High hope for trade
After a long wait, 61 Bangladeshi products on a negative list, mostly readymade garment items, are going to get duty-free access to India, reported BBC Bangla Service.
The Indian government already approved a related proposal of Bangladesh that is expecting an announcement during Indian Prime Minister Manmohan Singh's visit to Dhaka next week, said the August 30 report, quoting unnamed sources of the Indian commerce ministry.
During Manmohan's visit, Bangladesh and India might also sign a memorandum of understanding (MoU) on the use of Chittagong and Mongla seaports as transit ports for Indian goods, high officials in Dhaka told The Daily Star.
Bangladesh Commerce Secretary Ghulam Hossain said there has been no official communication from India on the matter of duty-free access for the 61 products. He however acknowledged that Bangladesh had made such a proposal.
Exports from Bangladesh to India will increase two to three times the present volume, if the new access is granted, he said. If that happens then Bangladesh's annual export to India will cross $1 billion.
Bangladesh's second highest trade deficit is with India, right after China. Bangladesh's import from India was $3.21 billion, while its export to that country was $400 million in fiscal year 2009-10.
India earlier offered Bangladesh a quota of exporting 10 lakh pieces of garments, and garment exporters of Bangladesh met the quota in seven months, the commerce secretary said.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Shafiul Islam Mohiuddin, and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Selim Osman said duty-waiver will definitely increase export volume.
Of the 61 items, 47 are garment products including pants, shirts, blouses, skirts, kids' garments, trousers, cotton nightshirts, jeans, pajamas, swimwear, and tracksuits. The remaining 14 include nuts, paper and tissue paper, cables, plastic products, coconut oil, paper board, corrugated tin sheet, natural rubber, silk fabrics, etc, according to the Bangladesh commerce ministry.
Bangladesh Prime Minister's International Affairs Adviser Gawher Rizvi earlier told The Daily Star that Dhaka persuaded Delhi to allow duty-free access to Bangladeshi products. At one time there was a list of 450 negative products, which has now come down to 61.
"We are still talking, and when Dr Manmohan Singh comes, we will try to make further progress in this regard," he said.
Our New Delhi correspondent Pallab Bhattacharya reported that Indian Commerce and Industries Minister Anand Sharma had a series of meetings with top officials of his own ministry and also with those of revenue, foreign, and home ministries discussing economic and security aspects of India-Bangladesh relations on Thursday.
Sharma enquired about the revenue implications of granting duty-free access to the products Bangladesh requested for, about the rules of origin, and local value addition in Bangladesh, according to official sources.
Bangladesh had for the last one year been pressing India for permitting all 61 items to be taken off the list of negative goods the latter maintains under South Asian Free Trade Agreement (SAFTA), because Dhaka is keen to sell those to India in a bid to reduce a massive gap in bilateral trade.
MoU ON SEAPORTS
Sources in Bangladesh's foreign and shipping ministries said the two countries prepared a draft of an MoU regarding use of Chittagong and Mongla seaports by India for its goods in transit -- which is now awaiting a review by India.
After India sent the draft to Bangladesh in April, Bangladesh incorporated views of different ministries concerned before recently sending it back to India.
"We are expecting Indian opinion to reach Dhaka by September 5. Unless there is any disagreement on use of words, the MoU will be signed during Manmohan's visit," said a highly-placed government official of Bangladesh.
A foreign ministry official said the Indian goods, which will be shipped through the seaports, will be carried by railway and waterway.
Primarily one or two routes will be used to carry goods on a trial basis, said a commerce ministry official.
During Manmohan's visit, a framework of agreement will also be signed on areas of further cooperation between the two countries. Some more MoUs and agreements might be signed regarding power purchase, Teesta water sharing, and demarcation of land borders, officials said.
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