Wednesday | 15 January 2025 | Reg No- 06
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Wednesday | 15 January 2025 | Epaper

Indian proposal of joint partnership

Cooperation must precede level playing field

Published : Friday, 2 March, 2018 at 12:00 AM  Count : 1351
Haradhan Ganguly
In the bilateral trade relation with Bangladesh, India proposed coordinated joint partnership in a recent meeting held between trade secretaries of Bangladesh and India. India thinks only "free trade agreements" (FTA), which as modus operandi are running, will not be sufficient for having a dynamic breakthrough in bilateral trade relation. India's proposal will have an extended approach of cooperation for a wide field, including communication, energy, technology etc. It is India's views. Bangladesh will examine the proposal our trade secretary conveyed.

It is a fact at present as there is no bilateral trade relation between Bangladesh and India. But as complementary efforts, there are multilateral agreements like SAFTA (South Asian Free Trade Area), SAPTA (SAARC Preferential Trading Agreement) and APTA (Asia Pacific Trade Agreement). In these agreements, both Bangladesh and India are partners.

India's proposal demands a very guarded scrutiny beyond emotion stemming from evolving historical and political going on. To India, bilateral and regional economic co-operation is an integral part of her foreign trade policy, complementing the multilateral trading system. Prior to the economic reforms process initiated in 1991, India had adopted a very cautious and guarded approach to regionalism. Our scrutiny needs to have cautious stepping to save our economic interest as an ongoing reality in bilateral trade tells the story of serving India's interest.

Our mounting trade gap is going in favour of India. One example is sufficient. In last fiscal year (2016-17), trade between two countries reached to 680 crore USD. Bangladesh exported commodities worthy of only 67 crore 24 lakhs USD. This is a scenario of trade between two countries. But correcting measures from India generally fall in cooperation. But we find responsiveness not up to the mark commensurate our interest. Not to cite of "Teesta Agreement" only.

It is a fact that almost all our exportable to India are enjoying zero tariff. It is a good sign of ovation of friendliness from India. But Bangladesh is not able to carry the fruits of it due to India's various tariffs and non-tariff barriers as we are telling it often. As we are enjoying zero tariff facility in Indian market, only free trade agreement (FTA) will not serve the purpose in its true sense. Remember it, the economies of India and Bangladesh are not same and strides of the two countries are not on same stepping. Priorities are different. Any agreement we reach, we must think about we are still in least developed countries (LDCs). So trade benefits should go likewise.

Agreement or any proposal for cooperation must precede level playing field. It is not denied that India is a big economy. Her developed infrastructure and advancement of modern sectors entail lower cost of production. We must accept this reality.

But when India at times takes resort to sudden steps, those have negative impact on our exports and economy, then the meaning of cooperation is questioned. Take two examples. Her anti-dumping tariff on our jute goods brings about total halt of our jute products export to India. As a result, many jute industries are closed down and many are compelled to downsize production volumes. Hundreds of workers lost their jobs. Total things are rolled down to court now.

Second instance, Bangladeshi footwear and leather goods exporters are bracing themselves for tough competition in the global market after the Indian government recently announced a mega financial incentive for sector's revival. Both the countries export footwear and leather goods to the same destinations like the EU, US and Japan. The Indian government has announced a special package worth of 404.7 million USD (about TK 3338 crore) from fiscal year 2017-18 to fiscal year 2019-20 for employment generation in leather and footwear sector.

At this, Bangladesh will face a very tough situation in the international market once the Indian government starts implementing the package. The Japanese government's adoption of the "China plus one" strategy in 2008 had opened doors for Bangladesh's leather and leather goods exporters. But there is intense competition among exporting countries such as Vietnam, India and Ethiopia to grab an increasing share of the pie.
Besides, Bangladeshi footwear and leather goods export have been facing trouble over the last two years due to the delay of relocating the tanneries from  Hazaribagh to the newly built leather estate in Savar and partial operation of the central effluent treatment plant at the estate.

The export of leather and leather goods declined 4.61 per cent in the first seven months of this fiscal year, what is 9.79 per cent less than the periodic target according to data from EPB. The sector's export target for this fiscal year is 1.38 billion USD, up from the fiscal year 2016-17's receipts of 1.23 billion USD.

 Since all the tanneries are yet to become fully operational at the estate, there is a crisis of finished leather as well. As of now, 105 out of the 155 tanneries have started operation in the estate and the factories are not operating in full swing. The footwear and leather goods manufacturers and exporters have been struggling with compliance as well because of the partial operation of the central effluent treatment plant at the estate. In the absence of full functionality, we might miss the export target of 5 billion USD by 2021. More than 3000 small and medium scale footwear, leather and leather goods factories will be in trouble for the Indian package if they successfully implement their policy.

Both Bangladesh and India are giving efforts on expanding markets in North-Eastern states of India. India has erected tariff and non-tariff wall against our cement, motor bike, soap, electronic commodities, fresh fish and ceramic commodities. Again, India desires to use our six land ports. How much and to what extent India expects concession from our side keeping her stance on tariff and nontariff barriers with no change and what we will do is a matter of deliberation from our side. So, we propose a greater cooperation in trade with India that it must come forward to withdraw such nontariff barriers.

The writer is a freelance contributor




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