Move to retaliate after Bengal’s curbs on imports from Bangladesh to stop spread of Covid.
Amid a furore over tighter scrutiny of Chinese goods by Indian Customs, Bangladesh has started retaliating against Indian supplies through the Petrapole border in WestBengal since Wednesday. The move is purportedly in response to a decision by the West Bengal authorities to retain restrictions on imports from Bangladesh via Petrapole to contain the Covid-19 spread, while Dhaka had been allowing Indian supplies through the same border since June 7.
Sushil Patwari, chairman of the eastern chapter of the exporters’ body FIEO, told FE that about 1,000 Indian trucks bound for Bangladesh were stuck at the West Bengal border, as Dhaka officials wanted the state to allow entry of their country’s goods into India. While Indian goods were finally allowed to move into Bangladesh by Wednesday evening, their officials again stopped the supplies on Thursday, Patwar isaid. In a letter to CM Mamata Banerjee on Wednesday, Patwari sought her “urgent intervention” to help resume trade.
He also pointed out that more than 500 Bangladeshi trucks were waiting at Benapole (Bangaldeshi side of the Petrapole border) with goods to get into West Bengal.
“As you are well aware… exports have resumed at the Petrapole-Benapole and the Ghojadanga-Bhomra land borders, with Indian cargos being exported to Bangaldesh following the due procedures and norms. However, import of goods from Bangaldesh to India has not resumed till date from these two border ports, due to which,the EXIM community is facing serious difficulties,” Patwari wrote in the letter.
While both the sides haven’t yet linked the Bangladeshi move to any external factor, some analysts have drawn attention to Beijing’s recent move to woo Dhaka through greater trade concessions. Beijing recently widened the scope of an existing trade agreement with Dhaka to allow about 97% of Bangladeshi goods at concessional duties. Bangladesh’s foreign ministry said on June 19 that while the country already received tariff-exemption for 3,095 items under the Asia Pacific Trade Agreement (APTA), thanks to the latest announcement,a total of 8,256 goods would be exempted from the Chinese tariffs.
Indian manufacturers, including MSMEs,are running short of certain essential supplies and raw materials, which, in turn, is adversely affecting their sales and trade commitments, according to Patwari.“We have been given to understand that,the state government authorities will issue an SoP(standard operating procedure) for the resumption of imports at these two borders.It may kindly be noted that, imports have alreadystarted at the Hili, Mahadipur land borders. Hence, it is most earnestly requested that a similar procedure/mechanism be implemented elsewhere,” he said in the letter.
India’s exports to Bangladesh declined by 9.4% y-o-y in April-February of the last fiscal to $7.5 billion,far worse than a 1% drop in India’s overall merchandise shipments abroad. Cotton is the largest export item, accounting for a fifth of India’s supplies to Bangladesh, followed by mineral fuels, automobiles and capital goods.
India’s imports from Bangladesh jumped 22% to $1.2 billion.Garment and textile products make up for around 40% of the imports, while some raw materials are also bought from the neighbour.