07 September 2022, Mumbai:
The current visit of the Bangladesh PM to the Indian side is part of the enduring high-level political engagement between the two neighbour ally nations. Both sides have shown keenness to start negotiations on a bilateral Comprehensive Economic Partnership Agreement (CEPA) later part of the year underpinning new identified sectors to consolidate & deepen their bilateral relations to expand bilateral trade and investment.
Here it is very topical to mention that CEPA will be among the trade agreements Bangladesh is prioritizing with its major trade partners, as it will lose duty benefits once the country graduates to developing nation status in 2026. To place it on records India and Bangladesh this Tuesday signed seven meaningful agreements spread across sectors, including water resources, railways, space technology, judiciary, scientific and technological cooperation, and TV broadcasting. It was a part of
Sheikh Hasina is here on a four-day state visit. Importantly sources indicate more youth exchange programmes are on the anvil. Furthermore, next month India will receive a 100-member youth delegation from Bangladesh.
One of the key takeaways from this bonhomie is that leaders of both countries have agreed to deepen further develop partnerships in sectors like the upgradation of railway projects in that country. India is in good earnest pushing for greater cooperation with Dhaka in various sectors.
Piyush Goyal, Textile Minister, stated," There is a certain inevitability that two countries for mutual gainful situation need to build resilient supply chains and explore investment growth opportunities in areas like textiles, jute products, and leather and footwear".
Perspective
Industry data reflects conspicuously that Bangladesh is India’s sixth largest trade partner with bilateral trade rising from $2.4 billion (two points four) in 2009 to $10.8 billion in 2020-21. India is the world's fifth biggest T&A/T&C exporter with a shy of 5% share of the $840 billion global market, while China has more than a third of the global market share.
Also, it is to be noted that now is the time for taking a share of the existing pie rather than anything else given global trade is shrinking & current macroeconomic variables.
Putting it in immediate context India's exports were neck to neck with nearest rival Bangladesh roughly a decade ago but over the years latter has leapfrogged- particularly on apparel/garments - amongst many of the reasons due to higher labour costs, disadvantages of lack of FTAs/LDC/MFN status etc that make Indian apparel/clothes 20% or thereabout pricier.
Two-way street
Given the common shared values, the two nations have India presents a big market opportunity for Bangladeshi apparel suppliers if the central government pursues the given policy intervention of the current dispensation. The FBCCI president said earlier that," India could be a major supplier of yarn and cotton to the garment industry in the near future and called for developing infrastructure in the Indian part of the border land ports to boost trade, according to Bangla media reports".
The paper tries to present the data analysed by Team AR from various sources to pack a punch that, India exported US $ 1.72 billion worth of cotton yarn to Bangladesh in the calendar year 2021 from that of US $ 657 million in 2020 and the US $ 539 million in 2019.
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