Bangladesh and India yesterday agreed to sign the Comprehensive Economic Partnership Agreement (CEPA), a greater economic cooperation deal, with the view to boosting bilateral trade.
Indian Commerce Minister Suresh Prabhu and Bangladesh's Commerce Minister Tofail Ahmed announced the signing of the deal at a joint press conference after a delegation meeting between the two countries in Dhaka.
They, however, did not mention any specific date for the inking of the trade deal.
“We will sign the CEPA for continuation of duty benefit on export to India even after graduation from the least developed country bracket to a developing one in 2027,” Ahmed said at the press conference. Currently, Bangladesh as an LDC enjoys zero-duty benefit on exports to India for all goods save for 25 alcoholic beverage items.
Trade analysts said Bangladesh stands to benefit from the deal if it is negotiated carefully.
The CEPA is a greater partnership deal between two countries or with any trade bloc, under which special treatment is considered in areas of trade, investment, energy cooperation, logistic support and so on.
For instance, there is a possibility of more Indian investment in Bangladesh, more energy cooperation and aid for trade between the two countries under the CEPA deal as it is considered as a greater partnership, said Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue.
Under the partnership agreement, both countries will work towards improving the logistic and trade-related capacities of Bangladesh.
“In this case, both countries will have to recognise their economic differences,” Rahman said, adding that the duty-free export of goods from Bangladesh to India will have to continue even after signing the CEPA.
The CEPA might not affect the local industries as it is a partnership deal only, said Ahsan H Mansur, executive director of the Policy Research Institute, another think-tank.
“There is nothing wrong if the deal is signed. There is scope for more investment from India and preferential treatment in trade,” he said.
India has signed the CEPA with some countries like South Korea and Japan and is in negotiations with the ASEAN (Association of South East Asian Nations) to hammer a similar deal.
Apart from the CEPA, the ministers also talked on some other pending issues that are acting as impediments to the growth of bilateral trade.
Prabhu has assured that his government will work on lifting the anti-dumping duty on the export of jute and jute goods to India.
Local exporters were left with their hands tied to their backs after India in January last year imposed an anti-dumping duty of up to $352 on jute and jute goods.
Prabhu also said India will accept the certification of the Bangladesh Standards and Testing Institution. “We have decided to address the issue of the BSTI.”
Bangladeshi exporters have been complaining that the Indian side does not accept the certification of the BSTI although the neighbouring country had previously agreed to accept the country's standards certification for 21 items.
This time, the Indian side has agreed to accept the certification for 27 Bangladeshi goods, Ahmed said.
The two ministers said six more border haats will be set up soon.
Currently, four such haats are in operations and another one along the Dalu-Nakugaon border will be opened within one month, Ahmed said.
Prabhu said India would be a $10 trillion economy by 2035, so Bangladesh has an opportunity to attract more Indian investment as a partner country.
He went on to invite Ahmed to attend a Bangladesh-focused investment conference scheduled to be held in India next month or in November.
Prabhu also invited the Bangladeshi minister to attend the partnership summit to be held in India in January next year when Bangladesh will have the opportunity to bag more Indian investment.
He touted the tourism sector as a major job creator and advised Bangladesh to promote the tourism facilities in the Sundarbans, which spans the two countries.
A joint communiqué issued on the outcomes of the meeting said Ahmed encouraged the Indian investors to invest in the special economic zones being developed by the Bangladesh Economic Zones Authority across the country.
Recognising the importance of Petrapole-Benapole land ports, the ministers agreed to remove impediments affecting smooth clearance of cargo at this location.
They agreed for a one-time push to remove congestion of cargo trucks with effect from October 15 this year for a period of two months, the communiqué said.
They also agreed to support the improvement of infrastructure of land customs stations in Bangladesh adjoining Tripura border.
Noting the need to restore the pre-1965 railway connectivity between two countries, the Bangladesh side proposed a new end-to-end train service between Dhaka and Siliguri with customs and immigration checks at the starting points at both ends, according to the joint communiqué.