50720188 bilateral trade between bangladesh and india

8/6/2019 50720188 Bilateral Trade Between Bangladesh and India

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Bilateral Trade between Bangladesh and India 2011

Acronyms and Abbreviations

BEI Bangladesh Enterprise InstituteBIDS Bangladesh Institute of Development StudiesCD Customs Duty

EPB Export Promotion BureauEU European UnionFDI Foreign Direct InvestmentFOB Free on BoardFTA Free trade AgreementGDP Gross Domestic ProductHS Harmonized CodeLDC Least Developed CountryMNF Most Favored NationNBR National Board of Revenue NTB Non Tariff BarrierRD Regulatory Duty

RMG Ready Made GarmentsROO Rule of OriginSAARC South Asian Association for Regional CooperationSAFTA South Asia Free Trade AgreementSAPTA SAARC Preferential Trading AgreementSD Supplementary DutyTRQ Tariff Rate QuotaVAT Value Added TaxWB World BankWTO World Trade Organization

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Acknowledgement

would like to thank specially our honorable teacher Jannatul Ferdous, lecturer ofSchool of Business Studies, Southeast University, for providing us with different

information and advices to prepare our report about the trade patterns, dynamicsand volume of Bangladesh with its neighboring country India. Since she taught us the pros andcons of international trade and globalization, different underlying theories of international trade,different case studies, we were able to prepare our report with the help of those studies.We

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Abstract

hat this paper is all about is the trading relationship, patterns, dynamics and tradevolume of Bangladesh with India. In this paper firstly we would like to show thepatterns of trade between these two developing countries that means to show what kind

of theoretical model is best suited for this bilateral trade between Bangladesh and India.Secondly the paper will describe about to what extent Bangladesh trades with India or the tradevolume of Bangladesh with India. Thirdly it will show different trading aspects like tradebarriers, informal trade between the two countries, negotiations and trade policies between thesetwo countries. Lastly this paper will come up with some sort of recommendations to balance orimprove the imbalanced trade between Bangladesh and India like how to improve the trading

relationship between two countries, how to remove the trade barriers etc.

W

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1. IntroductionSince Bangladesh and India are twoneighboring countries and having situated inthe same region geographically, there exists

a good tie between these two countries. Ifwe look at the history of the two countries,then we will find a lot of similarities between Bangladesh and India fromdifferent aspects like cultural, political,social and economic. In addition,Bangladesh and India are two majorcountries of the SAARC. By now as far astrade relation is concerned, India is one oflargest trading partners of Bangladesh.Indias position is at the top (2nd) forBangladeshs imports from the world.

Therefore, an analysis of current trade status between the two nations, obstacles andopportunities for mutual trade expansion isvery critical for economic development of

both countries, especially of Bangladesh, asBangladesh has been suffering fromhistorical trade deficit with India since itsindependence. The trade deficit has been

increasing exponentially since the recentpast. From the perspective of this argumenthere in this report we will try to show thetrends or patterns of the bilateral tradebetween Bangladesh and India. With somedata of the recent trade between these twocountries we will show the compositionalchanging dynamics of the bilateral trade between Bangladesh and India. Later wewill try to discuss the volume of the bilateraltrade between the two countries as well asreview some strategic ways to balance the

historical trade deficit that Bangladesh hasbeen suffering.

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1.1Objectives of the studyThe main objective of this paper is to find out the patterns of trade, dynamics and volume oftrade of Bangladesh with India and to review the underlying theoretical context towards thepatterns of trade of Bangladesh with India. Another objective of this report is to find out theimbalances of trade between these two countries and discuss some recommendations to resolve

these imbalances.

1.2 Scope of the studyWe all know that there are lots of reports, studies, researches, discussions, debates etc. on thebilateral trade between Bangladesh and India. Therefore, in that comparison our report is verymuch short and limited. But after all my report will focus some sort of trading relationship likepatterns, dynamics volume between these two countries that might help one to understand thebasic things of the bilateral trade between Bangladesh and India.

1.3Methodology of the studyBasically we used secondary data like different literatures, reports, books, documents, eBooks,on the bilateral trade between Bangladesh and India to prepare our repot since we knew earlier

that there are lots of works on the bilateral trade between Bangladesh and India.

1.4Limitations of the studyAs we said before there are lots of works on the bilateral trade between Bangladesh and India,here we were not able to prepare our report in those large extents due to time constraint.Therefore under shorter time and unavailability of latest country wise data in the website wewere just trying to focus the key aspects of the bilateral trade between Bangladesh and India aswell.

1. Literature Review:

A research was conducted by Ebney Ayaj Rana, Hons 2

nd

Batch, Department ofDevelopment Studies, University of Dhaka in the early 2011. By observing that researchsome idea has been found. Bangladesh has been suffering massive trade Imbalance withIndia. It is now almost a self-evident truth. One of the main factors for this massiveimbalance is Indias policy of tariff and non-tariff barriers to the Bangladeshicommodities exportable to India. Currently India is the 2nd largest trading partner ofBangladesh and Indias position is at the top for Bangladeshs imports trade.Bangladeshs trade with India increased tremendously especially in the 1990s. Theaverage annual growth rates of Bangladeshs trade with India, during 1980 to 1995, weremuch higher than those with the SAARC and the world. However, Bangladesh hasalways been trade deficit with India, and recently it has increased exponentially. Limitedexport base, backward industries, inadequate infrastructure, lower productivity in

Bangladesh, appreciation of Bangladeshs Taka against Indian Rupee, earlier and fastertrade liberalization program in Bangladesh compared to India, tariff and non-tariffbarriers (NTBs) imposed by the Indian government, huge illegal trade, diversified exportsand technologically advanced industrial base of India are identified as the main reasonsof this huge trade imbalance. Structural and policy measures such as sound physical,social and economic infrastructure, superior product quality, export diversification,sufficient institutional facilities for banking, credit and insurance, improved law andorder situation, labor unrest free environment, an honest and efficient administration,

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continuous political stability, huge domestic and foreign investments, joint ventures inBangladesh with buy back arrangements, competitive devaluation of the Bangladeshcurrency against the Indian currency, removal of illegal trade, tariff and NTBs free entryof Bangladeshs exports to Indian market are suggested to improve this trade deficit. Alsocordial and productive cooperation between these two nations is crucial to materialize

these measures.

