trade volume disparity in the favor of India. He mentioned that there are opportunities for Bangladesh to access Indian markets. He also mentioned that medical and religious tourism as well as education pushes up the Indian exports to roughly 10 billion USD. He highlighted that existence of non-tariff barriers is a major challenge for Bangladesh which is preventing it from harnessing the Indian market. He particularly cited infrastructure as one of the major problems. Due to lack of warehouse and adequate banking facilities, all goods cannot be imported from all ports. Although both the governments have expressed their concerns regarding these issues, reforms are yet to be implemented at the ground level. If these situations can be addressed, it will be possible for Bangladesh to conduct higher levels of trade.
Dr. Prabir De said that according to his research, the existence of non-tariff barriers is a major hindrance to the bilateral trade between India and Bangladesh. He further added that although connectivity is an issue to be corrected over a long period of time, tariff issues can be corrected through more frequent meetings and coming up with standard operating procedures between the customs officers. He opined that with the successful implementation of Goods & Services Tax in India, things would hopefully be better for Bangladesh in the upcoming months.
Dr. Mustafizur Rahman opined that Bangladesh-India trade relations, especially from the perspective of Bangladesh, is the most important trade relation. He mentioned that global trade deficits matter more for Bangladesh than the bilateral trade deficit with India. He emphasized the importance of Bangladesh entering India’s 400 billion USD global import market. He highlighted the importance of Bhutan-Bangladesh-India-Nepal (BBIN) infrastructure being developed with the Indian Line of Credit and building the integrated customs point. According to him, addressing the infrastructure deficits will do away with 80% of the NTBs, and infrastructure and connectivity are key to deepening investment, trade and people to people connectivity. It is important to concentrate on translating the border points and checking points between Bangladesh and India into crossing points to capture the competitive advantage of Bangladesh. He also said that to combat the existing trade deficit, key issues such as a single window, key operability of the system and crossing points must be set up and operationalized. Mutual recognition agreements and better laboratory testing facilities are needed and banking systems and connectivity need to be improved.
Gautam Ghosh highlighted the importance of FICCI (The Federation of Indian Chambers of Commerce and Industry) and FBCCI (The Federation of Bangladesh Chambers of Commerce and Industry) in nurturing India-Bangladesh economic relations through exchange of business delegations, organizing various seminars, and facilitating business meetings as part of the effort to support President Narendra Modi’s “Neighbourhood First” policy. FICCI has enlisted a six-point agenda with FBCCI to carry forward bilateral industrial relations. He mentioned that India and Bangladesh are at a historic junction and the onus is on the respective governments to carry forward the aspirations of the people.
In the panel discussion, Dr. De and Dr. Rahman agreed that India-Bangladesh require developing coordination for the implementation of single window system and inter-operability, more comprehensive economic partnerships and agreements, and implementing dispute settlement mechanisms. Both mentioned the importance of targeting the Indian market through Special Economic Zones (SEZs) and creating the supply side capacities. Mr. Ghosh mentioned that one of the key areas of Indian investment in Bangladesh is in the power and energy sector and agreed with Dr. Rahman that lack of connectivity remains the main obstacle.
Mir Nasir mentioned that Bangladesh has already started taking steps to attract investment through establishing SEZs. He also expressed solidarity with Mr. Ghosh about power sector and added that other important sectors include textiles and IT.
Dr. Rahman mentioned that although there are some challenges to being a middle-income country, it means Bangladesh has made a graduation to a trading nation. He advised to look beyond trade issues and look into a comprehensive strategic partnership.