Firming Up a Sonar Bangla-India

Context: As India and Bangladesh agree to work towards framing a comprehensive economic partnership agreement, both should work for regional growth, especially amid changing geostrategic contours.

Present state of trade between India and Bangladesh: is abysmal despite Bangladesh enjoying duty and quota-free market access for almost 100% tariff lines.

• Exports: During 2011-19, the Average Annual Growth Rate (AAGR) of India’s goods exports to Bangladesh was 3.7 %( from $3 billion to $8.2 billion) and of
• Imports from Bangladesh were 17.2 %( from $0.4 billion to $1.2 billion).

Scope of India-Bangladesh Economic and Trade Cooperation

• Facilitating economic activity in the backyard: Both neighbours should approach the region with a new prism akin to USMCA (United States- Mexico-Canada Agreement).
• Capturing the global garments market: To replace China’s 29%-plus global share in the next five years.
  • India should focus on selling raw materials while Bangladesh is exporting value-added goods (since it is soon to move out of Least Developing Country status).
  • Indian apparel companies should invest in Bangladesh for utilizing its low-cost manpower.
• Agriculture sector as a low hanging fruit: Bangladesh can invest in the agriculture sector in India, especially given its proximity to India’s north-eastern states. (promotes socio-economic development)
• Join forces to create global value chains: Development of efficient transport, logistics, customs, borders, regulatory standards and continued understanding enabling trade as the preconditions.
• Use technology judiciously to augment trade: Long-pending issues at the Petrapole-Benapole border necessitate immediate solutions for rapid movement of cargo.
• Ensure rapid movement of cargo in borders: through -
  • Operationalization of the BBIN (Bangladesh, Bhutan, India, Nepal) Motor Vehicles Agreement.
  • Tapping the potential of inland waterways - significantly reduce the distance Indian goods have to travel and manoeuvre through the chicken neck to north-eastern India
• Enhance efficiency in trade: Increasing imports from Bangladesh will solve the issue of empty ships returning from Bangladesh to India after goods have been exported.
• Utilize the service potential: Bangladesh should tap into India’s expertise in Information Technology, legal, Research &Development, architecture and financial services, healthcare etc.
• Potential of South Asia’s regional hub and can strengthen the prospects of a cohesive Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).