India and Bangladesh are two neighboring countries that share a long history of trade and commerce. The bilateral trade between the two nations has been growing steadily over the years, and there is potential for even greater economic cooperation through a free trade agreement (FTA).
According to the World Bank, Bangladesh is India`s second-largest trading partner in South Asia, and India is Bangladesh`s largest trading partner globally. Trade between the two countries has grown from $2.9 billion in 2006-07 to $10.23 billion in 2019-20.
The major exports from India to Bangladesh include petroleum products, cotton, machinery and machine parts, vehicles, and chemicals, while Bangladesh mainly exports textile and apparel products, leather, and jute to India.
Despite the significant growth in bilateral trade, there is still considerable potential for further expansion. A free trade agreement between the two countries could help remove various trade barriers and create new opportunities in sectors such as agriculture, services, and investments.
The proposed FTA between India and Bangladesh could provide various benefits, including an increase in trade volume, reduction of tariffs, improved market access, better economic cooperation, and the promotion of the ease of doing business.
India and Bangladesh have already taken steps towards an FTA by setting up a Joint Working Group (JWG) on Trade and Commerce. The JWG has identified several sectors for collaboration, including services, textiles, agriculture, and pharmaceuticals.
A free trade agreement with Bangladesh is also crucial for India`s «Act East Policy,» which seeks to boost economic ties with Southeast Asia and strengthen India`s position as a regional economic hub.
However, there are still some challenges to be addressed before an FTA can be implemented. These include issues related to non-tariff barriers, customs procedures, and regulatory barriers.
Moreover, the COVID-19 pandemic has also severely impacted trade between India and Bangladesh, with disruptions in cross-border movements affecting supply chains and trade flows. To overcome these challenges, both countries need to work together to find solutions that promote trade and commerce.
In conclusion, the bilateral trade between India and Bangladesh is growing rapidly, and there is untapped potential for further expansion through a free trade agreement. With cooperation and collaboration, both countries can overcome challenges and create new opportunities in various sectors, leading to greater economic growth and prosperity for both nations.