B-NESI Trade (Dec 30, 2013)

Background Research Report on
Enhancing Trade and Removing Tariff & Non-tariff Barriers
FOR
Proposed Two Day Economic and Commercial Conclave between

Bangladesh and North-Eastern States of India (B-NESI)
December 30, 2013
The Institute for Policy, Advocacy, and Governance (IPAG)

14B Chandrashila-Suvastu Tower
69/1 Bir Uttam Qazi Nuruzzaman Road
Dhaka 1205, Bangladesh.
T: 880 2 96 411 71/72/73 (3 numbers)
F: 880 2 96 411 74
email: info@ipag.com.bd
web: http://www.ipag.com.bd
Enhancing Trade and Removing Tariff and Non-tariff Barriers
Acknowledgements
This report is the collective effort of the research team and those who were generous and supportive in
providing relevant data. In that sense, we sincerely thank Mr. Mokabbir Hossain, Deputy Secretary of
Ministry of Commerce; Ms Farhana, Deputy Director, Bangladesh Tariff Commission and Mr. Md.
Abu Musa, Deputy Chief of Bangladesh Tariff Commission for their kindest cooperation.
Let us pay our hearty thanks to Mr. M Rafiul Alam for his deepest insights. This paper would not have
been as informative and sound without his thoughtful and professional comments and suggestions. We
also thank Senior Researcher of IPAG, Mr. Tahmid Zami for his initial study and outline on this issue.
And finally, we owe a profound gratitude to Syed Munir Khasru, Chairman of IPAG for his
unflagging support and continual inspiration to conduct and document this research. Writing this paper
would have been harder without his invaluable advice and guidance.
The Institute for Policy, Advocacy and Governance (IPAG) | 1

Abbreviations
APTA : Asia Pacific Trade Agreement
BIMSTEC : Bay of Bengal Initiative for Multi-Sectoral Technical and
Economic Cooperation
BSTI : Bangladesh Standard Testing Institute
B-NESI : Bangladesh and North-Eastern States of India
CFL : Central Food Laboratory
CUSFTA : Canada USA Free Trade Agreement
DGFT : Directorate General of Foreign Trade
GATT : General Agreement on Tariffs and Trade
GDP : Gross Domestic Product
JWG : Joint Working Group
LCS : Land Custom Station
MAF : Most Favored Nation
MDNER : Ministry of Development of North Eastern Region
NAFTA : North American Free Trade Agreement
NEC : North Eastern Council
NESI : North Eastern States of India
NTBs : Non-tariff Barriers
PTA : Preferential Trade Agreement among D-8 Countries
RoO : Rules of Origin
SAD : Special Additional Duty
SAFAS : SAARC Framework Agreement on Trade in Service
SAFTA : The Agreement on South Asian Free Trade Area
SAPTA : SAARC Preferential Trading Agreement
SPS : Sanitary and Phyto-Sanitary
TBT : Technical Barriers to Trade
TRIPS : Agreement on Trade Related Aspects of Intellectual Property
Rights
UNCTAD : United Nations Conference on Trade and Development
UNESCAP : United Nations Economic and Social Commission for Asia and
the Pacific
USD : United States Dollar
WTO : World Trade Organization

List of Tables
Table 1: The Distance of NESI from Three Bangladeshi Important Cities........................................................12
Table 2: Bangladesh-India Trade Flow (in million USD).................................................................................13
Table 3: Export-Import Scenario of Bangladesh and India (in million USD)....................................................14
Table 4: Bangladesh-NESI Trade Flow........................................................................................................... 15
Table 5: Border Length and LCSs................................................................................................................... 16
Table 6: Import-Export Scenario through Assam Border (Rs. Lakh)................................................................17
Table 7: Import-Export Scenario through Meghalaya Border (Rs. lakh).........................................................17
Table 8: Import-Export Scenario through Tripura Border (Rs. Lakh)..............................................................17
Table 9: Tariffs Imposed on Some Light Engineering Products.......................................................................19
Table 10: Tariffs Imposed on Some Food Products........................................................................................ 20
Table 11: Share of different Non-tariff Barriers in the SAARC region.............................................................20
Table 12: Existing Tariff-bands in Bangladesh............................................................................................... 23
Table 13: Basic Information of B-NESI region................................................................................................ 24
Table 14: Favorable Factors for 3 Contiguous North Eastern States...............................................................25
Table 15: Highest Comparative Advantage for Products (Regional Specialization Index) of NESI....................26
Table 16: Updated Status of the Decision Taken........................................................................................... 27
Table 17: U.S. trade in goods with Canada (USD)......................................................................................... 31
Table 18: Benefit Accrued From Bilateral Trade between USA and Canada...................................................33
Table 19: Trade data (.000 $)........................................................................................................................ 34
Table 20: Benefit accrued from bilateral trade between Turkey and Iran......................................................36

List of Figures
Figure 1: Trade Imbalance between Bangladesh and India............................................................................14
Figure 2: Average Share of Overall Border Trade with Assam, Meghalaya and Tripura..................................15
Figure 3: Border Trade with Assam, Meghalaya and Tripura.........................................................................18
Figure 4: One of the Border Haats near Meghalaya-Bangladesh Border........................................................28
Figure 5: Trade Facilitation Model................................................................................................................ 30
Figure 6: U.S. trade in goods with Canada.................................................................................................... 33
Figure 7: Trade data (.000 $)........................................................................................................................ 35

