Bangladesh has finally made the duty-free market-access facility under preferential trade agreement (PTA) effective for Bhutan through a much-awaited official gazette.
The customs authority has offered tax waiver on import of 16 Bhutanese products by issuing a statutory regulatory order (SRO).
The SRO, signed by Internal Resources Division (IRD) Senior Secretary Abu Hena Md Rahmatul Muneem, came into effect on August 4.
With the SRO issuance, the duty-free market access under PTA officially came into effect on both ends of Bangladesh and Bhutan. The countries signed the PTA on December 6, 2020 in a bid to reduce or waive import tariff and para-tariff.
On July 1, 2022, Bhutan made the duty-free market access facility effective for around 100 Bangladeshi products under the PTA.
A senior customs official said from now on both the countries would be able to avail the benefits under the first-ever bilateral trade agreement of Bangladesh.
He noted that the duty-free list of products went through some procedural steps, including ratification by the authorities concerned of both the states.
The official, however, said the tax benefit had been offered on the basis of trade neutral rules of the World Trade Organisation (WTO).
Under the trade neutral rules, the member countries have to impose the same rates on imported products and domestically produced goods.
In case of readjustment of supplementary duty (SD) on local products in future, the SD rates in the list would be adjusted upward or downward, he added.
In the SRO, the customs authority exempted all types of import duty, SD, regulatory duty (if applicable) on the imported products - produced or processed in Bhutan.
The exemption was given on condition of compliance with the Rules for Determination of Origin of Goods for Bhutan-Bangladesh PTA (BB-PTA).
The products include: milk, wheat or meslin flour, homogenised preparations of jams, fruit jellies, marmalades, food preparation of soybean, wheat bran, quartzite, cement clinkers, portland cement, soap, particle board of wood, ferro-silicon, bars and rods of iron or non-alloy steel, wooden furniture of a kind used in offices, and wooden furniture of a kind used in bedroom.
However, import of mineral water and aerated water would enjoy 75 per cent waiver on SD - due to having the same rate of taxes on the items at local stage.
Bhutan offered duty-free benefit on import of Bangladeshi products, including baby clothes and clothing accessories, men's trousers and shorts, jackets and blazers, jute and jute goods, leather and leather goods, dry-cell battery, fan, watch, potato, condensed milk, cement, toothbrush, plywood, particle board, mineral and carbonated water, green tea, orange juice, pineapple juice, and guava juice.
In the fiscal year (FY) 2018-19, bilateral trade volume between the countries was US$49.65 million.
Bhutan exported goods worth $81.27 million to Bangladesh in 2019, while Bangladesh exported goods worth $8.33 million to Bhutan.
According to the Export Promotion Bureau (EPB) data, Bangladesh earned $9.5 million in FY 2021-22 by exporting products to Bhutan.