Scope for better trade ties with Bangladesh

Our Banking Bureau

Mumbai, May 16: A study by the Export-Import Bank of India (Exim Bank) has said that there is potential to enhance trade and investment ties between India and Bangladesh.

“The Bangladesh economy is primarily agrarian. With the adoption of effective Exim policies, it has been able to reduce its trade deficit. The principal export items are ready-made garments including knitwear, fish and shrimp, jute goods, fertlisers and chemicals. Important capital goods include textiles, food grains, edible oil and synthetic yarn,” noted Exim Bank.

India is the single largest trading partner for Bangladesh’s imports with a share of about 17.4 per cent. Trade between India and Bangladesh has grown substantially during the nineties. India’s exports to Bangladesh have risen to $644 million in 1999-2000 from $275 million in 1989-90 while imports increased to $81 million from $12 million during the same period. The balance of trade is in India’s favour.

Cotton yarn, fabrics and madeups dominate India’s export to Bangladesh—accounting for 24.8 per cent of the total exports in 1999-2000.

To enhance bilateral trade between the two countries, the study identifies certain sectors which Indian exporters can target in the Bangladesh market.

These include, among others, capital goods, iron and steel, software, cotton yarn, gems and jewellery. Similarly, exporters from Bangladesh can target Indian markets with their high quality ceramic ware and melamine ware, and traditional products like raw jute, hilsa fish, and jamdani sarees.