Another research was done by a group of student (Tapash Chandra Das, Md. ArifulHaque, Afsana Rahman, Shakir Md. Bayezid Kabir, Md. Hasnain Chowdhury)Marketing department (Evening MBA) of Dhaka University in the 2008. According tothat research paper - Bangladesh suffers a huge trade imbalance with India. Apart fromthe large size of the economy, maintenance of a high protectionist trade regime by Indiain the forms of tariff and non-tariff barriers have contributed to this imbalance. WhileBangladesh has progressed much ahead of India along with its liberalization of trade,India remains slow. Both Bangladesh and India are two major countries of the SAARC

and have a long common historical past and similar cultural and social evolution. As faras trade relation is concerned, India is the 2nd largest trading partner of Bangladesh justafter USA in 2003. Indias position is at the top for Bangladeshs imports from the world(IMF: Direction of Trade Statistics, June 2004). Therefore, an analysis of current tradestatus between the two nations, obstacles and opportunities for mutual trade expansion isvery critical for economic development of both countries, especially of Bangladesh, asBangladesh has been suffering from historical trade deficit with India since itsindependence. The trade deficit has been increasing exponentially since the recent past.Official data show that compared to 1983, trade deficit in 2003 is more than 46 timeshigher1 (IMF: Direction of Trade Statistics). This growing deficit is a cause of seriousconcern for Bangladesh and has important economic and political implications. Hence the

importance of the study is realized, and it is expected that the study will help policymakers to understand the roots of the problems on the way of trade expansion, and toformulate and execute the appropriate policy measures to mitigate or remove theseproblems. With this objective in mind, this paper makes an attempt to deal with the issuesof bilateral trade relationship between Bangladesh and India.

Another research was conducted by Monoj Kumar Singh, lecturer of Daffodil InternationalUniversity which published on 2008. The trading relationship between India and Bangladesh is

currently of special interest in both countries for a number of reasons. Firstly, there are urgentand longstanding concerns in Bangladesh arising from the perennial, large bilateral trade deficitwith India, and from the large volumes of informal imports from India across the land borderwhich avoid Bangladesh import duties. These concerns have been particularly acute on theBangladesh side in the context of discussions between the two governments of the possibility ofa bilateral free trade agreement along the lines of the India-Sri Lanka FTA. Secondly, eventhough (because of the disparity in the size of the two economies) Indias trading relationshipwith Bangladesh is much less significant for it than it is for Bangladesh, closer economic

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integration with Bangladesh is nevertheless seen as a very important way of reducing theeconomic and political isolation of the seven Indian eastern and north eastern states from the restof the country. Finally, both countries have long shared common objectives for closer economicintegration within the South Asia region, and these have recently been reemphasized by signingon to SAFTA, which is to come into force in January 2006. Under SAFTA, the preferential

tariffs agreed in the various rounds of SAPTA-- so far largely ineffective in generating muchintra-regional trade-- will continue, but a number of ambitious new objectives have beenenunciated. These include the eventual elimination of tariffs and non-tariff barriers on trade between the members, the harmonization of Customs procedures and documentation, thefacilitation of banking relationships, and cooperation and improvements in the infrastructure forregional trade and cross-border investments.

2. Balance of Payments

Any transaction that causes money to flow into a country is a credit to its BOP account,and any transaction that causes money to flow out is a debit.

The BOP includes the current account, which mainly measures the flows of goods andservices; the capital account, which consists of capital transfers and the acquisition anddisposal of non-produced, non-financial assets; and the financial account, which recordsinvestment flows.

The balance of payments is an accounting of a country's international transactions over a certaintime period, typically a calendar quarter or year. It shows the sum of the transactionspurelyfinancial ones, as well as those involving goods or servicesbetween individuals, businessesand government agencies in that country and those in the rest of the world. Every internationaltransaction results in a credit and a debit. Transactions that cause money to flow into a countryare credits, and transactions that cause money to leave a country are debits.

The BOP statement divides international transactions into three accounts: the current account,the capital account and the error and omission account.

1. Current Account

The current account is composed of four sub-accounts:

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Merchandise trade consists of all raw materials and manufactured goods bought, sold orgiven away. Until mid-1993, this was the figure that was used when the "balance oftrade" was reported in the media. Since then, the merchandise trade account has beencombined with a second sub-account, services, to determine the total for the balance oftrade.

Services include tourism, transportation, engineering and business services, such as law,management consulting and accounting. Fees from patents and copyrights on newtechnology, software, books and movies also are recorded in the service category.

Income receipts include income derived from ownership of assets, such as dividends onholdings of stock and interest on securities.

Unilateral transfers represent one-way transfers of assets, such as worker remittancesfrom abroad and direct foreign aid. In the case of aid or gifts, a debit is assigned to thecapital account of the donor nation.

2. Capital Account

The capital account has four sub-accounts:

Foreign direct investment (FDI) or foreign investment refers to the net inflows ofinvestment to acquire a lasting management interest in an enterprise operating in aneconomy other than that of the investor.It is the sum of equity capital, reinvestment ofearnings, other long-term capital, and short-term capital as shown in thebalance ofpayments. It usually involves participation in management,joint-venture, transfer oftechnology and expertise. There are two types of FDI: inward foreign direct investmentand outward foreign direct investment, resulting in a netFDI inflow (positive or negative)and "stock of foreign direct investment", which is the cumulative number for a givenperiod. Direct investment excludes investment through purchase of shares.

Portfolio Investment The purchase of stocks, bonds, and money market instruments byforeigners for the purpose of realizing a financial return, which does not result in foreignmanagement, ownership, or legal control.

Some examples of portfolio investment are Purchase of shares in a foreign company, Purchase ofbonds issued by a foreign government, Acquisition of assets in a foreign country. Purchase ofstocks in a foreign company.

Factors affecting international portfolio investment are tax rates on interest or dividends(investors will normally prefer countries where the tax rates are relatively low), interest rates(money tends to flow to countries with high interest rates) ,exchange rates (foreign investors maybe attracted if the local currency is expected to strengthen)

Capital transfers include debt forgiveness and migrants transfers (goods and financialassets accompanying migrants as they leave or enter the country). In addition, capitaltransfers include the transfer of title to fixed assets and the transfer of funds linked to the

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sale or acquisition of fixed assets, gift and inheritance taxes, death duties, uninsureddamage to fixed assets and legacies.

