The Hindu Business Line : Garments import from Bangladesh a significant step

The imports would be duty-free and without any hamstring conditions. For example, there is no restriction on the entry port. For the neighbour — one of the world’s ‘least developed countries’ — it would mean additional exports of $70 million, according to the Union Minister of State for Commerce and Industry, Mr Jairam Ramesh.

This decision is significant in many ways. First, it marks a break from the past because ‘garments’ have been in the negative list of imports. Second, it is a demonstration of India’s commitment to the new policy of engagement in the SAARC region, where India has said it would not seek reciprocity. Third, this comes close on the heels of the lifting of ban on investments from Bangladesh into India. As such, it marks another step towards engaging Bangladesh — an immediate outcome could be the paving of way for Indian investments into Bangladesh. (Waiting in the wings is the Tata group, which has said it wants to invest $3 billion in Bangladesh in the sectors of power, iron and steel.)

Facilitating trade

Mr Ramesh, who spoke on ‘India’s economic relationship with its neighbours’, observed that for many decades India had adopted a ‘what will I get in return’ line with regard to trading with its neighbours. “My sympathies are entirely with our neighbours,” he said, noting that insistence on reciprocity made things difficult because most of what the neighbours wanted to sell to India comprised products that India already produced — such as tea, coffee, pepper, garments.

Blocking imports of such products from neighbours anyway made no sense because of the relatively small size of such imports vis-À-vis the domestic industry. For example, Mr Ramesh said, India produced 70 million tonnes of pepper, but the industry would get worked up if two million tonnes of pepper came from Sri Lanka.

“These days, when I meet my fellow Commerce Ministers (of the region), I ask them, ‘what can we buy from you’, rather than be a salesman for Indian products,” Mr Ramesh said.

He also said that trade should be facilitated, with no non-tariff barriers introduced. (Mr Ramesh always points out that palm oil cannot be imported from Kochi — something he feels should go.) Liberalisation of trade in merchandise should be accompanied by liberalisation of trade in services and investments.

It was in line with this thinking that India lifted the ban on FDI from Bangladesh two months ago, the Minister said. Today, the only country in the region that cannot invest in India is Pakistan. The Ministry of Commerce has been trying to get this rectified.

Sub-regional cooperation

In the SAARC region, India is a very large country which sort of makes it an unequal partner in the eyes of the smaller neighbours. A good way of promoting regional cooperation is to encourage different regions of India to engage independently with the countries in the neighbourhood, Mr Ramesh said.

For example, the North East could engage with Bangladesh and Myanmar. Gujarat, Rajasthan and Jammu & Kashmir could engage with Pakistan and Afghanistan, and the southern States with Sri Lanka.

Former Chief Vigilance Commissioner Mr N. Vittal, who was present at the meeting, asked Mr Ramesh if the Government of India was prepared to give States the autonomy to negotiate with other countries. To this, the Minister replied that the idea was radical, but in the coming years federal coalition governments would give in to their constituent regional parties if they demanded such autonomy for their regions.

“It is an idea whose time has come. It is not without its backers,” Mr Ramesh said.

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