Express (September 09, 2011)
Bangladesh's trade relations with India are now poised to witness a remarkable stride following the announcement by Indian Prime Minister Dr. Manmohan Singh in Dhaka last Tuesday about providing duty-free access to 46 garment products from its neighbour, according to economic analysts.
"It is, no doubt, a step forward at the moment in terms of trade with India," ABM Azizul Islam, former finance adviser to the past interim government told the FE.
If the 46 Bangladesh garments products enjoy quota-free access, then it is a really prospective step forward, but the announcement of Dr. Manmohan did not amply clarify this point, the former finance adviser said.
Mr. Zahid Bakth, research director of Bangladesh Institute of Development Studies (BIDS) said: "The announcement for duty-free access for 46 products is a positive development."
He said it is an achievement for Bangladesh's apparel sector, despite the fact that India has its own expanding garments sector and also a strong anti-Bangladesh lobby.
Mr. Zahidi Sattar, a leading economist of the country also said the Indian gesture would help Bangladesh to help boost its readymade garments (RMG) exports to India.
"India's garment market is worth $30 billion and Bangladesh can have a big share of it," Mr. Sattar told the FE.
"The access for 46 products to India for which our exporters had to struggle for years, will definitely boost our garment sector," Prof. Abul Barakat, chairman of Economics Department of the Dhaka University told the FE.
India has a large and expanding middle class and Bangladesh has world-class garment producers, so garment exports to India will get a new dimension.
But still there may some non-tariff barriers, which should be addressed in course of time, through a mechanism to be evolved through inter-actions between the two sides.
"We should be more diplomatic and intelligent to carry forward the facilities that we have achieved following years of efforts and persuasion," Barakat said.
Mr Bakth, however, expressed the hope that there would be no, or, less barriers at the state-level in federal India as was assured last Wednesday by the chief ministers accompanying the Indian PM Manmohan Singh.
Former finance adviser Azizul Islam endorsed the expectations of the BGMEA that India could be the third largest buyers of Bangladesh RMG products after the Europe Union and the USA.
"For this to happen, the members of the BGMEA must increase their capability to meet the demand in the enlarging market when India imports more apparel items from Bangladesh", he added.
Without increasing capacity, enlargement of the export market will not be possible, he observed.
"Otherwise, to feed a new market we may lose the established markets like Europe and the USA. So with the opening of a new horizon, we must increase our production capability", he stated.
"To increase supply to India, we must not reduce supply to our established markets."
"India should not be substitute for our established markets like Europe and the USA," Azizul Islam added.
For this, Bangladesh, he noted should also improve its infrastructural facilities including utility services like those of power, water and other logistic supports for the garments sector.
Bangladesh must increase power generation and make efforts to augment energy supplies from sources like gas, coal etc, he added.
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