Official Reserve the current account should balance with the capital plus the financialaccounts. The sum of the balance of payments statements should be zero. For example,

when the Bangladesh buys more goods and services than it sells (a current accountdeficit), it must finance the difference by borrowing, or by selling more capital assetsthan it buys (a capital account surplus). A country with a persistent current accountdeficit is, therefore, effectively exchanging capital assets for goods and services. Largetrade deficits mean that the country is borrowing from abroad. In the balance ofpayments, this appears as an inflow of foreign capital. In reality, the accounts do notexactly offset each other, because of statistical discrepancies, accounting conventions andexchange rate movements that change the recorded value of transactions.

3. Error and Omission account:

Balance of Payment must be balanced. We know that debits and credits under balance of

payment should agree. But the accounts of two countries never matched. The reasons behind thegap are as follows

a) Due to spoiled goods / damage of goods

b) Due to smuggling

c) Information of payments for imports not passing through banking channel is obtained fromother channel.

d) Time lag- The time of recording of each country may vary

These differences would arise and its shown separately as error and omission account.Transactions that escape official channel are recorded under this head to balance the balance ofpayment.

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4. Scenario of BOP between BD and India

4.1. Historical Development of India-Bangladesh Trade Relations

Bangladesh and India signed the Treaty of Friendship, Cooperation and Peace onMarch 19, 1972 in Dhaka for 25 years. Owing to this treaty, both countries signed thefirst one-year trade agreement on March 28, 1972.In the agreement, fish, raw jute,newsprint and naphtha were identified as the principle exports of Bangladesh to India.Indias major export items to Bangladesh, on the other hand, were cement, coal,machinery and unmanufactured tobacco. The trade between the nations was limited togovernment level. This agreement also provided border trade between Bangladesh andNeighboring Indian states; and within 16 kilometers of both countries border, free tradewas allowed for certain commodities.

The expected level of trade was not achieved under the first trade agreement. Also freeborder trade between Bangladesh and India led to some illegal trade and hence wasabolished in October 1972 by mutual consent of the both governments. However, toattain the desired level of trade, the first trade agreement was further extended up toSeptember 27, 1973.

The first trade agreement of 1972 was replaced by another trade agreement for threeyears. This agreement was signed on 5 July 1973 and became effective from 28September 1973. Raw jute, fish, newsprint, etc were identified as major exportable itemsof Bangladesh to India. On the other hand, major exports of India to Bangladesh wereunmanufactured tobacco, cement, coal, raw cotton, cotton yarn, cotton textiles and books.This agreement provided for a system of Balanced Trade and payment Arrangement(BTPA) and most favored nations treatment to each other. The desired level of tradebetween the two nations was not achieved by the agreement of 1973, and trade imbalanceincreased in the very first year. Rupee trade was found to be a barrier in the bilateraltrade, and thus abolished rupee trade from 1 January 1975 by a Protocol signed on 17December 1974. It was decided that trade would be conducted in free convertiblecurrency.

India and Bangladesh signed another trade Protocol on 12 January 1976 for highervolume of trade and long-term arrangements for trade of coal and newsprint. BTPA 4between Bangladesh and India was extended for another three years till 27 September1979 on 5 October 1976.

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On 4 October 1980, the third trade agreement was signed between these two nationsinitially for three years. By mutual consent, this agreement was extendable for another 3years.

On 8 November 1983, Bangladesh and India renewed a Protocol on trade of 1980 for

further three years. In May 1986, the trade agreement of 1983 was extended for anotherthree years till 3 October 1989. Subsequently this agreement was renewed a number oftimes. Based on available information, this agreement was valid up to 31st March 2009.

4.2. Institutional Framework for Facilitating Trade and Economic Cooperation

The first Trade Agreement between India and Bangladesh was signed in 1972. The revised India-Bangladesh Trade Agreement signed in March 2006 governs the present trading arrangementsbetween the two countries. Other Agreements/MOUs for facilitating trade and economic linkagesinclude: (i) Protocol on Inland Water Transit and Trade (IWTT); (ii) Bilateral Air ServicesAgreement between India and Bangladesh; (iii) Bilateral Agreement on the Establishment ofJoint Economic Commission (JEC); (iv) India-Bangladesh Convention for the Avoidance of

Double Taxation; (v) India-Bangladesh Agreement for the Regulation of Motor vehicle passenger traffic; (vi) Agreement on Revised Travel Arrangements between India andBangladesh; (vii) Rules for Interchange of Traffic between India and Bangladesh; (viii) MOUbetween BIS and BSTI for cooperation in the area of standards; (ix) MOU for cooperation in thefield of agriculture; (x) MOU for cooperation in the field of science and technology; (x)Protocols for operation of passenger bus service between Dhaka & Kolkata, and Dhaka andAgartala. Discussions are also underway for concluding revised agreement on regulation ofpassenger and cargo vehicular traffic.

4.3. Trade Related Bilateral Forum

Trade related issues are discussed between the two Governments under following main bilateralmechanisms, which meet periodically: (i) Joint Working Group on Trade (JWG); (ii) Joint Groupof Customs Officials (JGC); (iii) Protocol Renewal Committee and Standing Committee toreview implementation of Protocol on Inland Water Transit and Trade; (iv) Inter- GovernmentalRailway Meeting; (v) Commerce Secretary Level Talks; (vi) Foreign Office Consultations; and(vi) Joint Economic Commission (JEC) at the Ministerial level.

4.4. Mutual Investments

Besides merchandise trade, efforts are underway to promote mutual investments and technology

collaborations. There are significant proposals from large Indian industrial groups (Tata, Essaretc.) to invest in Bangladesh. There are other Indian small and medium sized firms, who areinterested in investing in Bangladesh. A large number of Indian firms from both public andprivate sector have been working on different turn key projects in Bangladesh in sectors such as power, transmission lines, textiles, chemicals and pharmaceutical, glass and plastics,engineering. To encourage increased investment flows, discussions on bilateral investmentprotection and promotion agreement (BIPPA) have almost been completed, and the agreement isexpected to be signed shortly. In November 2007, Government of India has removed the

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prohibition on investment into India by citizens of Bangladesh or entities incorporated inBangladesh, allowing investments that have prior approval of the foreign investment policyboard of the government of India. A total 181 FDI and joint venture investment proposals fromIndia worth over us $ 435 million have been registered with the Board of Investment, Govt. ofBangladesh in sectors such as agro industry, textiles, chemicals and engineering industries. Out

of 181 projects, more than 57 are already in production stage.4.5. Trade Infrastructure and Connectivity

The movement of goods by road is through more than 20 operational land customsstations (LCSs) along the border. Government of India has taken up upgradation of sevenLCSs in two phases, and their development as integrated check-posts (ICPs). These ICPsinclude Petrapole, Hili, Changrabandha, Agartala, Dawki, Sutarkandi and Demagiri.Petrapole, which accounts for more than two-thirds of Bangladesh-India trade, will bedeveloped in the first phase. A Sub-Group under the Joint Working Group on Trade hasbeen set up in November 2007 to look into ways and means of strengthening border tradeinfrastructure in a more coordinated way.

