Cabinet may endorse Indo-Bangla MoU modality tomorrow
The government has finanlised the modality to sign a memorandum of understating (MoU) with the Indian government to export eight million pieces of readymade garments (RMG) every year.
The commerce ministry has already submitted it for the approval from the Council of Advisers, which will hold its regular weekly meeting tomorrow.
The modality will be sent to the Indian counterpart for its consent, and, the ministry sources hoped, it would not take more than one month to start exporting the duty-free RMG pieces to the market of the neighbouring country.
However the Indian Cabinet's nod is necessary to ink such an agreement.
"We hope we would be able to send the modality to the Indian government next week as tomorrow's meeting of the Council of Advisers might give assent to the modality we have finalised, " said NM Ziaul Alam, deputy secretary to the Ministry of Commerce.
Although India primarily made the offer two years back under the South Asian Free Trade Agreement (Safta) framework, the authorities took time to reach a consensus on such a modality for exporting the garments without any duty.
Earlier, India compelled Bangladeshi exporters to use Indian yarn to make a significant portion of the exportable RMG goods to India and asked for exporting those through a particular port.
Subsequently, the neighbouring country relaxed many of its stringent conditions for the yearly export of the eight million RMG pieces from Bangladesh.
These stringent conditions, which were conveyed to Dhaka in a letter from Delhi on November 8, 2006, included introducing a quota monitoring system and seeking prior permission from the Indian Textile Committee before the export.
As per the modality, India agreed to allow Bangladesh to make its RMG products either by its own or any other country's fabrics.
India also lifted the restriction from export of the products under the proposed duty free deal only through six land ports and now it agreed to allow exports of those through sea, air or land routes.
Indian Commerce and Industry Minister Kamal Nath in 2005 promised to Bangladesh that his country would allow a duty-free entry of its eight million pieces of RMG products with a view to boosting bilateral trade and reducing imbalance in this regard.
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