Duty-free market access to top Dhaka’s Indo-Bangla meeting agenda

Highlights:

• Secretary-level trade talks to be held in Delhi on 4 March
• Dhaka's other agenda include new customs rules, anti-dumping and trans-shipment  
• Delhi pursues signing of a comprehensive economic partnership agreement
• Both parties commonly have topics relating to external trade by rail containers

A continuation of duty-free market access to India even after LDC graduation will be the only new agenda on Dhaka's part at the secretary-level trade talks slated for 4 March, according to commerce ministry officials.   

Besides, other existing trade issues such as export obstacles prompted by India's new customs rules, withdrawal of anti-dumping measures on jute-made items and float glass, export of products by rail containers after unloading imported Indian goods and using Indian territories for export to Bhutan and Nepal will be on the table.

The meeting will be held in New Delhi, with Senior Trade Secretary Tapan Kanti Ghosh leading the Bangladesh side. Prior to the meeting, a joint working group comprising representatives from the two neighbours will meet on 2-3 March to finalise the meeting agenda.      

With its least developed country (LDC) status, Bangladesh currently enjoys duty-free access to promising Indian markets under the South Asian Free Trade Area (Safta) agreement.

"We will be seeking from Delhi a continuation of the facility even after our LDC graduation in 2026," Noor Md Mahbubul Haq, additional secretary of the commerce ministry, told The Business Standard.

"This is the only new agenda from Bangladesh at the meeting. Dhaka will also focus on resolving various existing issues in order to strengthen bilateral trade," he noted.

He added that Delhi is pursuing a comprehensive economic partnership agreement, adding that the bilateral deal would benefit both parties.

A proposal to allow LDCs to enjoy preferential trade facilities for up to 12 years even after graduation is now pending with the World Trade Organization (WTO). A top-level WTO meeting in Geneva in June this year could come up with a decision in this regard.

In 2020, India announced new customs rules allowing its customs officials to request a variety of documents from exporters, including the rules of origin of exporting items and value addition papers.

Referring to the rules as contradictory to the Safta agreement, Dhaka at the last secretary level meeting requested New Delhi not to implement them in the case of Bangladeshi products. Instead, Bangladesh asked the neighbouring country to adhere to Safta rules to determine product origin while importing goods from Bangladesh.

Mahbubul Haq said the new customs rules have been causing trouble for Bangladeshi exporters.

"Documents sought by Indian customs are delaying export and raising the cost of external trade," commented the additional secretary, adding Dhaka will emphasise solving the issue at the upcoming meeting.

He said the foreign ministry will hold a meeting on the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicle Agreement next month, underlining export of Bangladeshi goods to Nepal and Bhutan via India.

During the pandemic, Bangladesh began importing goods and raw materials from India by rail-road. After unloading goods in Bangladesh, the containers return empty to India. The additional secretary said Bangladesh will seek exporting products by the rail containers.

India wants ICD in Sirajganj

Emphasising rail road-based trade, the Indian High Commission in Dhaka has sent India's agenda to the foreign ministry.

Inadequate infrastructure in Bangladesh is deterring external trade by rail containers from developing further, according to the high commission.

"The Container Corporation of India has submitted a detailed report on establishing a container handling facility at Sirajganj Bazar, which will enable full-fledged handling of export-import cargo through container service," the Indian High Commission in Dhaka noted. 

India thinks that it is possible to operate twice as many freight trains as at present if Bangladesh Railway can increase the length of loop-lines and good sheds.

Besides, the country will propose expediting the construction of a rail and road based inland container depot at Ishurdi under an Indian Line of Credit.

The high commission said a feasibility study on the trans-shipment of Bangladeshi goods to third countries via Indian ports and waterways has been conducted.