The Protocol on Inland Water Trade and Transit (IWTT) has been operational since 1972.It permits movement of goods over barges/vessels through the river systems ofBangladesh on eight specific routes between points in West Bengal & Bangladesh;Kolkata and points in Assam (Dhubri, Karimganj) and between points in Assam. Theprotocol was renewed in 2007 for period up to March 2009.

There are four points along border for movement of goods by train. Forty-three yearsafter a similar train service was discontinued in March 1965, direct passenger trainservice between Kolkata and Dhaka commenced its operation on April 14, 2008 (Biweekly) following the signing of the Inter-Governmental Agreement in Dhaka on April10, 2008. There is direct bus service between Dhaka and Kolkata (started in 1999) and

Dhaka - Agartala (since 2003). India has requested for a direct bus service betweenAgartala and Kolkata via Dhaka.

Under the bilateral India-Bangladesh Air Services agreement, a total 61 flights per weekare permitted to operate by designated carriers from both sides. Bangladesh Biman, AirIndia, Indian, GMG Airlines, Jet Airways are operating services on Kolkata-Dhaka, andDelhi-Dhaka sectors. Airlines from both sides have plans to expand their operations onthese sectors as well as include new destinations. Besides 61 flights per week tometropolitan cities, since 2006 India

has offered an open sky policy to SAARC member states to 18 tourist destinations inIndia.

A number of proposals for improving trade infrastructure and boosting connectivity(between India and Bangladesh and North-East states of India) are at various stages ofdiscussion between the two governments. For example, India has proposed movement ofcontainers through riverine route and rail; access to Chittagong Port for use by North EastStates of India, development of Akhaura-Agartala rail link, declaration of Ashuganj asnew Port of Call under IWTT, and opening of new trade routes includingKawrapuchchiah/Demagiri (India) Thegamukh (Bangladesh) and Sabroom (India)

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Ramgarh (Bangladesh). The response from Government of Bangladesh is awaited onthese proposals.

4.6. Technical Cooperation

Bangladesh is an important ITEC partner country, and a number of participants from Bangladeshhave availed of training courses under the ITEC programme. In the last three years, more than400 participants from Bangladesh have undergone training in India under ITEC programme andTata Consultancy Services (TCS) under Colombo Plan. Under a special Train the TrainerProgramme in Information Technology sponsored by the Government of India, about 500participants from Bangladesh have visited India in the past two years for the six weeks longtraining courses conducted by TCS.

4.7. ICC Offers SEZ to Bangladesh

On 6 th April 2009 in Dhaka, the Indian Chamber of Commerce delegation from India offered toset up a Special Economic Zone to attract investments from India and assured an investmentworth $5 billion from India towards developing the proposed SEZ and has requested a suitableplot of 150 acres of land for this purpose. The ICC also suggested opening of a Deputy HighCommission office at Guwahati or Shillong. The suggestion was received positively by PrimeMinister Sheikh Hasina, who felt that opening of a Consulate or Deputy High Commission officein North-East would significantly contribute towards improving trade and tourism relationsbetween the two countriesSectors such as energy, power, steel, telecommunications, healthcare,fertiliser, oil and gas, limestone and forest-based industries such as paper, export of plantationcrops were some of the areas that could drive strong bilateral economic relationship between the

two countries, the ICC team observed.

4.8. Trade and Transaction Costs

The Petrapole crossing in India handles by far the largest share of the recorded India-Bangladeshland border trade. Petrapole is on a major road 95 kilometres from Kolkata. The neighbouringtown on the Bangladesh side of the border is Benapole, which in turn is linked by a highway toJessore and Dhaka. The infrastructure deficiencies and procedural hazards at Petrapole includeinadequate and congested roads, absence of government bonded warehouses, irregular powersupplies, inadequate sanitary facilities and drinking water, prevalence of theft and other crimes,frequent strikes, prevalence of speed money, a single border gate which handles all truck andother traffic as well as individual travelers and which is wide enough for only one truck at a timeto pass through.

Investments need to be made for improving the infrastructure and facilities atPetrapole and at the other land border Customs stations. For Bangladesh the present systeminvolves substantial terms of trade losses, since the landed costs of imports from India ofproducts such as wheat, rice, fruit, cattle feed, bauxite and other products appear to be muchhigher than they would be if the congestion were removed. Bangladesh exporters and potentialexporters also have an obvious interest in faster and less expensive commodity movements

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across the border. If the required investments are not made, congestion will increase with thegeneral growth of trade, and would largely cancel or offset economic benefits that wouldotherwise occur if tariffs or other trade barriers were to be reduced. Without very substantialinvestments in infrastructure and administrative capabilities, increases in trade would be sloweddown or blocked by increases in congestion and the associated increases in economic rents, and

an FTA would become ineffective.Hence, both countries will need to improve the infrastructure physical andadministrative-at their land border Customs posts. This would need to be done in a coordinatedway-there would no point if the infrastructure were improved on one side of the border butbottlenecks were to remain or even increase on the other side of the border.

4.9. Energy Cooperation

The last caretaker government had decided to initiate talks with India on interconnecting thenational power grid of Bangladesh with the north-eastern power grid in India based on thefeasibility study of the USAID, Asian Development Bank (ADB) and SARI Energy co-

operation. Bangladesh could bring 200 MW of electricity from Tripura or Assam, where Indiahas hydroelectric plants.India has also offered to link Bangladesh to its electricity grid and sell it power to help itovercome persistent shortages in peak demand periods. At the DCCI 50th Anniversaryconference held in November, Indian State Minister for Power, HE Jai Ram Ramesh stated thatBangladesh could buy electricity from plants in Tripura, where generation capacity exceedsdemand, and other north-eastern Indian states bordering Bangladesh. "India is ready to pen a dealwith Bangladesh to sell up to 1,000 MW of electricity."