Contents
Acknowledgements................................................................................................................................1
Abbreviations.........................................................................................................................................2
List of Tables...........................................................................................................................................3
List of Figures.........................................................................................................................................4
Contents.................................................................................................................................................5
Executive Summary................................................................................................................................7
1. Background Information.................................................................................................................9
1.1 Why Bilateral Trade between Bangladesh & NESI?....................................................................10
2. Status of Current Trade................................................................................................................12
2.1 Trade between Bangladesh and India........................................................................................12
2.2 Trade between Bangladesh and NESI.........................................................................................14
2.2.1 Border Trade through Assam-Bangladesh Border...............................................................16
2.2.2 Border Trade through Meghalaya-Bangladesh Border........................................................16
2.2.3 Border Trade through Tripura-Bangladesh Border..............................................................17
3. Barriers Prevailing in Bangladesh-India/Bangladesh-NESI Trading...............................................18
3.1 Tariff as Barrier...........................................................................................................................18
3.2 Non-tariff Barriers (NTBs)...........................................................................................................19
3.2.1 Non-tariff Barriers from Indian Side....................................................................................20
3.2.2Non-tariff Barriers from Bangladesh Side.............................................................................21
3.2.3 Non-tariff Barriers from Both Sides.....................................................................................21
3.3 Identifying the Level of Openness..............................................................................................22
3.4 Competitive advantages of B-NESI region..................................................................................23
4. Recent Trade Initiatives Taken.....................................................................................................26
5. Potential Areas of Intervention....................................................................................................29
6. Success Story of Border Trading...................................................................................................30
6.1 USA-Canada trade relationship...................................................................................................31
6.1.1 Trade scenario: Exports from US to Canada........................................................................31
6.1.2 Trading Scenario: Imports from Canada by US....................................................................31
6.1.3 Trade Balance......................................................................................................................31
61.4 Legal Framework..................................................................................................................32
6.1.5 Recent Initiatives.................................................................................................................33

6.2 Iran-Turkey trade relationship....................................................................................................33

6.2.1 Trade Scenario and Trade Pattern: Turkish exports to Iran.................................................34
6.2.2 Trading Scenario and Trade Pattern: Iranian exports to Turkey..........................................35
6.2.3 Bilateral trade: Win-win benefit for Turkey and Iran............................................................35
7. Conclusion....................................................................................................................................36
8. References....................................................................................................................................37

Executive Summary
The potentials of mutual economic benefits between Bangladesh and India has not yet been explored
and channeled to the extent it should have been, even though there exists a lot of complementarities
between these two nations. In a similar vein, the gesture of friendship that these two emerging nations
have shown each other over history is not reflected in the area of economic cooperation, especially in
the areas of trade and business. This statement stands true also in the case of the economic potential
between Bangladesh and North Eastern States of India (B-NESI). The resultant is the specifically far
lower trade volume in this region.
Drawing from evidence presented in existing literature, it could be said that expanding trade and
commercial relationship may bring long term economic benefit for both Bangladesh and the NESI.
Bangladesh can reduce the negative trade balance with India as it can tap the opportunities to enlarge
export volume to the neighboring NESI region. Bangladesh has the geographic advantage as it shares
1880 km international border with four north eastern states naming Tripura, Meghalaya, Mizoram and
Assam. Its geographical location and proximity can make it a natural trading partner for the north
eastern states (Rahman, 2011). Evidently, the growing export in the region from Bangladesh is an
indication of the possibilities of furthering the current export volume. It offers an opportunity to
Bangladesh to reduce its skewed trade balance 1 with India. On the other hand, from the Indian
perspective, it can make its north eastern region economically viable by developing better market
access and an appropriate environment of trade and business with Bangladesh. For India, closer
economic cooperation would help to reduce the economic isolation of its north-eastern states (De,
Raihan & Kathuria: 2012). The inference is that B-NESI economic cooperation offers a win-win
prospect for both countries.
Unfortunately, Bangladesh-India trade relationship is in the quagmire of both tariff and non-tariff
barriers. Research has shown that when non-tariff barriers work along with tariffs have hampered
trade to a significant extent. One study showed that the impact of non-tariff barriers could be higher
than the imposed duty (tariff) upon any products being traded between Bangladesh and India. It was
seen that 13% cost increased because of the imposed duty (tariff), while 15% cost increased because
of the non-tariff barriers for a given set of goods (Islam, 2011).
There is no denying that absence of mutual economic cooperation can only delay the unlocking of
enormous opportunities and possibilities. Owing to this reason, closer trade relationships have been
developed by countries around the world through elimination of barriers as well as creation of trade
agreements. Particularly, the trend in multilateral and bilateral cooperation among neighboring
countries has got momentum, as it falls among the lowest hanging fruits in the area of international
economic cooperation.
This study identifies some of the complexities that the B-NESI shares in trade and commerce. It
presents a range of tariff and non-tariff barriers that are hindering the immense possibilities of trade
relationship in this region. Moreover, this background study makes a case for a sustained commitment
for incremental trade facilitation to accelerate trade & business and thus to enhance prosperity of the
1
The trade between Bangladesh and India favors India with 4.5 billion USD (FY 2012-13).

teeming millions of people of this region. It also demonstrates that a carefully designed and
implemented initiative could easily remove or reduce those barriers which would enhance the trade
volume to a considerable extent. The study argues for an all-out effort for facilitating trade to ensure a
better future for both the countries. To complete this background research, relevant secondary data
from scholarly articles, books, government reports, pamphlets, newspaper reports etc. were
extensively reviewed and used. Data from the relevant ministries and departments were collected to
reflect the latest developments in this area and the status of both governments regarding trade
facilitation between Bangladesh and NESI. The websites of the relevant ministries/departments were
visited for the same purpose. Finally, this report was written upon careful review and validation of the
collected data.

