Businesses urge India to address export challenges

Businesses in Bangladesh on Tuesday urged India to address the bottlenecks to boost country’s exports to the second-largest consumer market of the world.

Addressing the Quarterly Luncheon Meeting of the Metropolitan Chamber of Commerce and Industry (MCCI) in the city, they recommended a string of measures including common standardisation, introduction of dual currency, free flow of both Indian rupee and Bangladeshi Taka in export trade, easing of visa procedures and gearing up business to business (b2b) activities.

Indian High Commissioner in Dhaka, Mr Pranay Verma, who was the main speaker of the event, assured the business community to address the problems faced by the Bangladesh businesses.

The Indian high commissioner in his speech said, Bangladesh and India will soon start negotiations on signing the Comprehensive Economic Partnership Agreement (CEPA).

Mr Verma also stressed the importance of promoting multimodal connectivity for the benefit of both the countries through transshipment and cross border trade.

He said that efforts to modernise and to decongest the land ports are underway to facilitate smooth  trade between the two countries.

Highlighting multimodal connectivity, he pointed out the initiatives to promote rail, shipping and air link between the two countries.

 “We also commenced construction of the second cargo terminal which we believe will help double the throughput of vehicles,” he said adding that there is definitely a need to decongest the checkpoints by improving infrastructure there.”

The Indian high commission said that Bangladesh is in the best position to tap the economic potentials of the north east states of India.

“Removing trade restrictions will also provide incentives for more investment,” he said.

About the expansion of the rail links he said, “We have already restored five of the seven pre-1965  rail links and these are already operating.”

On river communications he said that the quantity of goods transported by the existing 10 protocols routes has gone up by 29 times since 2001.

He also mentioned nearly 99 per cent of the cargo on the protocol is carried by Bangladeshi vessels resulting in a clear economic benefit for Bangladesh.

Admitting that transshipment facility through the Chittagong and the Mongla port provide benefits to the North Eastern states he pointed out that India is also offering Bangladesh options to use its ports, railways and airports to and from India and to the world.

 “Just as we look to improve connectivity of our northeastern states in Bangladesh, we are also encouraging transit facilities for Bangladesh to export its products to third countries to specified land customs stations, airports and seaports.”

“Opening up Indian airports as transshipment hubs for Bangladeshi exports to other countries will give Bangladesh businesses more options for exports,” he added.

 “We have also agreed to expeditiously expand our direct shipping links between the two countries,” he said adding that India is keen to work towards not just the expansion of bilateral link but also expanding it to include third country community which will immensely help Bangladesh's global exports and make them more cost effective.

He said the transshipment through Chittagong and Mongla ports will generate revenue and create significant economic gains for the logistics and service industries of Bangladesh.

 “We have now the necessary standing order issued by the National Board of Revenue of Bangladesh that formalises regular movement using these two ports and I would urge our businesses on both sides to make best use of this mechanism.”

He observed that given the geographical proximity at Northeastern states of India, Bangladesh is in the best position to tap the abundant economic potential of India’s Northeast.

Mr Verma also stressed the need for sectoral and cross sectional investment missions, road shows, capacity building programmes as well as data connection and collaboration between small and medium industries of the two countries.

 “I think SMEs are the drivers becoming increasingly important diversified economies, both in India and Bangladesh” he said.

On the problems of visas he said, “It is our constant endeavor to improve and expand the visa services that we offer.”

In this context, we are trying to improve, not just resources to better handle the huge volume of requests that we are now receiving, but also to ensure that we can cater to the increasing demand that is that is coming down.

 “Now last year alone to give you an example, we are issued more than 1.5 million visas that makes us the largest visa issuing mission in the world.” he added.

We are trying definitely to augment our capacity and resources to deal with increasing demand which is a constant work in progress, he assured.

The fact that both our economies have grown at such high rates in the last 10 years shows that greater inter linkages between our economies have rewarded and reinforced so we need to create more than two hours rather than less.

We must also leverage each other's strengths and comparative advantages and utilise the framework of connectivity that is in place and that we have to put in place.

Mr Verma said, India and Bangladesh share a unique and special relationship unlike any other bilateral relations.

“I think it's really a very unique and special relationship that we have between our two countries. It is more than strategic partnership,” he added.

“I think they're rooted in our shared sacrifices during the immigration borders 1971 which really makes it very, very special and unique relationship which I don't see any other international relations.”

MCCI President Syful Islam lauded the CEPA and proposed the introduction of a dual-currency credit card between the two countries.

He also suggested free flow of BD Taka and Indian Rupee without any cap in case of bilateral trade regardless of Bangladesh’s export performance.

Mr Islam stressed the need for the harmonisation of the standards of the Bureau of Indian Standards (BIS) with those of Bangladesh Standards and Testing Institution (BSTI) to promote trade and its ease.

Former MCCI president Syed Nasim Manzur reminded the audience that ‘this is indeed the age of Asia’ and highlighted the shared vision of creating high quality manufacturing and service sector jobs for both the countries.

Underscoring the need for boosting supply chain linkage Mr Nasim said, “We are seeing an unprecedented opportunity in terms of timing, to as was said recently diversify and de risk global supply chains because of over dependence, particularly on China.”

“ And therefore there is unprecedented interest in manufacturing both our countries, and we see a huge opportunity to link our supply chains,” he added.

The former MCCI president also noted that the opportunity could be utilised properly if the two countries will be able to increase and facilitate trade of raw materials, semi finished product, as well as movement of peoples.

 “So as you said, we need to also innovate and innovations are needed to capture this opportunity.”

He recommended steps to remove three challenges including synchronisation of standard institutions of both countries, ensuring work permits and strengthening b2b relationships.

About the upcoming rules of the Bureau of Indian Standards, he suggested harmonisation between BIS and BSTI to ensure mutual recognition of standards.

 “That could be a huge game changer for Bangladeshi exports to as well as Indian exports to Bangladesh so it would benefit both sides,” he said.

In this connection he suggested that Bangladesh should be given longer time frame to comply with the BIS rules as implementation of mutual recognition mechanisms may not be possible in a short time.

He apprehended that the tremendous export growth may be hard hit by BIS rules.

 “And I can tell you for the garment industry and for other industries like ceramics or even food products, that this is a challenge.”

He also suggested facilitation of the movement of service providers between Bangladesh and India.

 “Many of our farms, we now have operations we will see a huge potential in what is the world's second largest consumer market for many products. But it's very difficult for us to get people to get there,” he said requesting easing visa restrictions.

MCCI Vice President Habibullah N Karim gave the vote of thanks in the programme moderated by Farouk Ahmed, secretary general and the CEO of the MCCI.

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