4.10. Bangladesh-India trade: Some stylized facts and recent trends

In this section of the report I will try to show the present trend of the bilateral trade betweenBangladesh and India, how there occurs the trade imbalance between the two countries. Here Iam starting with some recent statistics of trade between Bangladesh and India.

Over the recent past Bangladesh has witnessed a widening of trade deficit with India which stoodat $3.0 billion in FY2008 and $2.6 billion in FY2009. However, it is important to note the recentdynamics: Between FY2004 and FY2008

Export to India has experienced significant rise: from $89.3 million to $358.1 million inFY2008 and $276.6 million in FY2009 a threetofour fold increase within a span offive years.

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Table 1: Trade Balance of Bangladesh with India

FY

Trade balance between India and Bangladesh

Export (mln $) Import (mln $) Trade Balance

(mln $)

FY 2000 50 945 -895

FY 2001 61 1195 -1134

FY 2002 39 1146 -1107

FY 2003 53 1489 -1436

FY 2004 89.3 1598.4 -1509.1

FY 2005 143.7 2009.1 -1865.4

FY 2006 242.0 1850.9 -1609.0

FY 2007 289.4 2227.0 -1937.6

FY 2008 358.1 3384.3 -3026.2

FY 2009 276.6 2839.0 -2562.4

Source: Estimation based on CPD database compiled from EPB and BB statistics

Although from relatively low base, this growth provides an indication about potentialopportunities to expand Bangladeshs exports to India.

Now if we make the graphical representation of the trade between Bangladesh and Indiafrom the fiscal year of 1990-1991 to 2008-2009 then we will see a clear trade imbalancebetween Bangladesh and India. It demonstrates the trade deficit of Bangladesh with Indiaby showing the huge gap between import from and export to India by Bangladesh.

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Figure1: Trade between Bangladesh and India

Source: The Daily Star, February 02, 2010

Now the table 3 shown below provides us with record of trade between Bangladesh andIndia in the fiscal year of 1995, 2000, 2008 and 2009 that will provide us withcomparative statistics of export and import of the two countries in the context of theirtotal and global percentage.

4.11.Trends of performance in FY2009-2010

Bangladeshs export to India as a share of Bangladeshs global export - 1.78% (on therise) Bangladeshs import from Bangladesh s India as a share of her global import -12.62% (about the same)

Indias export to Bangladesh as a share of Indias global export - 1.54% (declining) Indias import from Bangladesh as a share of her global import - 0.09% (about the same) The bilateral trade deficit has consequently increased from $1.5 billion to $2.5 billion

between FY2004 FY2009. This bilateral trade deficit of about $3 billion would be much higher if the deficit in the

informal trade is added to the abovementioned formal trade. In mid1990s informal tradewas estimated to be about 1.2 times the formal trade. With significant reduction in MFNtariffs and formalization of some of the illegal trade (e.g. cattle), informal trade is

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reckoned to have come down (but still estimated to be equivalent to about threefourthsof formal trade).

However, one should keep in mind that in a globalised world, it is the global trade deficitwhich counts, not bilateral deficit.

Imports from India helps Bangladeshi consumers access final goods at a competitive

price, producers to keep cost of production low, and exportoriented entrepreneurs toreduce lead time and remain competitive. Many of the imports from India (e.g. fabrics and other industrial raw materials) goes into

Bangladeshs exportoriented sectors (e.g. RMG industry) and helps Bangladesh maintainhealthy trade balance with some of the other major trading partners (e.g. a $3.6 billiontrade surplus with the USA in FY2009).

For Bangladesh, in the context of trade with India, the worry should be not as much thebilateral deficit but addressing the challenge of increasing her exports to India deficit,India, which is also incidentally the best way to reduce the bilateral trade deficit as well.

4.11. Dynamics of India-Bangladesh trade: Compositional Change

If we concentrate on the dynamics of India-Bangladesh trade, then we will experience acompositional change in the bilateral trade between Bangladesh and India. If we look at recentpast statistics of the Bangladesh-India trade, then we will see that Bangladesh sin now exportingits non-traditional commodities whereas it was exporting only some traditional commodities toIndia.

Till FY2004, more than 90% of Bangladeshs exports to India were traditional items suchas chemical fertilizer, raw jute and jute manufactures, frozen fish, RMG etc.

In recent years, share of traditional commodities in total export to India has tended tocome down (68.8% in FY2009), whilst that of nontraditional items have gone up(31.2%), although in value terms both have posted a rise.

It is important that a renewed effort is undertaken to support export of the nontraditionalitems.

Table 2: Export of Traditional and NonTraditional Commodities to India

(Share in %)Commodity groups FY 2004 FY 2008 FY 2009

Traditional 90.5 60.4 68.8

Chemical fertilizer 43.6 23.1 17.2

Raw jute 23.1 11.6 10.6

Frozen fish 5.6 8.1 12.8

Jute manufactures (including sacks and Bags) 4.8 6.5 13.0

RMG 3.1 1.4 4.0

Naphtha 3.0 0.0 0.0

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Betel nuts 2.7 4.1 3.5

Leather 1.9 2.1 2.5

Soap toilet 1.5 0.5 0.6

Jute yarn and twine 1.2 3.0 4.6

Others (Non-traditional) 9.5 39.6 31.2

Total

(mln USD)

100.0

(89.3)

100.0

(358.1)

100

(276.6)

Source: Estimation based on CPD database compiled from EPB

The new Bangladeshi products in the Indian market include textile fabrics, plastic goods,

cement, furnace oil, battery, cut flower pharmaceutical flower, products, copper wire,melamine, etc. Increased export flow to India is underpinned, in part, by new items of export from

Bangladesh, indicating some export diversification. And I think this trend needs to be supported by appropriate policies.

Table 3: Export of New Commodities to India(Share in %)

Commodity group FY 2004 FY 2008 FY 2009

Traditional 90.5 60.4 68.8

Non-Traditional 9.5 39.6 31.2

Of which

New products 1.3 26.8 16.2

Furnace oil (refined) 0.2 10.0 4.7

Cement 0.0 3.8 2.3

Cut flower 0.0 3.6 0.5

Textile fabrics 0.6 2.3 1.7

Soybean oil 0.0 1.5 0.1

Copper wire 0.4 1.2 1.8

Accumulation battery and parts 0.1 1.1 0.4

Glass sheet 0.0 0.8 1.3

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Home textiles 0.0 0.8 1.3

Zinc waste 0.0 0.0 0.3

Plastic goods 0.0 0.2 0.4

Cane sugar 0.0 0.6 0.4

Pharmaceuticals 0.0 0.1 0.5

Coriander seed 0.0 0.8 0.5

Others 8.2 12.8 15.0

Total

(mln USD)

100.0

(89.3)

100.0

(358.1)

100

(276.6)


In recent years, between FY2004 to FY2009, share of top 5 traditional products inBangladeshs export to India has declined; at the same time number of exportableproducts has increased.

