Trade gap with India remains high at $4.17b in FY13AKM Zamir Uddin
The country’s trade gap with India remained high at $4.17 billion in the recently concluded 2012-13 financial year as different non-tariff and para-tariff barriers continued to limit Bangladesh’s exports to the neighbouring country.
Bangladesh officials had earlier hoped that the country’s trade gap with India, which stood at $4.24 billion in FY 2011-12, would come down as India gave duty free access to Bangladesh’s main export products—readymade garments—in late 2011.
Economists and businesses said that although the trade gap in the FY2012-13 came down slightly by 1.5 per cent, figure of $4.17 billion was still high as the potentiality of Bangladesh’s exports to Indian market was not used properly because of Indian barriers.
Bangladesh imported Indian goods worth $4.74 billion in the FY13 against the exports of $563.96 million.
In FY12, the imports from India were almost same at $4.74 billion while exports were worth $498.41 million.
According to the latest Bangladesh Bank and Export Promotion Bureau data, the trade gap between Bangladesh and India was $4.24 billion in the FY 2011-12, $4.05 billion in the FY11 and $3.51 billion in the FY10.
Former Dhaka Chamber of Commerce and Industry president Asif Ibrahim said that the trade deficit between two countries was still high due to the lower exports from Bangladesh to India.
He said that a number of states of India were not following its central government direction of duty-free access facility for Bangladeshi RMG products.
For this reasons, the country’s earnings from RMG products exported to India has not reached a satisfactory level in the last two fiscal years.
He emphasised that the government should increase its negotiation skill with India in a bid increase its export earnings from the neighboring country.
The country earned a total of $ 26.56 billion from the overall export products in the FY13, of which $21.51 billion, or 80.99 per cent was earned from the RMG products, the BB data showed.
The EPB data showed that the country had earned only $75 million from the exported RMG products against the total export earning of $563.96 million in the FY13 from India.
In FY12, the country earned $55 million from the exported RMG products against the total export earning of $498.41 million from India.
The country should take initiatives to strengthen its export competitiveness of ready-made garment products as the ratio of the exported textile products was low against the other products in the FY13, said Mustafizur Rahman, executive director of Centre for Policy Dialogue.
Mustafizur said that the country should take initiatives to attract the foreign businessmen of the RMG sector to invest here as they would get the duty-free facility for exports to India.
The foreign business people are now paying duty for exporting the RMG products to India as other countries are not getting the facility, he said.
He said, ‘The government should take initiative to develop the export-oriented infrastructures like land ports which were located between Bangladesh and India in the greater interest of the exporters’.
Besides, industrial parks and specialised economic zones should be established to increase the export volume to India, he said.
He further said that it was considered that a significant amount of import products from India was now being used in the export oriented products.
Bangladesh commerce secretary during his visit to India recently urged India to remove para-tariff and non-tariff barriers to improve the trade balance between the two neighbouring countries.
Bangladesh commerce secretary Mahbub Ahmed has raised the issue with his Indian counterpart SR Rao and revenue secretary Sumit Bose during his meeting with them in New Delhi on Friday.
‘They have assured me of looking into the matter,’ Ahmed told reporters in Kolkata on the sidelines of an interactive meeting with the members of Indian Chamber of Commerce on Saturday.
Earlier during the interaction, Bangladesh deputy high commissioner in Kolkata Abida Islam elaborating on the trade barriers, pointed out that though under the South Asian Free Trade Area, India has granted Bangladesh duty-free access to all items except tobacco and liquor, there existed several types of duties.
‘For example on RMG products, Countervailing Duty on the assessable value is 8 per cent, Special Additional Duty is 4 per cent, Secondary Education Cess is 2 per cent and Higher Education Cess is 1 per cent. Altogether it comes to around 15 per cent, these barriers discourage the importers to import such goods from Bangladesh.’
She further pointed out that Bangladeshi exporters often face a serious problem because of the non-acceptance of test certificates issued by Bangladesh Laboratory for certain products like soap, Jamdani saree, RMG and food products.
‘In the absence of testing facilities in the LCSs or in the locality, the samples are sent to far away laboratories and in the process considerable time is wasted in obtaining the reports,’ she said, highlighting the need to adopt a system for mutual acceptance of such certificates by both countries.
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