Bangladesh's trade with Bhutan, Nepal marginal

Bangladesh's bilateral trade with Bhutan and Nepal is marginal compared to its overall external trade despite having a preferential trade arrangement with Bhutan.

Bangladesh signed the first-ever preferential trade agreement (PTA) with Bhutan in 2022.

In FY23, Bangladesh exported 48,067 metric tonnes of goods worth Tk 4.20 billion to Bhutan and Nepal through the Indian land customs stations, according to Bangladesh customs data.

However, export quantity and value declined to 35,908 metric tonnes and Tk 3.22 billion, respectively, in FY24.

Besides, from July to March of FY25, Bangladesh exported 26,999 metric tonnes of goods worth Tk 2.77 billion to Bhutan and Nepal.     

However, imports from the two countries increased in FY24 year-on-year. Bangladesh imported 2,781,013 metric tonnes of goods worth Tk 12.18 billion in that fiscal year, which was Tk 10.16 billion for 1,879,755 metric tonnes in FY23.

Between July and March of this fiscal year, Bangladesh imported 1,949,454 metric tonnes of goods at a cost of Tk 11.72 billion.  

India's decision to cancel the transshipment facility made industry insiders in Bangladesh concerned over the impacts on trade with Nepal and Bhutan.

India cancelled the transshipment facility for sending goods to third countries through its airports, as well as the Kolkata and Nhava Sheva ports, which may impact Bangladesh's readymade garment exports to other countries.

Bangladesh's imports from Bhutan include cardamom, boulder stone, orange, and limestone, while it brings in cane molasses, dried lentil, food preparations, plants or parts used in pharmacy, and tanning extracts of vegetable origin from Nepal.

Kamruzzaman Kamal, director at PRAN-RFL Group, said Bangladesh's trade with Nepal could be increased if the latter changes its valuation policy for the former's goods similar to India.

"Nepal has a discriminatory valuation policy for Bangladeshi export goods," he added.

Bangladeshi confectionery items are valued at $2.25 per kg, while it is $1.32 per kg for similar Indian products, he said.

Nepal's valuation of Bangladeshi biscuits is $2.0 per kg, which is $1.0 per kg for similar Indian products. The same situation exists for cookies. Bangladeshi cookies are valued at $2.0 per kg, while it is $0.9 per kg for Indian ones, he further said.

PRAN-RFL Group exports goods worth $10 million per year to Nepal and Bhutan, Kamal added.

As per the World Trade Organisation (WTO) rules, its member countries cannot impose any discretionary tariff on each other.

Sanjoy Kumar Ghosh, head of supply chain management of BSRM, said India's decision would impact Bangladesh's exports to other countries, except for Nepal and Bhutan.

"We occasionally import ferrosilicon from Bhutan. That will not be impacted," he added.

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