Among the 162 product categories (according to EPB classification) in Bangladeshsglobal export 100 categories were exported to India in FY2009 compared to 86 inFY2004.

Table 4: Diversification of Bangladeshs export in Indian market

FY

Share of product category Number of product

exported (out of 162

EPB categories)

Top 10 in FY 2008 Top 5 (FY 2004)

FY 2004 78.8 75.9 86

FY 2006 70.3 58.8 102

FY 2008 71.8 47.7 94

FY 2009 60.4 46.2 100


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Now if we consider the features of trade dynamics with the bilateral trade between Bangladeshand India, then we will see some sort of relevancies between the predictions of trade dynamicsand dynamics of Bangladesh-India trade. Here the three important predictions of trade dynamicsare:

It predicts that many small firms enter and exit the market very frequently,The growth of export sales is higher for small firms,It also predicts that the variance of growth rates of export sales is higher for firms withlower sales, when restricting attention to the sales of firms selling to a given destination.

Now if we look at these three important predictions of trade dynamics then we can easily say thatthese predictions define the trade dynamics of Bangladesh-India bilateral trade well. As per wehave already experienced that there is an increasing trend of exporting the new small firmcommodities or the non-traditional commodities to India by Bangladesh. As a result the growthof export sales is to some extent becoming higher for small firms in our country Bangladesh.Now what Bangladesh should do is to keep this trend up by the appropriate strategies or policyactions in different sectors.

4.11.The volume of trade between Bangladesh and India

As we have already known the features of the bilateral trade between Bangladesh and India, it isnow very clear to us that to what extent Bangladesh trades with India. As already shown in theupper section of the report that the patterns of trade between the two countries we are now moreexperienced about the bilateral trade between the two countries. We have already seen that thereis an ultimate trade imbalance between Bangladesh and India almost in every year becauseBangladesh usually imports huge from India where exports very little to there. Now tounderstand the volume of trade between Bangladesh and India, we can analyze the total tradebetween Bangladesh and India in recent fiscal years.

Table 5: Volume of trade between Bangladesh and India (In million US $)

FY 2004-

05

FY 2005-

06

FY 2006-

07

FY 2007-

08

FY 2008-

09

FY 2009-

10 (first

mine

moths)

Bangladeshs

exports to

India

144.2 241.9 289.42 358.08 276.58 257.41

Bangladeshs

imports from

India

2030.0 1864.70 2268.0 3364.0 2841.06 2300.22

Total trade 2174.20 2106.70 2557.4 3722.08 3117.64 2557.63

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(Source: Bangladesh Bank/EPB)

Therefore from the table 7 it is very much understandable that there is sustaining an increasingvolume of trade between these two countries. India became the 2 nd highest trading partner in theinternational trade of Bangladesh. But at the same time Bangladesh incur a huge trade deficit

approximately 10% with India. Since I have mentioned earlier about the comparative advantageof two countries that is Indian producers can produce different commodities with lower coststhan that of Bangladeshi producers, India doesnt import from Bangladesh as much asBangladesh does. As a result there sustains an ultimate trade deficit for Bangladesh to trade withIndia. To overcome this kind of situation Bangladesh should foster its export to India. We willsee the export volume of Bangladesh to India in the later part of the report. Now if we look at thetotal international trade scenario of Bangladesh in the fiscal year of 2009-2010, then we can seethe situation of trade volume of Bangladesh to India.

Figure 2: Bangladesh Export-Import against other Asian countries

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Source: The Daily Star, February 02, 2010

To balance this imbalance of trade of Bangladesh with India, Bangladesh has to foster its exportto India like United States or Canada. Bangladesh has to enter into the Indian markets and sell itsproducts. As a result Bangladesh has to produce the commodities with a lower price than that of

India. Recent records of exports to India by Bangladesh are showing a prospect to foster theexports of Bangladeshi commodities to Indian markets. If we look at the recent volume of exportto India by Bangladesh, then we can understand easily the prospective export trend ofBangladesh to India.

Table 6: Export volume of Bangladesh to India

FY Volume Thousands Taka USD @ 70.16

TK

FY 2010-11 (July to January) 249,678,597.35 18,284,460.84 260,610,901.31

FY 2009-2010 365,334,457.28 21,073,990.22 304,625,473.03

FY 2008-2009 444,887,218.76 18,966,210.97 275,671,671.04

Source: Bangladesh EPZ

Therefore it can be said that if Bangladesh wants to compete with India to balance the tradedeficit of her, then Bangladesh should capture the Indian markets. To foster the export to India

Bangladesh government should take the further measures and strategies as we are having anincreasing export to India as well.

5. Balance of Payment condition of Bangladesh

5.1. Problems Causing Indo-Bangladesh Trade Imbalance

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Although the trade deficit with a particular country is not bad if the overall trade balance issatisfactory, yet from the distribution aspect of trade policies (the distribution of benefits andcots among groups of producers and groups of consumers) the growing trade deficit with India isa great concern for Bangladesh. Bangladeshs fear is that if this deficit continues, Bangladeshwill be dependent only on a few products for its exports, and imports from India displace

domestic production to such an extent as to de-industrialize Bangladesh. As a result, it is argued,a severe polarization in Bangladesh and high levels of unemployment will occur. Therefore,increasing trade deficit with India is a problem, and attempts are made here to find out the causesof this problem.

5.2. Informal trade between Bangladesh and India

We know that formal trade is carried out between two countries by following established rulesof market behaviors and regulations. It has well-defined products and markets and isenforced by the individual governments, so that transactionsare recorded and account forthe nations Gross Domestic Product (GDP) with transparent and unrestricted marketinformation.

