Trade deal with India to be renewed soon: Tofail

The government is set to renew the India-Bangladesh trade agreement soon, with the provision to allow Bangladeshi transports to use the Indian corridor for transit to Bhutan and Nepal, Commerce Minister Tofail Ahmed said yesterday.

The trade deal will be placed at the cabinet meeting on Monday for approval, the minister said, adding if the deal is signed the cost of business between India, Bangladesh, Nepal and Bhutan will fall significantly.

Ahmed's comments came in a press briefing after a meeting with Russian Ambassador to Bangladesh Alexander A Nikolaev at the secretariat office in Dhaka.

The draft of the deal has already completed vetting from the law ministry, said Manoj Kumar Roy, additional secretary to the commerce ministry.

The renewed deal will be for five years instead of three years like the current deal, which expired on March 31.

The deal will automatically be renewed if any country does not want to cancel it. In case of cancellation, the interested party will have to send in a notice six months before the expiry of the tenure.

He said the revised agreement will be signed between the two countries during the visit of Indian Prime Minister Narendra Modi in Dhaka or during Bangladesh Prime Minister Sheikh Hasina's visit to New Delhi.

The first India-Bangladesh trade deal was signed in 1972.

Under the proposed new deal, both the countries have the rights to charge a fee on transportation of goods by vehicles, he said.

This agreement will allow India to carry goods from one place to another through Bangladesh, while Bangladesh will also be able to use the Indian corridor to send goods to Nepal and Bhutan.

In other words, trucks from Nepal and Bhutan will be able to enter Bangladesh straight through the Indian corridor. Previously, they parked at a specific point along the Indian border, where the goods from Bangladesh were taken to for transport to Nepal or Bhutan.

The clauses of the agreement can be amended anytime with the consent of both the countries, he said.

In recent times, the governments of both the countries have been taking different measures to increase bilateral trade between the two neighbouring countries.

At present, the balance of trade between the two countries is heavily in favour of 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-benefit in the neighbouring market, according to Export Promotion Bureau.

But exports were supposed to increase as the Indian government offered Bangladesh duty-free benefit for all products except 25 alcoholic and beverage items since November 2012.

Generally, India exports goods worth more than $5 billion a year to Bangladesh through formal channels, and it is believed products worth another $5 billion enter through informal channels.

Alexander A Nikolaev invited the minister to attend the Saint Petersburg International Economic Forum to be held between June 18 and 20 in Russia.