India – Bangladesh Trade Relations
Both Bangladesh and India are two major countries of the SAARC and have a long commonhistorical past and similar cultural and social evolution. There is much that unites the twocountries – a shared history and common heritage, linguistic and cultural ties, passion for music,literature and the arts; with Bangladesh, India shares not only a common history of struggle for freedom and liberation but also enduring feelings of both fraternal as well as familial ties. Thiscommonality is reflected in multi-dimensional relations with Bangladesh at several levels of interaction. High-level exchanges, visits and meetings take place regularly alongside the wide-ranging people-to-people interaction. India’s Missions in Bangladesh issue about half a millionvisas every year and thousands of Bangladeshi students study in India on self-financing basis andover 100 annual GOI scholarships. These exchanges and interactions serve as an importantadjunct to the official-level interaction. India’s land border with Bangladesh – nearly 4,096 km – is the longest that India has with any of its neighbours.
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.India’s 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 and Neighboring 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 free border 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
Manoj Kumar Singh @ Fortune Institute of InternationalBusiness