Bangladesh Cabinet approves revised trade agreement with India

A Cabinet meeting chaired by Prime Minister Sheikh Hasina late yesterday approved the revised deal, which Commerce Minister Tofail Ahmed described as "a milestone" in Bangladesh-India relations.

DHAKA: Bangladesh Cabinet has approved a revised trade deal with India under which the two nations would be able to use each other’s land and water routes for sending goods to a third country, removing a long standing barrier in regional trade.

“This is a huge achievement for Bangladesh…under the agreement we (Bangladesh) will now be able to use Indian, roads, railways and waterways in transshipment of goods to Bhutan and Nepal,” Cabinet Secretary M Musharraf Hossain Bhuiyan told reporters today about the overnight development.

He said under the deal India would also be able to send goods to Myanmar through Bangladesh. It incorporated a provision that the deal would be renewed automatically after five years if either of the countries did not have any objection.

A Cabinet meeting chaired by Prime Minister Sheikh Hasina late yesterday approved the revised deal, which Commerce Minister Tofail Ahmed described as “a milestone” in Bangladesh-India relations.

He said the revised deal would be signed either during Prime Minister Hasina’s trip to New Delhi or her Indian counterpart Narendra Modi’s visit to Dhaka.

Officials familiar with the process said Kathmandu and Thimphu already had identical agreement with India but Bangladesh’s trade with Nepal and Bhutan were being hindered for want of such a treaty with New Delhi.

Under the revised deal, trucks from Nepal and Bhutan would enter Bangladesh through the Indian corridors while previously they were required to park at a specific point along the Indian border where goods from Bangladesh were uploaded.

India and Bangladesh had their original trade agreement signed in 1972 soon after emergence of Independent Bangladesh, but under that deal, which expired on March 31, trade could only be done between the two neighbours.

Officials said the proposed deal would be in force for five years instead of the existing tenure of three years and the fees and charges would be fixed through discussions between the two countries.

“Bangladesh and India would pay the same fees for transporting goods. It’s a win-win situation for both sides,” the Cabinet Secretary said.
National Board of Revenue (NBR) officials, meanwhile, told reporters that the revenue authorities, Shipping Ministry, and roads and highways departments of both the countries would sit soon to fix the transit fees.

India exports goods worth over $5 billion a year to Bangladesh through formal channels while it is believed that products worth around another $5 billion enter Bangladesh informally, they said.

“The new deal will now earn a huge amount of revenue from India by allowing it access to Bangladesh territory,” an NBR official told a newspaper.

In a related development, visiting Indian External Affairs Secretary for Multilateral and Economic Relations Sujata Mehta said that Prime Minister Narendra Modi would visit Bangladesh “soon” and the tour is expected to yield “some good results”.

Prime Minister Hasina’s press secretary Shamim Chowdhury told the national news agency BSS that Mehta made the remarks during a courtesy call on the Premier late yesterday when he also conveyed Modi’s greetings to his Bangladesh counterpart.

Referring to proposed second line of Indian credit (LoC) of USD 1 billion Mehta said: “We could take more development projects under the (new) LoC.”

According to Chowdhury, Mehta said Bangladesh could invest or buy electricity directly from the hydro power plants set up in the northeastern India and a “solar alliance” could be formed between the two countries.

“The Indian external affairs secretary noted that three to four more Indian companies are interested to invest in power and energy sectors in Bangladesh,” he said.

Source: Economic Times