TO CHECK rising trade deficit of neighboring Bangladesh, India today said it will increase the duty-free quota for exporting textiles by 25 per cent while removing duty on jute imports.
This, India said, is going to help Bangladesh in bridging the ballooning trade deficit to some extent.
“In our view, our engagement with Bangladesh and the growing economic partnership, will bring in rewards for both countries, ushering in generation of jobs and overall prosperity and inclusive growth… We have removed the countervailing duty on jute and increased quota on readymade garments import from Bangladesh to 10 million from eight million,” minister of commerce and industry Anand Sharma said after meeting Bangladesh commerce minister Muhammad Faruk Khan here.
The minister said that this will help Bangladesh increase its textile export to India.
Sharma said, “In addition to the investments in diverse sectors which have already come, $3.5 billion of investment is in the pipeline. We had discussed earlier about the Indian investment and value addition here through partnerships and joint ventures. It will help in enhancing trade and exports from Bangladesh to India. That will ensure both generation of employment and as well as enhancement of trade and exports out of Bangladesh to India,” Sharma added.
The investment is being made through private sector companies in sectors like telecom, pharma, chemical, food processing and labour intensive sector. Airtel has already committed $500 million over and above $350 million already invested in Bangladesh. At present, companies like Tata Nitol, Arvind textiles, Marico, Sun Pharma, and Asian Paints are working in Bangladesh to spread their reach.
However, Bangladesh commerce minister said, “25 per cent increase in textiles is peanuts. We are the second largest exporter of textiles in the world. I would be pitching for 61 duty free items. I am looking forward to it”.
Talking about the development of border infrastructure, Sharma said a lot of progress has been made on the front and the government is already working on a project of integrated check-post (ICP) system whereby the goods being imported in the country will be cleared at just one point — ICP. The project worth Rs 142 crore will be completed by November 2012. ICP of Petropol and Agartala will be ready by next year. A joint working group will meet regularly to fine tune all issue relating to the development of the border infrastructure.
Border haats, allowing makeshift bazaars at the common border, will also be inaugurated by June, Sharma said. At the bazaar haats, both Bangladeshi and Indian currencies will be used for trading in farm and homemade items, handicrafts, horticulture, fresh and dry fish, wooden and cane furniture, utensils, farming tools and home-made clothing such as lungi, and gamcha.
Bilateral trade between the two countries stands at $3.5 billion. There has been a six-fold increase in Bangladesh export.
As regard supplying wheat and rice, Sharma said, “We have responded positively to Bangladesh’s request of 300,000 tonnes of par boiled rice and 200,000 tonnes of wheat. We are ready and the shipments can commence if Bangladesh wants, as they decide which port to take it from, as early as next week.”
Another significant issue discussed during the meeting was upgradation of Bangladesh quality standard on a par with Bureau of Indian Standard. For this, a technical team from Bangladesh will visit India to finalise the modalities.
India has asked for a list of required items on which Bangladesh wants accreditation.
First published in The Sunday Express, India, April 24, 2011