1. Background Information
With burgeoning local market along with consistent GDP growth for the last one and half decade,
Bangladesh is considered as one of the emerging nations, approaching from the developing to middle
income status. ‘Goldman Sachs Investment Bank’ grouped Bangladesh amongst the Next Eleven (N-
11)2 Countries as it possesses the potential to become one of the largest economies in the world. They
see the country with promising outlook for future growth. To attain such status Bangladesh will
certainly look forward to increase its business tie with as many economies as possible. Looking
forward to increase trade cooperation, the country already has associated with some regional and
international trade agreement such as Bay of Bengal Initiative for Multi-Sectoral Technical and
Economic Cooperation (BIMSTEC) of 1997, Asia-Pacific Trade Agreement (APTA) of 1975,
SAARC Agreement on Trade in Services (SATIS) of 2010, Agreement on South Asian Free Trade
Area (SAFTA), South Asia Preferential Trade Agreement (SAPTA), etc. Bangladesh is also member
of international platforms like the UNCTAD, UNESCAP etc. In line with the above aspiration and
considering a unique feature that the country shares most of its land border with India, it certainly
seeks and expects India as a trade and business partner than anybody else.
India surrounds Bangladesh from three sides and the two countries share 4053 km international border
among themselves. Bangladesh shares its western border area with the West Bengal and the north
eastern boundary with Meghalaya, Assam, Tripura and Mizoram. The other three NESI states, viz.
Manipur, Arunachal and Nagaland are also situated close to Bangladesh. The seven states of NESI
cover an area of 255,115 sq. km. with a population of 39 million. While NESI states share less than
only 2% of their border with the rest of India, they share 1,880 km border with Bangladesh. It should
be noted that NESI is tenuously connected with rest of India by the 21 km corridor at Siliguri, mostly
known as the ‘chicken’s neck’.
Although NESI is endowed with abundant natural resources like oil, tropical forest, stones, coal,
rubber, bamboo, timber, tea, fruits, etc., it is among the least developed areas compared to other states
of India. Social and economic development in the NESI is hampered by factors including high
population growth, labor immobility, restricted land market, social unrest, etc. However, economic
analysis indicates that geographic distance and lack of economic connectivity are the two cardinal
factors responsible for the backward status of the region.
Higher economic cooperation and integration between Bangladesh and the NESI region (henceforth
referred to as B-NESI region) could unleash the latent development potential of the region.
Geographic proximity and a reasonable degree of cultural similarity are the two main pillars that are
frequently mentioned as enabling factors for building a solid tie in trade and business. Unfortunately,
these potentials have not yet been appreciably explored. The opportunity for enhancing the untapped
border trade between Bangladesh and India is recognized in a World Bank (WB) Report that said,
“Contiguous countries like Bangladesh and India can benefit greatly from opportunities for trade and
economic cooperation… South Asia is notoriously weak in facilitating trade at borders. The region
suffers from excessive direct costs and time taken at border crossings, and inefficiencies in cross-
2
Based on macroeconomic stability, political maturity, openness of trade and investment policies and the quality of
education, the Goldman Sachs Investment Bank and economist Jim O’Neill predicted and grouped Bangladesh, Egypt,
Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam as having high potential to
becoming the world’s largest economies along with BRICS.

border transactions. Trade in this region is also constrained by poor infrastructure, congestion, high
costs, and lengthy delays. These problems are particularly severe at border crossings, many of which
pose significant barriers to trade (De, Raihan and Kathuria: 2012).”
With the above notes, it is expected that both governments would work together to establish an
environment of trade facilitation and would strive for gaining maximum benefit from a stronger tie-up.
The WB categorically reported that both Bangladesh and India have huge scope for mutually
beneficial trade although the poor state of trade facilitation is a dampener in this regard. For instance,
transaction costs at the India-Bangladesh border are estimated to be very high due mainly to
infrastructure bottlenecks both at the borders as well as within the countries. It said a 10%
improvement in the quality of trade and transport-related infrastructure could lead to a 2.33% increase
in bilateral trade. (De, Raihan and Kathuria: 2012)
In such a backdrop, it could be deduced that an improved scenario of trade and business cooperation in
the B-NESI region is expected to boost economic development for both parties. The NESI region
would enjoy stronger economic prospects, while Bangladesh would be able to expand its production
capability. It would bring a win-win situation for both sides. A set of challenges and concerns must be
addressed to realize the slew of opportunities. From this perspective, a concerted effort by putting the
right policies in place to harmonize and minimize existing barriers to ensure broader engagement in
trade and business is expected.
1.1 Why Bilateral Trade between Bangladesh & NESI?
In spite of the large natural resource endowments, the NESI region remains underdeveloped. The
Indian government prioritizes the development of the region and has adopted special measures for this
purpose. Vision Statement of the North Eastern Region Vision 2020 stressed the importance of NESI’s
catching up with the national average income level. To materialize the vision the NESI needs
significant boost in economic growth with more economic activities and market links. Despite the
enormous trade potential, however, the current scenario is not encouraging. For instance, NESI
provides only USD 0.01 billion of India’s total export volume of USD 304.60 billion (2011-12). The
region predominantly exports primary products like limestone, boulder stone, coal, tea, fruits, etc.
While Bangladesh shares 1,880 km border with NESI, NESI shares only 2% of their border with India.
The obvious geographic contiguity of Bangladesh and NESI prepare the ground for robust trade and
commerce between them. The urban centers of Bangladesh, including the capital Dhaka, are relatively
nearer to the north eastern states compared to those of rest of India. The following table (Table 1)
shows the proximity of the capital cities of NESI to three main cities of Bangladesh and displays the
distance from Kolkata to the NESI states:

Table1: Rounded Distance (by road/km) of NESI from Bangladeshi Important Cities
Capital Cities of NESI Kolkata (the Dhaka (Capital Chittagong Sylhet (An
nearest city city of (the port city important divisional
from NESI) Bangladesh) of Bangladesh) city of Bangladesh)
Agartala 1550 136 212 163
(Capital of Tripura)
Aizawl 1480 436 519 289
(Capital of Mizoram)
Guwahati 998 443 604 233
(Capital of Assam)
Imphal 1480 922 737 373
(Capital of Manipur)
Shillong 378 380 510 139
(Capital of Maghalaya)
Kohima 1346 716 845 548
(Capital of Nagaland)
Source: Wiki and Google, 2016.
As shown in the above table, goods from NESI have to travel more than 1,550 km to reach Kolkata,
the nearest Indian market and trade hub. Understandably, for other cities in India, the consignments
have to travel longer. Given the hilly terrain of the region, delivery of goods to those remote
destinations involves a huge cost in transportation, time and effort. On the other hand, owing to the
contiguity, transportation of goods between Bangladesh and NESI would be cheaper and time-saving.
The proximity of Bangladeshi markets with millions of consumers is one of the pulling factors for the
increased trade and business between Bangladesh and NESI. The trading volume of B-NESI stayed
around USD 200 million during 2004 to 2009 period – which succinctly captures that the trade
potential of the region remains to be tapped. On top of that, there is a very significant informal trade 3
in the border area, estimated to be almost equal to the formal trade volume. The detrimental effect of
informal trade is that it remains outside the boundary of the customs duty causing revenue loss for the
Governments and it may involve trade of illegal and baleful goods along the border area. It is
important to bring the existing illegal trade to the formal trade-net and both sides need to work
together towards that goal.
With better integration in the B-NESI region, the rapid growth of Bangladeshi export to NESI could
be accelerated further. This would create an opportunity for Bangladesh to reduce the trade deficit
with India. On the other hand, the NESI states could be economically viable with a high trade-
engagement with Bangladesh. As NESI is a land locked area, Bangladesh can facilitate NESI
businesses’ access to sea through the Chittagong Port. Firms in Bangladesh and NESI would get better
market access which would significantly boost investment and economic activities. This would create
entrepreneurship and jobs, raise household incomes and reduce poverty incidence in this region. Thus,
from a broad economic point of view, it can bring mutual benefit in this region.
3
There are numerous reasons behind the high volume of informal trade in the B-NESI region. For instance, the high
tariff/para tariff barriers and the time-consuming customs procedure act as disincentives for traders to formalize their trade
transactions. Moreover, poor population residing in the border areas on both sides provides cheap labor to carry illegal goods.
Informal trade also can secure exemption from the transport cost etc. It may be noted that, the informal trade flow between
Bangladesh and India has the same pattern as the formal trade as volume of Indian goods smuggled to Bangladesh is much
higher than volume of goods smuggled from Bangladesh to India (Sengupta: 2007).

2. Current Status of Trade

2.1 Trade between Bangladesh and India
The yearly trade flow between Bangladesh and India is increasing rapidly. India is the second largest
source of imports (after China) for Bangladesh. Over 15% Bangladeshi imports come from India
whereas India imports about 1% of its total imports from Bangladesh. The volume of import from
India into Bangladesh in FY 2012-13 was USD 5,144.99 million, while the export from Bangladesh to
India was USD 639.33 million (Export Import Bank, Department of Commerce, India). The following
table (Table 2) shows the yearly volume of trade, for the last ten years, between Bangladesh and India
and at the same time it displays the widening trade gap between these two countries.
Table2: Bangladesh-India Trade Flow (in million USD)
FY Import Export to Bilateral Trade Balance

from India India Trade
2003-04 1,740.74 77.63 1818.37 -1663.11
2004-05 1,631.12 59.37 1690.49 -1571.75
2005-06 1,664.36 127.03 1791.39 -1537.33
2006-07 1,629.57 228.00 1857.57 -1401.57
2007-08 2,923.72 257.02 3180.74 -2666.70
2008-09 2,497.87 313.11 2810.98 -2184.76
2009-10 2,433.77 254.66 2688.43 -2179.11
2010-11 3,242.90 446.75 3689.65 -2796.15
2011-12 3,789.20 585.73 4374.93 -3203.47
2012-13 5,144.99 639.33 5784.32 -4505.66
2013-14
2014-15
Source: Export Import Data Bank, Department of Commerce, India
6,000.00 Bangladesh India Trade Flow

5,000.00 Import from India Export to India
4,000.00
3,000.00
2,000.00
1,000.00
0.00
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Figure1: Trade Imbalance between Bangladesh and India

2012-13
2011-12
2010-11
2009-10
2008-09
Import from India
2007-08
Export to India
2006-07
2005-06
2004-05
2003-04
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: Author, 2013
As seen from the above table (Table 2), the trade deficit between Bangladesh and India in the FY
2003-04 was USD 1.6 billion which tripled in a span of ten years. Figure 1 shows that Bangladesh
imports 08 (eight) times more than what it exports to India. While Bangladesh exports textile fibre,
paper yarn, apparel, clothing accessories, rags, aquatic items including fish as some of the major items,
it imports mainly the cotton, cereals, vehicle/vehicle accessories and machinery & mechanical
appliances from India. The following table shows the import-export scenario of Bangladesh and India
in terms of top five commodities exported or imported:
Table 3: Export-Import Scenario of Bangladesh and India (in million USD)
Export from Bangladesh to India Import from India to Bangladesh
Commodities 2010-11 2011-12 Commodities 2010-11 2011-12
1. Other vegetable textile 99.5 145.3 1. Cotton 1081.39 1076.74

