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The government has decided to review and monitor the implementation of the country's maiden preferential trade agreement (PTA) with Bhutan, aiming to remove trade barriers and expand business, sources said.
To this end, the commerce ministry has formed a high-powered 12-member panel, headed by an additional secretary, in accordance with Article XVII of the PTA deal.
When contacted, an official from the Free Trade Agreement (FTA) wing of the commerce ministry said, "We are set to evaluate the progress of the PTA signed with Bhutan, which aims to boost trade between the two countries significantly."
The official added that bilateral trade between Bangladesh and Bhutan has increased since the PTA's implementation, marking a notable development.
The agreement, signed on December 6, 2020, and implemented on July 1, 2022, is Bangladesh's first-ever PTA, as the country does not currently have any free trade agreements (FTAs).
During the ninth commerce secretary-level meeting held on April 24-25 in Thimpu, both countries agreed to strengthen bilateral trade by reducing tariff and non-tariff barriers and enhancing cooperation in sectors such as investment, energy, transit, communication, power, and tourism.
The PTA has opened new opportunities for both nations. Under the agreement, around 100 Bangladeshi products enjoy duty-free access in Bhutan. These include baby clothes and accessories, men's trousers and jackets, jute and jute goods, leather products, dry cell batteries, fans, watches, potatoes, condensed milk, cement, toothbrushes, plywood, particle boards, mineral and carbonated water, green tea, orange juice, pineapple juice, and guava juice.
Meanwhile, 34 Bhutanese products are granted duty-free access to Bangladesh. These include oranges, apples, ginger, fruit juice, milk, natural honey, wheat or meslin flour, jams, fruit jellies, marmalades, soybean preparations, mineral water, wheat bran, quartzite, cement clinker, limestone, wooden particle boards, and wooden furniture.
Bilateral trade between Bangladesh and Bhutan reached US$22.1 million in fiscal year 2022-23, doubling from previous levels following the PTA's implementation.
Before the agreement, Bangladesh's exports to Bhutan had never exceeded $10 million but reached $9.5 million in FY22. In FY25, Bangladeshi exports to Bhutan stood at $14.3 million, according to the Export Promotion Bureau (EPB).
However, Bangladesh's trade with Bhutan and Nepal may face challenges after India cancelled its transshipment facility, which allowed goods to be sent to third countries via Indian airports and ports, including Kolkata and Nhava Sheva (Jawaharlal Nehru Port).
Industry insiders have expressed concerns that this could affect Bangladesh's ready-made garment exports to other countries.
Bangladesh's imports from Bhutan include cardamom, boulder stones, oranges, and limestone, while imports from Nepal include cane molasses, dried lentils, food preparations, medicinal plants, and vegetable-origin tanning extracts.
As Bangladesh prepares to graduate from the LDC category to a developing country, its exports will face tariffs in many markets, including developed countries.
The government has already taken several initiatives, including bilateral and regional agreements, to maintain and expand duty-free market access, a senior official said.
Economists have emphasised the need for FTAs with multiple countries to address challenges arising from graduation.
"We are negotiating with two dozen countries, including Singapore and Japan, to sign deals that will boost the country's export earnings," said an FTA wing official.
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