The Financial Express


Trade imbalance with India

| Updated: June 28, 2018 21:27:44

Trade imbalance with India

The outgoing Eid-ul Fitr festival witnessed not so much sales of clothes, footwears and other items by the local shop owners. As usual, buyers from the affluent families went abroad, mainly India, for Eid shopping.

The situation was not the same as last year. Some shop owners say they hardly found time to breathe last year, facing the onrush of customers. A shop owner at the Benarasi Palli at Mirpur said he sold saris and other apparels worth Tk 300,000 on an average daily during Eid-ul Fitr time in 2017. But this year he could sales barely reached Tk 100,000 a day.

The truth is that a large number of affluent and middle class families preferred to visit India and other parts of the globe for shopping. Our neighbouring country India has eased visa process for tourists. For that reason, the exodus of tourists to India from Bangladesh is so high.

The hotels and restaurants in Kolkata remain overflowed with Bangladeshi tourists for most of the year. Since it has become easy to get Indian visa with at least one-year validity for multiple use, more people now prefer to go to India ahead of Eid. The number of Bangladeshis travelling to India ahead of Eid exceeded 100,000 this year, according to an estimate.

On its part, Bangladesh government needs to protect the country's business against aggressive cross-border trade and conservative approach to welcoming Bangladeshi products by neighbouring India.

Analysts say India got, in fact, whatever it had sought from Bangladesh. But unfortunately our country failed to get its due share even after holding a number of bilateral discussions. In theory, our relationship with India is very warm and cordial. But in practice, India continues to impose various barriers (anti-dumping measures included) on the way of accessing our products to their markets.

The bilateral relations will never improve if both the sides don't change their attitudes. Despite a large number of cooperation tools and confidence building measures, the country's trade deficit with India has swelled in recent years with import continuously rising while export not at all up to even a moderate mark. 

The gap amounted to US$ 5.5 billion in the last fiscal only, according to a recent study. The country's trade with India marked incremental imbalance during the last one decade. According to the Bangladesh Bank's data, the country imported goods worth about $ 6.036 billion from India in the last fiscal as against total exports worth $ 456.6 million only.

Local businesses say if the country does not provide protection to its businesses, local business will be hit hard. Businesses will not be able to sustain in this imbalanced trade competition with that of India's as their government provides a huge amount of incentives to the industries and businesses. On this count, Bangladesh does not appear to provide such facilities to the industries.

On the other hand, Bangladeshi products do not have enough access to different parts of India, especially north-eastern states and Paschim Bango where there exists good demands for our goods. Different barriers imposed by India pose as potential threat to their natural movements, as has been said earlier.

The government is losing a huge amount of foreign currencies due to local patients' preference to go abroad, mainly India, for treatment. This is a much-talked about issue. The government does not seem to give proper attention to it.

Commerce Minister Tofail Ahmed admitted that there exists a huge trade imbalance with India. He said the country's exports to India have not been growing at an expected level despite duty benefits in place. India has awarded duty-free access for all Bangladeshi goods, except 25 alcoholic and beverage items, to the Indian market. But it has imposed a 12.5 per cent countervailing duty on apparel and up to $329 anti-dumping duty on jute exports.

Such trade barriers need to be removed through threadbare discussions. But here, India should take the lead with open mind.

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