fibers: paper yarn and
woven fabrics of paper
yarn
2. Fish, crustaceans, 59.2 75.21 2. Vehicles other than 248.27 320.67
mollusks and other railway or tramway
aquatic invertebrates rolling stock, and parts
and accessories thereof
3. Other made up textile 58.2 68.37 3. Cereals 172.41 266.97
articles; sets; worn
clothing and worn textile
articles; rags
4. Edible fruit and nuts; 25.8 41.6 4. Residues and waste 245.88 208.26
peel or citrus fruit or from the food
melons industries; animal
fodder
5. Articles of apparel and 16.3 32.01 5. Nuclear reactors, 122.95 196.6
clothing accessories, not boilers, machinery and
knitted or crocheted mechanical appliances
Source: Status Paper on India-Bangladesh Economic Relations, 2012

Besides formal trade, the statistics of informal trade indicate a much larger trade deficit for
Bangladesh. Unofficial India-Bangladesh trade is essentially one-way; the unofficial imports from
India are about 20 times larger than unofficial exports to India as indicated by a research conducted by
Islamic Economic Research Bureau, Bangladesh. The unofficial imports at present could be way more
than 1.5 times the official imports as this was reported by a study conducted by MARC in 1999.
Livestock and cattle are the major import items but many other commodities of everyday use are also
imported; however, items of unofficial export are limited. Other products in the unofficial import
basket include cotton saree, sugar, cereals, fruits and nuts, spices, salt, drugs, shawls etc. As against
imports, only a limited number of items are unofficially exported to India. These include indigenous
items like fish, jute, cowhides, fertilizer, RMG products, and fabrics woven with imported synthetic
yarn, as well as third country products like electronics, synthetic fabrics, cigarettes, plastic products,
brass and copper.
A key explanation of why traders prefer informal routes to import is that official channels have high
transaction cost and entail higher tariffs and regulations. On the other hand, informal trade is easier,
more convenient and profitable. It requires no paper work and payments are quickly realized with no
procedural delays. The various forms of trade barriers that exist are discussed in later sections of the
study and it is important that there restrictions are reduced to make the official channels more effective
and efficient.
2.2 Trade between Bangladesh and NESI

As mentioned earlier, the existence of informal trade between Bangladesh and NESI and a growing
trend of formal trade are the indicators of enormous local demand of goods prevailing in both sides.
The following table (Table 4) shows the import export scenario in between Bangladesh and NESI:
Table4: Bangladesh-NESI Trade Flow
FY Import from NESI Export to NESI Trade Volume

(million USD) (million USD) (million USD)
2004 147.86 4.9 152.76
2005 198.73 11.4 210.13
2006 180.10 18.4 198.5
2007 249.14 30.2 279.34

2008 242.01 34.2 276.21
2009 137.54 50.45 187.99
Source: Rahman, 2011

Figure 2: Export-Import Trend between Bangladesh and NESI
Export-Import Trend, Bangladseh-NESI

300
250
200
150
100
50
0
2003 2004 2005 2006 2007 2008 2009 2010
Import from NESI (million USD) Export to NESI (million USD)

Linear (Export to NESI (million USD)) Trade Volume (million USD)
Source: Author
From the above table (Table 4), it is seen that although the combined trade volume between
Bangladesh and NESI has a slow growth (often a negative growth), the Bangladeshi export to the
NESI region is increasing remarkably. Bangladeshi finished products have a huge demand in the NESI
region; one survey shows that Bangladesh products like Textile, RMG, Ceramics, jute, cosmetics,
agro-based food products, battery, electronic appliance, furniture, agricultural products and
construction materials have huge demand in the NESI (Rahman, 2011).
The trade between Bangladesh and NESI is done through a number of Land Customs Stations. The
following table (Table 5) shows the border length and the existing functional and non-functional LCSs
in the border area:
Table5: Border Length and LCSs
State Border Length Distribution of LCSs

(km)
Functional Non-functional Total
Assam 263 5 3 8
Meghalaya 433 8 2 10
Tripura 856 7 0 7
Mizoram 318 0 1 1
Total 1870 20 6 26
Source: RIS, MDNER, NEC, 2011

2.2.1 Border Trade through Assam-Bangladesh Border

The border trade between Bangladesh and Assam is dominated by the export from Assam to
Bangladesh. Coal and lime are the two major items that are imported to Bangladesh through the border
area. Ginger, dry fish, stainless steel, fruits are some of the other items that are imported along this
border. On the other hand, Bangladesh exports mainly RMG, electronic goods, and fabrics along this
border. The following table (Table 6) shows the trading scenario along the Assam-Bangladesh border:
Table6: Import-Export Scenario through Assam Border (Rs. Lakh)
Year Import from Export to Total Trade between Major items Major items
Assam Assam Bangladesh-Assam imported exported to
from Assam Assam
2003-04 4829.00 155.75 4984.75 Coal, lime, RMG,
2004-05 2461.25 662.00 3123.25 ginger, dry electronic
2005-06 3567.60 920.31 4487.91 fish, stainless goods,
steel, motor baggage,
2006-07 5238.55 3063.65 8302.20
spirit, fruits, fabrics, motor
2007-08 4215.43 2154.67 6370.10 tiles, parts,
2008-09 4834.56 2543.12 7377.68 perfumery polythene,
compound. paper.
2.2.2 Border Trade through Meghalaya-Bangladesh Border

