Bangladesh has the potential to enter the large market of the Russian Federation for high demand products such as shrimp, apparel, leather and pharmaceuticals.
However, Bangladesh is missing out on this huge opportunity for business because it lacks direct market access to the Commonwealth of Independent States (CIS), a regional intergovernmental organisation of post-soviet republics.
The country also lacks a proper banking channel with Russia for financial transactions, which hinders its export sector in that particular market.
Russia promised Bangladesh support for resolving such issues at the second meeting of the Bangladesh-Russia Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation, held in Dhaka on Thursday.
Both nations also signed a memorandum of understanding during the conclusion of the three-day event.
The Russian delegation was led by Ilya V Shestakov, deputy minister of agriculture of the Russian Federation, while the Bangladeshi delegation was led by Monowar Ahmed, Secretary of the Economic Relations Division.
Both parties discussed the aspect of cooperation in the sphere of trade and economic cooperation, power and energy, atomic energy, aviation industry, fisheries, fisheries and livestock, smooth banking transaction, geological research, information and communication technology industry, space and satellite and culture.
Speaking to reporters at a press briefing, Monowar Ahmed said, "Bangladesh has sought support from Russia to resolve a multitude of issues, including lowering its import duty on Bangladeshi products such as shrimp, leather and pharmaceuticals.
"If these issues can be resolved, Bangladesh's market in Russia will expand."
Monowar Ahmed further said, "Both nations have agreed to cooperate for completing the Rooppur Nuclear Power Plant project within deadline. Bangladesh also asked Russia to invest in the 100 under construction economic zones across the country.
"Russia agreed to support the modernisation of two power plants in Siddhirganj and Ghorashal."
At the press briefing, the meeting's participants said the Commonwealth of Independent States is comprised of Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan and Uzbekistan.
These countries have strict regulations for import, which is preventing Bangladesh from reaching their markets directly.
If Russia allows Bangladesh direct access of its market, Bangladeshi products can be exported to other member countries of the Commonwealth of Independent States, said the participants.
Meanwhile, Joint Secretary of Economic Relations Division Ali Hossain said, "The demand for Bangladeshi products in Russia has increased. In the meeting, we proposed Russia to grant Bangladesh the opportunity to export products directly to their market.
"An agreement in this regard was signed by both nations on July this year. Bangladesh requested Russia to implement the agreement as soon as possible."
Ali Hossain added that a discussion on increasing cooperation between the business communities of both countries were held at the meeting, which was attended by a delegation of Bangladeshi business-people.
"Bangladesh cannot directly export its products to Russia due to tax related issues and other complications. Russia imposes a 20 percent tax on Bangladeshi products. Bangladeshi businesses also have to pay an 18 percent value added tax."
Bangladesh currently exports its products to Russia through Germany, Poland and other European Union countries.
"Russia wants to sell aircraft to Bangladesh. Necessary action regarding the matter will be taken after scrutiny from the Ministry of Civil Aviation and Tourism. Russia also promised Bangladesh support for gas exploration," Ali Hossain added.
'A big market'
Commonwealth of Independent States-Bangladesh Chamber of Commerce and Industry President Habibullah Dawn said, "Bangladesh has a large business opportunity in this market for apparel, leather and leathers goods, pharmaceuticals, potato and sea food.
"Russia especially has a big market. The country's economy is blooming day by day and their purchasing power is also very strong."
Admitting that the market has some challenges, Habibullah said, "The Bangladesh government has already taken an initiative by signing a memorandum of understanding with Russia to resolve some issues.
"We need an FTA (free trade agreement) to grab opportunities in that market. China, India and Vietnam have already signed FTAs with Russia and are doing very good business."
According to sources from the Ministry of Commerce, the trade between Bangladesh and Russia amounted to $160 crore in 2017, which is 14.4 percent higher than the previous year.
The same year, Bangladesh exported products worth $88.2 crore to Russia, which is 30.9 percent higher than the previous year. Meanwhile, Russia exported products worth Tk76.29 crore to Bangladesh, which is .6 percent lower than 2016.
The Bangladesh-Russia Intergovernmental Commission was formed on March 1, 2017. The next meeting of the commission will be held in Moscow next year.