Bangla presses for free-trade deal.

New Delhi, June 9: Bangladesh wants to hasten a free trade agreement with India to narrow the huge trade gap it suffers with its bigger neighbour.

“A free trade pact is one of the answers to our most pressing concerns — the huge trade imbalance between India and Bangladesh,” said Bangladesh high commissioner Tariq Ahmad Karim in an interview with The Telegraph.

“But it has to be a meaningful FTA, sans devils in the fine print such as non-tariff barriers to trade,” he said.

India sells $3.37-billion worth of goods annually to Bangladesh and imports a mere $358 million.

Bangladesh has often complained that duty sops offered by India do not help as non-tariff barriers or delays in notifying rule changes hold up Bangladesh exports.

“We know the trade gap cannot be bridged. But through an FTA we may discover a huge new market, which can negate the need for our exporters to travel across oceans to sell,” the Bangladesh envoy said.

Bangladesh, which grew 6.2 per cent last year, exports $15.91 billion worth of goods, mostly to the US, European Union and Japanese markets from where its merchandise benefits from a generalised system of preferences.

However, the recent economic downturn in the US and the European markets has forced it to look at other markets.

“We have walked the extra mile in addressing India’s concerns,” said Karim. Bangladesh security agencies are believed to have helped to “guide” Indian militants hiding in its territory into the hands of Indian security forces at border crossings, though both sides have chosen not to speak of this.

“Now Bangladesh is looking for something solid ... otherwise there could be a backlash,” the high commissioner warned, alluding to domestic political parties which have been campaigning against pacts signed by Prime Minister Sheikh Hasina offering India use of Mongla and Chittagong ports.

Indian officials said they were working on a blueprint for an FTA which could be signed as early as next year, freeing imports of products in which Bangladesh enjoys a cost advantage, such as ready-to-wear garments, ceramics, tea, marine and farm products, besides leather goods.

Finance ministry officials said, “There are directions from both Prime Minister Manmohan Singh and finance minister Pranab Mukherjee to be liberal in our trade offer and to be sensitive to concerns on non-tariff barriers.”

Bangladesh has complained that India’s offer to import duty free 8 million pieces of garments annually, made in 2006, could not be taken up for years because of various non-tariff barriers.

Studies by various global agencies showed that Bangladesh would gain in a manner similar to the way Sri Lanka did when it signed a free trade pact with India.

Karim said Indian investments had started picking up in his country and pointed to the Bharti group buying out Bangladeshi telecom operator Warid.

Referring to Tata Group which withdrew its Rs 10,000 crore investment offer, he said, “The Tatas are most welcome, if they move away from the idea of buying cheap gas from us for their projects. We do not have gas to spare.”

The high commissioner added that Bangladesh wanted to invest in India. “We have sought a 25 per cent investment in the Tripura gas fired power project.”

Source : telegraphindia.com