Amongst the four Border States, the lion’s share of border trade is done through the Meghalaya-
Bangladesh border area. The trading through this area is lopsided in favor of Meghalaya. More than
63% of the total trade between Bangladesh and NESI region is completed through this area. Lime
stone, coal, raw hides and fruits are some of the major items that Bangladesh imports while exporting
synthetic net fabrics, processed food and edible items through this area. The following table (Table 7)
shows the export import picture through this border line:
Table7: Import-Export Scenario through Meghalaya Border (Rs. lakh)
Year Import from Export to Total Trade Major items Major items
Meghalaya Meghalaya between imported from exported to
Bangladesh- Meghalaya Meghalaya
Meghalaya
2003-04 18851.31 25.70 18877.01 Lime stone, coal, Synthetic net

2004-05 16378.54 32.82 16411.366 raw hides, fruits, fabrics,
ginger, tamarind. food/edible items,
2005-06 17950.70 207.53 18158.23
processed food,
2006-07 23538.18 499.61 24037.79 fish.
2007-08 23654.12 554.92 24209.04
2008-09 24043.56 578.23 24621.79

2.2.3 Border Trade through Tripura-Bangladesh Border

Unlike Bangladesh-Assam or Bangladesh-Meghalaya, the trading pattern of Bangladesh-Tripura is
skewed in favor of Bangladesh. Most of the Bangladeshi export to NESI region is completed through
this border area. Cement, crushed stone, fish, juice, fabrics and toiletries are some of the major items
that Bangladesh exports to Tripura. The following table (Table 8) depicts the existing trade pattern
along the Bangladesh-Tripura borders;
Table8: Import-Export Scenario through Tripura Border (Rs. Lakh)
Year Import from Export to Total Trade Major items Major items
Tripura Tripura between imported from exported to
Bangladesh and Tripura Tripura
Tripura
2003-04 138.49 970.63 1109.12 Ginger, fruits, Cement,
2004-05 202.43 978.30 1180.73 bamboo, dry crushed
2005-06 73.63 3559.34 3632.97 fish, dry chili, stone, fish,
2006-07 86.56 4339.22 4425.78 raw hides, coal. juice, fabrics,
2007-08 112.54 6342.87 6455.41 toiletries.
2008-09 142.43 7983.45 8125.88
To sum up, the trade between Bangladesh and NESI region predominantly concentrated on the
agricultural commodities, processed food, garments and mineral. Import from Bangladesh to NESI is
dominated by the finished goods like garments, processed food, synthetic fabric, cement etc., while
NESI’s export to Bangladesh is dominated by raw materials like coal, limestone, stone, agro-
horticultural products like ginger, fruits etc. The following figure (Figure 2) shows the overall border
trade with three NESI naming Assam, Meghalaya and Tripura:
Figure 2: Average Share of Overall Border Trade with Assam, Meghalaya and Tripura
Average Share of Overall Border Trade

Assam Meghalaya Tripura
13% 19%
68%

Figure 3: Border Trade with Assam, Meghalaya and Tripura
25000
20000
15000
10000 2006-07
2007-08
5000 2008-09
3. Barriers Prevailing in Bangladesh-India/Bangladesh-NESI Trade

Bangladesh is a relatively small country compared to India and its export basket is smaller than its
counterpart. As a bigger economy, India has a good number of competitive edges over Bangladesh,
especially in the areas of technology and diversification. That is why, in most cases, Indian products
are more competitive, especially in terms of quality and price. However, cost and quality are not the
only factors that determine the bilateral export and import scenario. The tariff structure and
innumerable non-tariff barriers4 significantly constrain volume of exports from Bangladesh to India.
The following sections (Section 3.1 and 3.2) narrate the tariff and non-tariff barriers prevailing in trade
between these two countries.
3.1 Tariff Barriers

Tariff rate imposed on Bangladeshi commodities by India is complex and difficult to rationalize. The
rate (in percentage) varies even with the same category of commodities. Furthermore, although there
exist exportable products with zero basic duty, other forms of duty like countervailing duty, additional
customs duty etc. often compose a larger amount of duty to be paid. These additional tariffs (called
para-tariffs) are the reasons that Bangladeshi product lose their competitiveness in terms of price. The
following tables (Table 9 &10) depict the scenario of the existing duty structure from Indian side:
4
Non-tariff barriers (sometimes called the non-tariff measures) are the measures that can potentially have an
economic effect on international trade in goods.
Table 9: Tariffs Imposed on Some Light Engineering Products
Product Basic Countervailing CESS, Additional

Duty Duty Local Custom Duty
Tax
PVC pipes 12.5% 8% 3% 4%
Plastic Furniture 0% 8% 3% 4%
Plastic Household Items 12.5% 8% 3% 4%
Hand Tube well 0% 8% 3% 4%
Source: Islam (2011)
Table10: Tariffs Imposed on Some Food Products
Product Basic Countervailing CESS, Additional

Duty Duty Local Tax Custom Duty
Drink 0% 8.24% 3% 4%
Juice 0% 0% 0% 0%
Chips 0% 0% 0% 0%
Crackers 0% 8.24% 3% 4%
Milk Candy 0% 14% 3% 4%
Fruit Flavored Candy 0% 8.24% 3% 4%
Source: Islam (2011)
It is evident from the above tables (Table 9 &10) that different tariffs are imposed on the same type of
commodities. It could be argued that the main function of the different tariff imposed on the same type
of products is diminishing the competitive edge of the products that has relatively larger demand in the
Indian markets.
3.2 Non-tariff Barriers (NTBs)

With the advent of free market economy and trade liberalization, tariff continues to decline globally.
However, emergence of non-tariff barriers has remained as a measure of protection widely used in the
discourse of trade. It is evident that NTBs play a negative role in advancing trade amongst the SAARC
countries. The following table shows the percentage share of different NTBs in this region:
Table 11: Share of different Non-tariff Barriers in the SAARC region
Non-tariff Barriers Share