On the other hand informal trade is deficient of the above-mentioned traits of its formalcounterpart and its execution is clearly illegal andsecret. Interestingly enough, the burgeoning practice ofinformal trade between India and Bangladesh is divided into twocategories:

Firstly, the informal activities which involve large numbers of local people, individuallytransporting small quantities of goods iscalled bootleg smuggling

Andsecondly, trade carried out in largerquantities - mostly in truckloads - through theformal legal Customsand other channels, yet involving explicitly illegal practices such asunder-invoicing, misclassification and bribery of officials is known as technical

smuggling. Although these two varieties ofimplementing informal trade are conceptuallydistinct, there is,however, an intrinsic contiguity between them

For instance, though the illegal goods may be carried across the border in small quantities by large

numbers of people, trucking to the border areas and storage is frequently organized by medium and

large traders. The geographical distribution of Bangladeshs informal channels (accommodated

with 3-10 informal traders on an average) embraces the district centres of Jiban Nagar, Jessore,

Benapole, Kushtia, Rangpur, Khulna, Darshana, Rajshahi Godagari, Dinajpur, Lalmonirhat,

Burimari, Nawabgunj, Sonamasji, and Hilli. The items generally traded by these illicit networks

widely range from -

Foodstuff(rice, pulses, onion, and excess PDS supplies);

Textiles (Sarees and readymade garments); Consumer goods (salt,sugar);

Drugs, intoxicants, narcotics (Phensidyl, wine, cannabis, heroin);

Foreign and fake currencies;

Illegal arms, ammunition and explosives (gun,pistol, revolver, bomb);

Overabundance of other objects (stone, cement, coal, low quality medicines, low quality

machinery and motor parts);

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And even living beings (cattle, women and children) etc.

Now here I am having so suggestions to reduce informal/illegal imports. Therefore to reduceinformal/illegal trade between the two countries, both countries need to

improve infrastructure physical and administrative at land border customsposts;

streamline and harmonize customs procedures and administration at the border toreduce incentives for corruption

expand facilities at smaller customs border posts

For Bangladesh, bring down the high protective tariffs. Trade LiberalizationProgram under SAFTA will facilitate this process.

5.2.Tariff and Non-Tariff Barriers

It is generally agreed that Bangladesh has initiated the program of tariff liberalization earlier thanIndia- in the mid 1980s, and the speed of liberalization in Bangladesh is faster than that in India.Bangladesh has continued this higher speed of liberalization till recent years.

Fig 1

India 1996/97-2005/06 Example of a typical industrial tariff . MFN rate

and preferential SAPTA rate for Bangladesh

0

10

20

30

40

50

60

70

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Tariff%

MFN tariff

Preferential tariff for Bangladesh

Statistics shows that Bangladesh sharply reduced its tariff rates in all categories of imports in 1997-98 compared to 1990-91. Both un-weighted and import-weighted tariff rates have always been higherin India than in Bangladesh. Also significant quantitative restrictions on consumer goods imports inIndia were in place during this period.

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5.3. Some concessions on Tariff and non-tariff barriers of Bangladesh-India trade

We know that Bangladeshs trade strategy with India must revolve around the SAPTA tariffnegotiations. In this regard zero export duty strategy is getting importance. India should takenecessary steps of unilaterally taking the decision of providing zero-tariff access of Bangladeshsexports to India. Tariff preference should be given on those items that have high import value, areactually traded and have high potential for entering into Indian market. India may exclude thoseirrelevant items from its concession list for Bangladesh, which Bangladesh does not produce, orhardly exports.

However, mere tariff concession will not reduce trade deficit of Bangladesh to any significant extentif NTBs are not phased out simultaneously. Appropriate measures must be taken by India in thisregard. Such measures would certainly encourage local, Indian and regional investors to locateinvestment in Bangladesh targeted to the larger Indian market.

The ROO (Rule of origin) requirement should be modified in order to bring change in the localcontent requirement. To be eligible for SAPTA concessions, this local content requirement forBangladeshs commodities should be brought down to 25 per cent.5.4. Recent High Level Contacts

On 9th Feb 2009, India and Bangladesh linked two trade deals to further strengtheneconomic ties between the two South Asian neighbours. Indian External Affairs Minister

Pranab Mukherjee, who was on a daylong visit in Dhaka, signed the

Bangladesh India Trade Agreement and the Bilateral Investment

Promotion and Protection Agreement after official talks with his

Bangladesh counterpart Dipu Moni. Commerce Minister Faruk Khan and IndustriesMinister Dilip Barua signed the two deals on Bangladesh's behalf. The deals would help

the two neighbours bridge the existing huge trade imbalance in favor of

India and encourage fresh investment in both countries. Once the

agreement comes into being, India and Bangladesh will beallowed to transport their goods using their water, rail and road routes for transportation

of goods. India has been enjoying limited transit facilities only on water

routes through Bangladesh. The agreement on mutualinvestment promotion and protection will give most-favored-nation status to each other.

India has continued to constructively engage the Caretaker Government in Bangladeshthat assumed office after the imposition of emergency in the country on January 11, 2007.The External Affairs Minister (EAM), Shri Pranab Mukherjee, visited Bangladesh on

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February 19, 2007 and extended an invitation to Bangladesh to participate in the 14thSAARC Summit in New Delhi. During the visit, he held detailed discussions withPresident Dr. Iajuddin Ahmed, the Chief Adviser of the Caretaker Government, DrFakhruddin Ahmed and Foreign Affairs Advisor Dr. Iftekhar Ahmed Chowdhury. In thecontext of bilateral relations, both sides agreed to take steps to place bilateral relations on

an irreversible higher trajectory.

Prime Minister Dr. Manmohan Singh met Bangladesh Chief Adviser Dr FakhruddinAhmed on April 2, 2007 in New Delhi during the 14th SAARC Summit. During themeeting, the two leaders held discussions on all major bilateral issues.

EAM, Shri Pranab Mukherjee, again visited Bangladesh on December 1, 2007 toannounce Indias support to Bangladesh in the wake of Cyclone Sidr, as also to undertakea tour of cyclone-affected area. During his visit, EAM announced Indias decision towaive ban on export of five lakh tonnes of rice to Bangladesh and proposal to adopt tenseverely affected villages for rehabilitation.

5. Findings, Recommendation and Conclusions

Findings:Patterns of trade between Bangladesh and India: Underlying theory and the gravity model

We know that there are different theoretical backgrounds that determine the patterns of trade ininternational trade. Therefore if we consider the pattern of the bilateral trade between Bangladeshand India, there comes the question of the theoretical aspect that determines the pattern of tradebetween Bangladesh and India.

