India-Bangladesh Trade

Relations

By:-
Manoj Kumar Singh
9910845011
mkumarsingh@hotmail.com
Fortune Institute of International Business,
New Delhi
 Introduction

Both India and Bangladesh are two major

countries of the SAARC.

High-level exchanges, visits and meetings take

place regularly alongside the wide-ranging
people-to-people interaction.

India’s land border with Bangladesh – nearly

4096 km – is the longest that India has with any
of its neighbours.
Historical Background
“Treaty of Friendship, Cooperation, and
Peace” on 19th March 1972 in Dhaka for 25
Years.
First one year trade agreement on 28th
March 1972.
In October 1972, the first trade agreement
was further extended up to 27th September
1973.
On 5th July 1973, the first trade agreement
was replaced by another trade agreement
for three years. This agreement became
Cont…………….
On 12th January 1976, both countries signed
a trade protocol for higher volume of trade.
This was further extended for another three
years till 27th September 1979 on 5th
October 1976.
On 4th October 1980, third trade agreement
was signed.
On 8th November 1983, Protocol on trade of
1980 was renewed for further three years.
In May 1986, the agreement was further
extended till October 1989. Subsequently
this agreement was renewed a number of
 Export to Bangladesh Values in Rs. Lacs

Year Export to Total Export % Share

Bangladesh
2004 – 2005 732887.78 37533953.56 1.9526

2005 – 2006 736872.20 45641786.98 1.6145

2006 – 2007 736596.95 57177926.53 1.2883

2007 – 2008 1174321.29 65586352.04 1.7905

2008 – 2009 893747.31 58656738.94 1.5237

(Till Dec. 2009)
Source : Ministry of Commerce, GOI

The major items exported were cereals, dairy products, oils meals, cotton
yarn, fabrics, made ups, primary and semi finished iron and steel, pulses
transport equipments drugs pharmaceuticals, etc.
Import from Bangladesh Values in Rs. Lacs

Year Import from Total Import % Share

Bangladesh
2004 – 2005 26676.51 50106455.82 0.0532

2005 – 2006 56240.09 66040889.34 0.0852

2006 – 2007 103390.56 84050633.03 0.1230

2007 – 2008 103468.16 101231170.10 0.1022

2008 – 2009 117402.43 105273688.63 0.1115

(Till Dec. 2009)
Source : Ministry of Commerce, GOI

The major items imported were fertilizers, iron products,

vehicles and spare parts, mineral products, textile fibres, etc.
IEAM on visit to
Bangladesh
On 9th Feb 2009, the former Indian External
Affairs Minister Pranab Mukherjee was on a
daylong visit to Bangladesh.

Both countries inked two deals to further

strengthen economic ties.

Once the agreement comes into being,

both countries will be allowed to transport
their goods using their water, rail and road
routes for transportation of goods.
Tariff Concessions By India
Substantial duty concessions have been
extended to Bangladesh.
At 14th SAARC Summit held in New Delhi in
April 2007, Indian PM Manmohan Singh
announced zero duty market access wef 1st
January 2008 for products originating from
SAARC LDCs.
India agreed to extend duty-free access to
eight million pieces of readymade
garments from Bangladesh every year
under SAFTA.
 ICC Offers SEZ to
Bangladesh
On 6th April 2009 in Dhaka, a delegation of
Indian Chamber of Commerce from India
offered to set up a SEZ to attract investments
from India.

It also assured an investment worth $5 billion.

The ICC also suggested opening of a Depty High

Commision office at Guwahati or Shillong.
Mutual Investments
A large number of Indian firms from both
public and private sector have been
working on different turn key projects in
Bangladesh.

Bilateral Investment Protection and

Promotion Agreement (BIPPA) has been
signed on 9th Feb. 2009.

A total 181 FDI and joint venture

investment proposals from India worth over
us $435 million have been registered with
the Board of Investment, Govt. of
Cooperation
Economic – India, as always, has stood by
Bangladesh in its hour of need with aid of
Taka 250 crore to help it with natural
disasters and floods.
Technical – Bangladesh is an important
ITEC partner country, and a number of
participants from Bangladesh have availed
of training courses under the ITEC program.
Energy – India is ready to pen a deal with
Bangladesh to sell up to 1,000 MW of
electricity.
 Problems
High trade deficit of Bangladesh with India.

Illegal trade between both countries.

Infrastructure Deficiencies.
Conclusion

India and Bangladesh could still greatly

benefit from cooperation in other areas,
without necessarily implementing an FTA.
Improvements in the transport, storage and
administrative infrastructure at land
borders would yield substantial benefits.
Greater harmonization and cooperation in
customs administration and banking
relationships would also be highly
beneficial.