Sanitary and Phyto- Sanitary (SPS), Technical 86.3
Barriers to Trade (TBT) and other related Barriers
Tariff Quota 9.8

Anti-Dumping 7.4
License Requirement 5.3
Countervailing Measures 1.2
Source: Rahman, 2013

To a greater extent, it is expected that the share of different NTBs in between Bangladesh and India
would also be of similar nature. The existing non-tariff barriers between Bangladesh and India are
discussed below:
3.2.1 Non-tariff Barriers from Indian Side

There are a range of non-tariff barriers from Indian side that restrict trade. The different types of non-
tariff barriers are described below:
Regulatory restrictions on food products: every consignment with food products on the way to India
has to go through the procedure of lab test from Central Food Laboratory (CFL) located in
Calcutta/Guwahati as Indian customs authorities do not accept the certificate of Bangladesh Standard
Testing Institute (BSTI). What is particularly problematic is that the authority does not allow any
application to review the test result of the CFL. According to a WB report, “India’s Prevention of
Food Adulteration Rules 1955 is somewhat complicated and is not easily understood. For instance,
rule 32 has 30 provisions with further sub-provisions. It also cross-references other rules prescribing
content, size and design of labels, display-panel specifications, details of colors and flavors, trade
names, and so on. Compliance of Sanitary and Phyto-Sanitary (SPS) measures sometimes turn into
barrier to trade. As WB observed, India requires permitted risk analysis of agricultural imports. It
covers about 600 items with the aim of protecting human, animal or plant life or health. Nearly all
livestock, agricultural, and food imports require Sanitary or Phyto-Sanitary certificates and import
permits from India’s Ministry of Agriculture. No certificate from the country of origin is accepted;
besides, the results of laboratory tests cannot be challenged and separate regulations exist for various
food types (De, Raihan and Kathuria: 2012). Because the laboratory test takes few weeks, the
consignment of food products are to be stored in bonded warehouses until completion of the
laboratory test. All that mean, Bangladeshi export items have to wait an additional 15-25 days before
crossing the border.
Restrictions on RMG export: Although the major Bangladeshi export item is RMG, volume of export
to India of this item is not significant. The explicit reason is identified by the WB. According to the
report, Bangladesh RMG exporters must obtain a pre-shipment inspection certificate from a textile
testing laboratory accredited to the National Accreditation Agency of the country of origin. Non-
availability of the certificate requires testing from the notified agencies in India for each and every
consignment. In addition, the Textile (consumer protection) Regulation of 1988 imposes strict marking
requirements for yarns, fibers, and fabrics imported into India (De, Raihan and Kathuria: 2012). These
specifications act as bureaucratic red tapes delaying and discouraging exports to India.
Customs Harassment: According to the principle of WTO, similar products that are imported by any
state should be treated equally by the counterpart. According to Article 3 of GATT and Article 3
of TRIPS, this arrangement is called as National Treatment. However, Bangladeshi products do not
receive this treatment fairly. There are complaints that the customs authority frequently changes the
position where to label the expiry date of juice packets. Taking example from the experience of
exporters, it could be said that the customs authority sometimes deliberately set some criteria that
obstructs Bangladeshi export. Filling up of a big questionnaire for submission to Indian customs was
another such complaint raised by a battery exporter from Bangladesh.

Although the Directorate General of Foreign Trade (DGFT) of India should remain the sole authority
to impose rules and regulations, it is not uncommon that the State Customs Departments sometimes
ban different items to be imported to India. In once case, DGFT claimed complete ignorance once
soap export from Bangladesh to West Bengal was banned by the customs authority of West Bengal.
Travelers’ Immobility: Difficulties and restriction on movement of Bangladeshi citizens and business
people is another non-tariff barrier as they have to go through a number of procedures for the purpose.
Even Bangladeshi citizens are restricted to travel to some of the northern states like Mizoram and
Nagaland. In addition, vehicle movement restrictions act as another non-tariff barrier, as Bangladeshi
truck drivers are not always allowed to cross the no man’s land to unload the goods.
3.2.2Non-tariff Barriers from Bangladesh Side

While the above discussion shows some of the non-tariff barriers that are hindering Bangladeshi
export to NESI region, Bangladesh also imposes some non-tariff barriers to Indian goods. For
instance, the country has imposed over 60% supplementary duty on import of plastics from India and
it maintains 225 items in its sensitive list in terms of trade with India, covering machinery,
pharmaceuticals, textiles, etc. Moreover, the restriction from Bangladesh limit professional exchanges
and cooperation as Indian companies and professionals face difficulties in sending remittances back to
India because of ceiling on repatriable accounts. (De, Raihan and Kathuria : 2012)
3.2.3 Non-tariff Barriers from Both Sides

Along with the existence of non-tariff barriers from individual countries, there are some commonly
imposed barriers from both ends. One of these is the port restriction. For instance, not all Indian ports
accept cargoes from Bangladesh. There is also route-restriction as some of the import items are
allowed to be traded through only a few specified land ports. Bangladesh also imposes port restrictions
on Indian exports. For example, restrictions exist on export of vulcanized rubber thread via Akhaura
LCS. Similarly, exports of yarn, milk powder, fish, sugar, and potatoes from India (particularly from
the northeastern states and West Bengal) face port restrictions in Bangladesh (De, Raihan and
Kathuria: 2012).
While the above barriers are deliberately imposed, the poor conditions of the Land Custom Stations
work as natural non-tariff barriers. Facilities of LCSs on both sides are inadequately equipped and
manned. Subsequently, it is causing delays in transaction and clearance. Manual loading-unloading
facilities also hamper smooth transaction. The poor connectivity and the dilapidated condition of road
passage of both Bangladesh and Indian side affect the movement of goods. Besides, the labor and
vehicle syndicate across the border restrict importers from using own labor and vehicle to carry goods
from the landing center to the warehouse. The existence of informal intermediaries creates a practical
bottleneck and increases transaction cost for both the countries. Moreover, lack of direct
correspondence between Bangladeshi and Indian banks could be identified as another major non-
tariff barrier.

