The Hindu Business Line : India’s move to import apparel articles from Bangladesh to address trade imbalance

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India’s move to import apparel articles from Bangladesh to address trade imbalance

G. Srinivasan

New Delhi, Sept. 17 India’s decision to import eight million apparel articles in one calendar year from Bangladesh without any duty and conditionality of sourcing of fabric or port restrictions would go a long way in providing improved market access for its north-east neighbour .

Official sources told Business Line here that this would also help to address the existing imbalance in bilateral merchandise trade, heavily tilted against Dhaka.

The two-way trade has been growing fast and has crossed $2.5-billion mark during 2006-07, as compared with $2.1 billion in the previous year, a growth of around 21 per cent.

MoU with Dhaka

The sources said that signing of the Memorandum of Understanding (MoU) between India and Bangladesh in Dhaka on September 16, 2007 and the Procedural Arrangements cover 185 tariff lines at six-digit level.

They said that this was also in line with the Prime Minister, Dr Manmonhan Singh’s statement at the SAARC summit held here this year to advance the schedule for reducing import duties to zero for LDCs in South Asia from the original date of December 2008 to end 2007 and to also consider reducing the sensitive list in respect of these countries.

Sources said that the Commerce Secretary, Mr Feroz Ahmed, who was present on the occasion, hoped for additional initiatives like tariff quota regime (TQR) for apparel articles to strengthen trade and economic linkages with India.

He asked the Bangladesh business community to diversify basket of exportable items and be price competitive to be able to export to India, sources said.

When contacted about the MoU between India and Bangladesh, the Minister of State for Commerce, Mr Jairam Ramesh, said this would enable Bangladesh to earn additional earning of anywhere between $50-70 million every year.

He said that by taking a cue from New Delhi for its stand of allowing duty-free textile goods from Bangladesh, Dhaka should take a pro-active stand in permitting Indian companies to invest in that country, including the proposal of the Tatas for $3 billion investment in Bangladesh, pending for quite some time.

Mr Ramesh who visited Dhaka in July 2007, also listed out several recent initiatives New Delhi had taken to provide comfort to Dhaka through commercial and economic cooperation.

They include, he said, reduction of duties on cement imports from Bangladesh, putting certification process on ‘fast track’ to facilitate cement exports to India from Bangladesh, signing of an MoU between BIS (Bureau of Indian Standards) and its counterpart BSTI in June 2007, India forwarding draft of comprehensive motor vehicle agreement to government of Bangladesh to facilitate movement of goods (including container cargo) and launch of much-awaited India-Bangladesh Chamber of Commerce and Industry in July 2007.

Officials said that India is looking forward to the next meeting of Joint Working Group on Trade (JWG) in Dhaka in November 5-6, 2007 which would enable both the countries to discuss ways and means for further mending connectivity and bolstering trade and economic relations.

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