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Executive Summary

 

India continues to remain one of Bangladesh’s major trading partners, accounting for 8.7 per cent of Bangladesh’s global trade in FY2008‐09, a year when India was Bangladesh’s fourth most important trading partner. However, with an import to export ratio of 10.3 to 1 and an increasing bilateral trade deficit, issues of barriers to trade with India and search for avenues to enhance Bangladesh’s export opportunities in the growing Indian market, have assumed high significance and prominence in related discourse in Bangladesh in recent times. Underlying factors contributing to India’s strong presence in Bangladesh’s import market are well known. Imports from India help Bangladeshi enterprises access inputs at lower costs and enable these to remain competitive in domestic and foreign markets; import of consumer goods help stabilise prices of some key essential items in Bangladesh. However, all these does not in any way undermine or minimise the importance of the need to enhance and realize Bangladesh’s own export opportunities in the Indian market.

 

In recent times, India has also mooted the idea of signing a Bilateral Free Trade Agreement with Bangladesh. In spite of the initiatives under the various RTAs and also bilateral market access initiatives export from Bangladesh to India has tended to remain at low levels reaching USD 276.6 million in FY2008‐09 which was a mere 1.8 per cent of Bangladesh’s global export. The above trends notwithstanding, recent dynamics of trade between the two countries does indicate new developments with regard to Bangladesh’s export to India. Evidence suggests that Bangladesh’s export to India has been on the rise in the recent past. In view of above, the present article attempts to address the following issues relating tocstimulating Bangladesh’s exports to India.