Commerce secretaries to meet next month
A meeting between the commerce secretaries of Bangladesh and India is likely to be held in Dhaka next month to review the progress towards signing a comprehensive economic partnership agreement (Cepa) to increase bilateral trade and investment.
"The date has not been finalised yet. However, we are trying to hold the commerce secretary-level meeting on the Cepa issue in August in Dhaka," said Senior Commerce Secretary Tapan Kanti Ghosh over the phone yesterday.
Prime Minister Sheikh Hasina is scheduled to visit India in September this year to discuss bilateral issues, including the Cepa, with her Indian counterpart Narendra Modi.
The last commerce secretary-level meeting on the Cepa issue was held in New Delhi last year, said Ghosh, adding that both countries were also exchanging trade data for starting formal negotiation on the Cepa issue.
However, the formal or final negotiation for signing the agreement will begin after the completion of negotiations at other levels, he said.
India has been taking time to start the formal negotiation as the country deems it necessary to conduct further studies on it.
The bilateral trade will increase if the rupee is used and a debit card is launched for Bangladeshis visiting India, said Ghosh.
Nearly 25 lakh Bangladeshis annually visit India, mainly for medical treatment.
If they are allowed to use a dual currency debit card, meaning that of the rupee and taka, Bangladesh will be able to save a lot of dollars.
Bangladesh's exports to Indian markets have also been increasing over the last couple of years because of a rising demand for locally-made items, especially garments, said Ghosh.
Last fiscal year, $2.2 billion-worth merchandise was shipped from Bangladesh to India, including over $1 billion-worth garment items, he said.
Garment export from Bangladesh to India has been rising for the opening of retail outlets by Western retailers and brands in the Indian markets.
The commerce ministry has already formed two separate committees to start negotiations with India over signing the proposed Cepa to boost bilateral trade and investment in the post-LDC period.
In September last year, both Prime Minister Sheikh Hasina of Bangladesh and Prime Minister Narendra Modi of India in a joint statement welcomed the finalisation of a joint feasibility study which recommended that a Cepa would be beneficial for both countries.
They directed trade officials on both sides to start negotiations within 2022 and to complete those at the earliest and in time for Bangladesh's final graduation from the least developed country (LDC) status, said the joint statement.
Annually, Bangladesh imports nearly $15 billion worth of goods like textiles and fabrics, industrial raw materials and intermediate goods, food items, cotton and chemicals for industrial use.
On the other hand, as an LDC, Bangladesh has been enjoying duty-free benefits on export to India under South Asian Free Trade Area (Safta), a free trade arrangement of the South Asian Association for Regional Cooperation (Saarc).
In August last year, the joint study said Bangladesh might not make a large gain from a Cepa. This was due to the fact that Bangladesh would lose duty-free market access provided for it being an LDC.
Comparatively, India will make a larger gain from the trade deal primarily through the removal of high tariff rates it currently faces in Bangladesh, said the study.
Bangladesh Foreign Trade Institute (BFTI) and the Centre for Regional Trade (CRT) of India jointly conducted the study based on trade data between 2015 and 2020.
If signed, the Cepa will be the first free trade agreement of its kind as Bangladesh has till date signed only a preferential trade agreement with Bhutan in December 2020.
The proposed deal, which calls for a withdrawal of duties, is expected to boost Bangladesh's exports by 190.15 per cent and more if transaction costs are also reduced through improved connectivity, according to the study.
India's exports to Bangladesh are expected to increase by 188 per cent. The Cepa will increase Bangladesh's GDP by 1.72 per cent and India's by 0.03 per cent, the study found.
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