Dhaka has requested Delhi not to apply new customs rules on goods exported from Bangladesh, citing it as a violation of conditions under the South Asia Free Trade Area (Safta) agreement.
Delhi, on the other hand, has said its new customs rules will apply to all countries. However, if a problem arises in exporting any Bangladeshi goods to India owing to these rules, it will be resolved through a case-to-case discussion.
The Indian Customs Rules that took effect in September last year aim to administer the rules of origin under all trade agreements signed by India.
At the commerce secretary-level talks between the two countries at InterContinental Dhaka on Monday, Bangladesh asked India to play an active role in making Safta effective.
Under the Safta agreement, Bangladesh enjoys duty-free access to all 25 products relating to tobacco and alcohol in India.
Because of the India-Pakistan standoff, no Safta meeting has taken place since 2015.
After the meeting, Commerce Secretary Jafar Uddin told The Business Standard, "We have proposed making regional forums, including Safta, effective Bangladesh and India are members of. We also discussed the introduction of a free trade system between Safta member countries to meet challenges after coming out of the least developed country status."
Bangladesh also proposed withdrawing the anti-dumping duty imposed by India on Bangladeshi jute products as well as not slapping a fresh countervailing duty, removing non-tariff barriers in edible oil exports and facilitating getting of long-term multiple visas for Bangladeshi traders.
The commerce secretary-level annual meeting ended without any specific decision, according to meeting sources.
India has informed Bangladesh that its Directorate General of Trade Remedies (DGTR) imposed the anti-dumping duty. They slap the duty complying with the quasi-judicial process. There is no scope for the Indian commerce ministry to intervene in it. If Bangladesh applies for withdrawal of the duty, it will be sent to the DGTR.
An Indian delegation had made the same point at a secretary-level meeting in Delhi in January last year.
Officials of both countries have agreed on signing a memorandum of understanding called trade remedial measures to resolve various issues in bilateral trades.
An additional secretary of the commerce ministry, who was present at the secretary-level meeting, told TBS that the MoU can be signed within the next six months.
Besides, preparation is underway to sign the proposed Comprehensive Economic Partnership Agreement between the two countries. Both sides are currently examining the deal's viability. The two commerce secretaries decided to complete the survey within the next six months. They want to sign the agreement by next year.
At the meeting, Bangladesh has also proposed accepting certificates issued by the Bangladesh Standards and Testing Institution, setting up labs in the Indian parts of the land ports for testing product quality and expanding border haats on the Meghalaya border.
On the other hand, India has demanded expanding regional connectivity, giving opportunities to export textile products, including yarn, through land ports, commerce ministry officials said.
Bangladesh's export earnings from India, a country with a population of over one core, is very low. In the last fiscal year, the country's exports to India amounted to only $1.1billion, while it imported goods worth $5.79 billion. Bangladesh imports the most goods from India after China.