We know that India is one of the top suppliers or importing countries of Bangladesh. In the fiscalyear 2009-2010, the value of importable goods by Bangladesh from India was 2839 million

dollar on the other hand the value of the exportable goods by Bangladesh to India was only 276.6million dollar. As a result there is always a trade imbalance between Bangladesh and India. Inthe FY 2009-2010 the trade deficit in Bangladesh with India was 2562.4 million dollar.

Now if we look at the exportable and importable goods between Bangladesh and India then wewill see that Bangladesh imports from India mainly the capital machineries, textile fabrics anddying chemicals. Again India supplies to Bangladesh different essential commodities like rice,sugar, pulses and onion etc. On the other hand India import a few commodities like chemical

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fertilizer, raw jute, frozen fish, jute manufactures, betel nuts, RMGs etc from Bangladesh to avery little extent.

Now if we consider this kind of trade pattern in the context of underlying theories that determinethe pattern of trade between Bangladesh and India, then we have to consider different theoretical

aspects that determine the pattern of trade. We know that there are different theoreticalbackgrounds like comparative advantage theory, Heckseher-Ohlin model, gravity model etc. thatdetermine the pattern of trade in international trade. Now if we consider the pattern of the bilateral trade between Bangladesh and India in the light of these underlying theories ofdetermining pattern of trade, then we can analyze that what theory is to determine the pattern ofbilateral trade between Bangladesh and India.

Here if the comparative advantage theory is considered, then it seems clear that Bangladesh has avery low comparative advantage in producing commodities than that of India. On the other handIndia has huge comparative advantage in producing different commodities than that ofBangladesh. As a result Bangladesh imports a lot from India every year where export a littleamount to India. Therefore we cannot define the comparative advantage theory to determine the

bilateral trade pattern between Bangladesh and India.

Now if we take Heckseher-Ohlin model into account then we will find that Bangladesh and Indiawill export the good that uses its abundant factor intensively. But in reality, India is moreefficient to use its abundant factors of production than that of Bangladesh. Although Bangladeshhas abundant labor as a factor of production but it cannot use this factor intensively due to thelack of skill or knowledge. On the other hand India uses its abundant factors like labor, capital,land etc. intensively and skillfully that result in large scale production. Therefore the export ofIndia to Bangladesh is very high than the export of Bangladesh to India. As a result Bangladeshexperiencing a huge trade deficit or imbalance with India in every year that has already beenshown above.

Now if we concentrate on the gravity model to determine the pattern of the bilateral tradebetween Bangladesh and India, then we will find the model more relevant than that of othertheories. We know there are three important things that gravity model tells that determine thepattern and volume of trade between two countries. These three things are (a) the size of the twocountries, (b) GDPs of two countries, (c) the distance between two countries. Here it is assumedthat trade is proportional to the product of the two GDPs and inversely proportional to thedistance between the two countries. Although the size of the two countries Bangladesh and Indialargely differs, the growth rate of the two countries doesnt differ largely. If we look at the recentpast statistics of the growth rate of two countries, then we will experience that there is little gapbetween these two countries growth rate although Bangladesh is very small in size with thecomparison of India.

Table 7: GDP growth rate of Bangladesh and India

Country FY 2008 FY 2009 FY 2010 FY 2011

GDP growth rate

of Bangladesh

6.0 5.6 5.8 6.3

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(%)

GDP growth rate

of India (%)

6.4 5.7 9.7 8.4

Source: Bangladesh country report-Global Finance

So by now it is clear to us from the table 1 that although Bangladesh is a very tiny country in sizethan that of India, the GDP growth rate of the two is not very much differentiated. On the otherhand as both countries are neighboring countries the distance between Bangladesh and India isnot a matter of concern. As the geographical location of both countries is very near to each other,the transportation cost is very low between the two countries. Again since both Bangladesh andIndia are the members of SAARC, the two countries have opportunities in trading with eachother. So with the argument brought by gravity model that is trade is proportional to the productof the two GDPs and inversely proportional to the distance it can be said that since the GDPs ofboth countries are not largely differentiate and the distance between the two countries is very

low, the bilateral trade between Bangladesh and India is being strengthened over the years.

Other important coincidental aspects between two countries are historical, cultural and politicalaspects. As we know that the Indian subcontinent was under the British regime for about 200years as a result both countries share some common historical and cultural affinities as well.Again some parts of India share the language of Bangladesh. We all know that India helpedBangladesh achieve independence from Pakistan in 1971, as a result there has been built a goodrapport between Bangladesh and India. Another important issue is the transit issue that hasalready been signed by both countries. It will also add a new dimension to promote the bilateraltrade between Bangladesh and India. Since this will ease the transportation between Bangladeshand India, it will foster the trade between Bangladesh and India.

Recommendations

Given the current trade scenario with India, the obvious question is now what can be done toreduce, if not remove, the huge trade deficit of Bangladesh. There is no simple and shortcutanswer to this question. The search for effective solution must be looked at with dueconsideration of macroeconomic reality, different policy options and honest will of cooperationof both countries. It is important to note that one cannot expect dramatic reduction of tradedeficit of Bangladesh with India within a short span of time even though required policyoptions are designed and implemented. This is realized based on the current pattern and trendof bilateral trade and prevailing state of fundamentals of the Bangladesh economy. However, inthe short run, detrimental impacts of bilateral trade deficit can be minimized if appropriate

steps are taken. For effective and durable solution, medium and long-term measures must beundertaken too. Below are some remedial measures that could be considered to improve thetrade imbalance between these two neighboring countries.

Conclusions

Although the issues of the bilateral trade between Bangladesh and India are very much debatableand broad I have tried to review some important issues like patterns, dynamics and volume of the

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Center for Monitoring Indian Economy (2004). Indias Trade.

Doing Business 2009: Country profile for Bangladesh, World Bank

Export promotion Bureau, Ministry of Commerce. Bangladesh Government

International Trade Centre (ITC), UNCTAD

Bangladesh economic review 2004, 2005, 2006, 2007, 2008, 2009, 2010

National Board of Revenue, Bangladesh Government (2008)

The Global Competitiveness Report 2008-2009, World Economic Forum (WEF)

Bangladesh Bureau of Statistics

Bangladesh Bank

Centre for Policy Dialogue (CPD) Bangladesh

Web links :www.google.comwww.global-finance.com

50720188 bilateral trade between bangladesh and india

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