Develop transport infrastructure to derive maximum trade benefits

Indian External Affairs Minister Yashwant Sinha has stressed the need for strengthening and expanding transport infrastructures to derive maximum benefits from the proposed free trade agreement (FTA) between the two neighbours.

Speaking at a luncheon meeting hosted by Metropolitan Chamber of Commerce and Industry (MCCI) in Dhaka yesterday he said the existing infrastructures need to be upgraded to ensure better and free movement of goods between the two countries.

The volume of goods would increase after signing the free trade agreement, he said.

India has offered to sign an FTA with Bangladesh and both the countries have agreed to initiate discussions on it in September-October this year.

The Indian minister laid special emphasis on developing rail link to introduce containerised rail services between the two countries.

"It is also necessary that we consider developing multi-modal transport arrangements which would result in a better utilisation of inland water transit routes," he said.

Turning to FTA, Sinha said India would not go for a free trade agreement with Bangladesh in ad hoc basis. "India wants to sign a comprehensive agreement which would ensure sustainability of trade relations," he added.

Sinha suggested that India and Bangladesh should exploit vast trade and investment opportunities in the region, especially in the northeastern states of India.

India has identified its northeast provinces as a bridge for expanding India's trade ties with contiguous countries and constructed a road linking Manipur with Myanmar which was inaugurated in 2002, he said.

Sinha, who came to Dhaka to co-chair the 6th meeting of the Joint Economic Commission, mentioned that India is conducting a study with Myanmar on a transit route from Mizoram to the Bay of Bengal.

"Bangladesh can also participate in and benefit from the process of opening up of this region by taking advantage of its position as a regional hub and developing the Chittagong seaport as an entrepot, he said.

On para-tariff and non-tariff barriers imposed by India on Bangladeshi goods the Indian minister said a Joint Working Group has already been formed to address the issue and the Group is expected to meet in Dhaka shortly.

Citing Sri Lankan experience of FTA with India, Sinha said it could be an encouraging example for Bangladesh. Sri Lankan exports to India have increased by 137 per cent after the FTA with further expansion of their export basket, he added.

Sinha hoped that Bangladesh's export basket and foreign investment would also see positive signs once the FTA is signed with India.

Welcoming the latest development on the issue of FTA, Tapan Chowdhury, president of MCCI urged both the governments to consider recommendations of trade bodies in signing such an agreement.

He laid emphasis on removal of all para-tariff and non-tariff barriers and said, "Bangladesh and India should take lessons from ASEAN free trade agreement in respect of exclusion list, inclusion list and sensitive list."

Chowdhury said SAPTA failed to yield the desired benefits to the South Asian countries as tariff cuts were not meaningful, actively traded goods were not given tariff preferences, and modalities of removal of non-tariff and para-tariff barriers were not well-articulated in the arrangement.

He also urged the two countries to depoliticise trade and economic relationship and shun narrow party interest for national economic gains.

Foreign Minister M Morshed Khan, Commerce Minister Amir Khosru Mahmud Chowdhury, Awami League General Secretary Abdul Jalil, State Minister for Foreign Affairs Reaz Rahman, Foreign Secretary Shamsher Mobin Chowdhury, Commerce Secretary Suhel Ahmad, FBCCI President Yussuf Abdullah Harun, ICC-B President Mahbubur Rahman and DCCI President Matiur Rahman were, among others, present at the function.

Former MCCI President Latifur Rahman, former advisor to the caretaker government Rokia Afzal Rahman, leading businessmen, government officials and diplomats also attended the meeting.