Transit services not for free: Tofail | The Daily Star
12:00 AM, October 03, 2015 / LAST MODIFIED: 11:05 PM, October 03, 2015

Transit services not for free: Tofail

The road and water transit services to be taken by India, Nepal and Bhutan from Bangladesh under recent landmark agreements will not be free of charge, said Commerce Minister Tofail Ahmed.

“Nothing is free,” he said, adding that the practices followed by other countries in fixing the fee structure under such agreements will be followed.

Ahmed's comments came in an interview with The Daily Star on the sidelines of the inaugural South Asia Economic Conclave, held in the Indian capital on September 28-30.

The Confederation of Indian Industries, a not-for-profit, non-government organisation, organised the three-day event with support from its government and the World Bank.

The objective of the event was to stimulate informed dialogue between the private sector and governments of the eight South Asian nations to promote regional trade and investment.

Bangladesh and India signed a coastal shipping agreement during Indian Prime Minister's visit to Dhaka in June. The agreement allows direct regular movement of ships between the two countries.

Also in June, Bangladesh, Bhutan, India and Nepal (BBIN) signed the motor vehicle agreement that allows seamless movement of people, cargo and personal vehicles across the four countries.

Once the agreement becomes operational, vehicles carrying cargo from Bangladesh will be able to use Indian territories to reach Nepal and Bhutan and vice versa.

Nepal and Bhutan, both landlocked countries, will be able to use the Mongla port as well to ship goods.

But to make the most of this connectivity agreement between the four countries, the infrastructure on the Indian side will have to be made fully operational, Ahmed said.

The roads on the Indian side are not developed much, he added.

Asked whether Bangladesh's infrastructure such as roads and ports are ready to provide such large-scale transit facility, the minister said: “We have made much progress in preparing our infrastructure, and whatever work that needs to be done is advancing fast.”

The World Bank has also expressed an interest in providing assistance in this regard, he said.

Ahmed said discussions are ongoing among the four countries to fix the fee structure for transit facilities.

During his visit, the commerce minister met with his Indian counterpart Nirmala Sitharaman at her office and discussed issues of mutual interest.

At the meeting, he asked the Indian government to expedite the construction of roads on the Indian side in order to reap the benefits of the increased regional connectivity.

He also discussed the tariff and non-tariff barriers for exports to India from Bangladesh.

While India provides duty-free access to all goods from Bangladesh save for two items, the goods are still subjected to countervailing duties upwards of 12 percent in the neighbouring country.

Plus, different Indian states impose another layer of duty on Bangladeshi goods.

There are non-tariff barriers too. For instance, India imposed a condition on its jute importers last month that made purchases of the fibre from Bangladesh cumbersome.

India revoked the licences of its jute importers and asked them to register afresh. The traders to whom they sell the jute and jute products and the end users will also have to register their units.

The importers have to apply for a no-objection certificate for every consignment, and when applying they have to provide details of the buyer of the imported consignments.

Ahmed raised the issues to Sitharaman and she has promised to solve them.

About the initiative of the CII, Ahmed said it will help identify the problems that are getting in the way of trade and investment between the Saarc countries.

About 1.6 billion people live in the region but the trade and investment are nowhere near the potential. There is huge scope for increasing trade and investment among the Saarc countries, he added.

The three-day forum was attended by ministers, political leaders, high officials, academicians, journalists and businesspeople from all the countries of the region.

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