India looks to form a common South Asian market
India has devised its trade policy for 2015-20 focusing mainly on building a common South Asian market as regional trade is growing among the Saarc nations, Indian Commerce Secretary Rajeev Kher said yesterday.
A common market is featured with a lot of harmonised policies like common currency, same taxation policy and free movement of people.
He, however, did not go into details about the prospective common market.
“We have placed the regional trade strongly in the trade policy for 2015-20. A South Asian common market is essential for strong economic growth,” Kher told reporters after a meeting with Commerce Minister Tofail Ahmed at his secretariat in Dhaka.
The two parties discussed how the two neighbouring countries can play bigger roles in global trade as well as further market liberalisation and higher market access to each other's country, Kher said.
Ahmed said a new horizon in bilateral trade has started with the renewal of trade agreement between India and Bangladesh.
The renewed trade agreement is likely to be signed during the forthcoming visit of Indian Prime Minister Narendra Modi to Bangladesh next month, he said.
The new agreement, the duration of which has been extended to five years from the existing three years and with an option for auto-renewal, will allow Bangladeshi goods-laden trucks to Bhutan and Nepal through the Indian territories, he said.
Previously, Bangladeshi trucks could not enter the two countries as there was no agreement in place with India for using its land for traffic movement, he said.
There will be many makeshift markets along the India and Bangladesh bordering lines so that the people of those areas can have market access as well.
At present, there are three such makeshift markets in operations along the adjoining areas of the two countries.
He said the Indian secretary demanded duty-free export of 225 items under the South Asian Free Trade Area (Safta) regime. The country has already extended duty benefits to 23 of the items. The meeting with Ahmed yesterday concluded Kher's two-day visit to the country.
Earlier on Sunday, at another commerce secretary level meeting, Kher demanded reduction of duty on exports of pomegranate and orange from India and permission to set up pasteurised milk factories in Bangladesh.
At the secretary level meeting, the Indian side agreed to accept Bangladesh Standards and Testing Institution's (BSTI) certification of 25 items for export to India, mainly dairy and food products.
India will also consider removal of 12.5 percent countervailing duty (CVD), a domestic tax to protect the local industry, on export of Bangladeshi garment items to India.
They also agreed to consider the removal of trade barriers on export and use of jute bags from Bangladesh.
The neighbouring country also agreed not to stop the export of some essential commodities like cotton to Bangladesh without prior notice.
The balance of bilateral trade between the two countries is heavily tilted towards India. Exports to India declined 19 percent year-on-year to $456.63 million in fiscal 2013-14, mainly due to a slowdown in shipment of garment items that enjoy duty benefits in the neighbouring market.
In fiscal 2012-13, exports to India totalled $563.97 million, according to the Export Promotion Bureau.
Import from India stood at $6.04 billion in fiscal 2013-14 and $4.78 billion the year before, according to data from the commerce ministry.
It is believed products worth another $5 billion enter Bangladesh through informal channels.
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