Immediate measures need to be taken to develop infrastructure, improve overall business environment, address political instability and remove bureaucratic bottlenecks, they said, adding that cross border communication is key to being beneficiaries of the two economies' growth on the part of Bangladesh and other low-income Asian countries.

The Centre for Policy Dialogue (CPD) organised the dialogue on 'Rise of China and India: Economic Implications for their Low Income Neighbours' at Cirdap auditorium in Dhaka.

Syed Manzur Elahi, member of CPD board of trustees and a former adviser to the caretaker government presided over the dialogue.

Speaking at the dialogue, Prof Rehman Sobhan observed China and India are markets with unlimited potentials.

India imports amounted to around US$ 150 billion and different countries are exporting to this market, he said asking why Bangladesh is not in a position to export its product.

In his speech, Syed Manzur Elahi stressed the need for maintaining political stability and congenial business environment in the country, saying Bangladesh has ample scopes to augment exports to India and China.

"We need to get infrastructure running, see that corruption is not badly affecting business," he said, emphasising diversification of exportable products.

Presenting the findings of a study on the topic, Dr Debapriya Bhattacharya, executive director of CPD, said increasing Chinese and Indian exports may crowd out exports of their low income neighbours in third markets, help grow their domestic markets and access to it provide new opportunities.

Growth capacity and increased demand can make other developing countries more attractive as platforms to produce for the Chinese and Indian markets integrating their supply chains that produce goods for the global economy and make the exporting industries of the low income Asian countries (LIAC) more competitive by providing them with low- priced intermediate goods, he explained.

Increase in Chinese and Indian exports have not reduced exports of the LIACs and rise in the FDI inflow to China and India is not reducing FDI inflow to the LIACs ,he said, adding that cooperation with China and India could be helpful in facilitating strengthened global integration of these countries.

Debapriya said integrated infrastructure facilities are essential for the regional and horizontal integration of the low-income Asian countries with China and India.

Bangladesh has potential to be the hub of industrial activities in the South Asian region, covering Nepal, Bhutan, seven northeast Indian states and resource-rich northern part of Myanmar, he pointed out.

Debapriya stressed the need for improving overall business environment in attracting foreign direct investment (FDI), de-politicisation of FDI related economic decisions and efficient and transparent processing of FDI proposals.

Speaking at the dialogue as guest of honour, Veena Sikri, the outgoing Indian high commissioner, said Bangladesh's strategic location enables it to be a bridge between India and South-East Asia, and India and China as well.

Yet the key to benefiting Bangladesh and other low-income Asian countries from China and India's economic growth lies in connectivity, be it through road, rail, river or ports, she mentioned.

Bangladesh can play a useful role as a bridge for India-China economic cooperation in facilitating movement of goods and services and enhancing cooperation in areas like civil aviation and tourism between India and China, she added. "In particular, Bangladesh can help link Kunming and Myanmar with India's Northeast."

India and Bangladesh can try operationalisation of proposals like Sealdah-Joydevpur train service, Akhaura-Agartala rail link and access to Chittagong port for goods from India's northeast, Sikri made a suggestion.

Another guest of honour Chai Xi, the Chinese ambassador in Dhaka, said his government takes seriously with the issue of trade imbalance with certain countries, especially the least developed countries (LDCs) in the region, and has made substantial efforts to raise import from these countries, including according tariff-free access and preferential tariff treatment and providing government subsidies.

As China has given Bangladesh duty free access of 162 items to its market, he said, the Chinese government would continue to take into positive consideration the duty-free access for more categories of commodities from relevant countries.

Chinese people are yet to live a well-off life and China still faces many difficulties and challenges¸ he went on.

"We will work to strike a proper balance between urban and rural development, development among regions, economic and social development," Chai Xi said, adding that China's sustainable development requires harmonious and prosperous neighbouring environment.

Mushfiqur Rahman, chairman of the Parliamentary Standing Committee on Finance Ministry, said there is a scope for increasing Bangladesh exports to China and India if business environment is improved.

"We talk about trade deficit with India but don't talk about trade imbalance with other countries. There is a psychological barrier and it needs to be removed," he noted.

Echoing Mushfiqur Rahman, Tofail Ahmed, a former commerce and industries minister, said trade deficit with China is not mentioned but that with India is frequently raised, terming it a politicised environment. "Politicians of Bangladesh and India cannot trust each other."

"We should try how much we can increase our exports to China and India," he noted. "China has given duty-free access of 162 products to its market but we could not avail of the opportunity."

Farooq Sobhan, president of Bangladesh Enterprise Institute, observed that Asia is changing at a very faster pace but Bangladesh has not been a part of this process.

"We now need to see how it can fix into the evolving scenario in the region. There has been a major setback in the power sector in the recent years and we cannot afford luxury of a corrupt country any more," he added.

Abdur Razzak, a member of the parliament, said while Bangladesh has a serious mistrust with India and many people in India also believe that there are anti-Indian activities going on here, adding that mistrust between the two countries should be removed.