3.3 Identifying the Level of Openness

With the advent of free market economy, the Indian government undertook reform measures to
provide a friendly environment for foreign trade by simplifying the procedures. The major legislation
in India concerning foreign trade is the Foreign Trade (Development and Regulation) Act, 1992.
According to the said Act, Indian government can make provisions for facilitating and controlling
foreign trade. Moreover, the government is authorized to formulate and announce export and import
policy and is also authorized to appoint a 'Director General of Foreign Trade (DGFT)’ for the purpose
of the Act. The DGFT, while formulating guidelines and principles, adopts and enforces measures
necessary for protecting public morals; life & health of human, animal and plant; patents, trademarks,
copyrights; national treasures of artistic, historic and archaeological value; exhaustible natural
resources; trade of fissionable material; and traffic in arm and ammunition. The DGFT also issues
license to exporters and monitors their corresponding obligations through a network of 32 regional
offices.
On the other hand, as a country with a small economy and an LDC, Bangladesh always maintains a
balance of the market economy and protection of its local industries. Bangladesh is one of the
countries who imposes high tariff on imports. The Customs Act, 1969 of Bangladesh includes
necessary provisions to prevent serious injury to the domestic industry. For instance, it has the
provision to impose the safeguard duty (Rule18E), Anti-dumping duty (18B) and countervailing duty
(18 A). Like India, Bangladesh also brought about reforms in line with the trend of market economy.
Bangladesh embraced tariff reforms in the early nineties when the number of customs duty slabs was
17. However, it has been reduced to four as to reduce hassles over tariff assignments. The following
table (Table 12) shows the existing tariff bands in Bangladesh:
Table 12: Existing Tariff-bands in Bangladesh
Tariff bands Commodity categories Stage of processing

(%)
3 Capital machineries
7 Basic raw materials First stage
12 Intermediate goods Semi-processed
25 Final consumer goods Final stage
0 Ranges from raw materials to final
goods, like life-saving drugs
Source: ThaiBizBangladesh.net, 2009.
Dividing the commodities into four such categories has simplified the tariff regime and made it
uniform and transparent although there are exceptions to the above categorization. Moreover, as
Bangladesh embraced the market economy, it has been reducing the tariffs gradually. Statistics
showed that Bangladesh has been reducing average tariffs by roughly two percentage points every
year. Nonetheless, Bangladesh still relies heavily on customs revenue. According to WB report,
customs revenues contribute less than 2 percent to tax revenue in USA, Japan and Germany. It is
under 7% in China and 17-18% in India and Vietnam, compared to Bangladesh’s 42% today (De,
Raihan and Kathuria: 2012).

About the tariff structure from Indian side, a list of 428 products with eight digit Harmonized System
(HS) codes are restricted and cannot be imported without any license. A prohibition of import is
maintained on 52 HS line. Moreover, 33 products are allowed to be imported only by State Trading
Enterprise and 74 items are subjected to mandatory standard requirement. Recently, India granted duty
free access to all Bangladeshi products other than 25 under SAFTA. However, there are some para-
tariffs that are being imposed on the Bangladeshi goods such as the Additional Duty (popularly known
as Countervailing Duty), Secondary Education Cess, Higher Education Cess and Special Additional
Duty. Additional Duty ranges from 0 to 16% and ideally it should be assessed on the basis of Duty
Paid Value of the imported goods. However, in many instances, it is assessed on the Maximum Retail
Price (MRP), declared by the Importer or Exporter. Secondary Education Cess and Higher Education
Cess are determined at the rate of 2% and 1% respectively. Special Additional Duty (SAD) is levied at
the rate of 4%. SAD is levied on the basis of assessable value and amount of Additional Duty,
Secondary and Higher Education Cess and given exemption on Most Favored Nation (MFN) basis.
Conceiving the above discussion and looking at the tariff structure, it could be said that India seems to
be more open when it comes the issue of Indo-Bangla trade relation. However, the major role being
played is that of the existing non-tariff barriers (excluding the para-tariff). As discussed in the previous
section, the large number of barriers forestalls the optimum outcomes of trade between Bangladesh
and India. Bangladesh has a large trade deficit with India and experts identify inadequacy of
comparative advantage and shortfall of export diversification in Bangladesh along with the non-tariff
barriers from Indian side as reasons behind the yawning gap of trade balance.
3.4 Competitive Advantages of B-NESI region

As indicated earlier, both Bangladesh and NESI have some competitive edges from individual end and
they share some form of complementariness. For instance, cultural similarity between Bangladesh and
NESI is a favorable factor for trade in this region. NESI is rich in natural resources with abundance of
gas, oil, tropical forest, stones, coal, rubber, bamboo, timber, tea, fruits etc. With fertile soil and non-
extreme climatic condition, NESI can boost its agriculture and can go for multiplying the export of the
agricultural and forest products to Bangladesh which has a large consumer base. Moreover, the
fledging manufacturing sector in the NESI region can be benefitted from Bangladeshi markets. On top
of that, natural gas, oil and electricity could be traded (export from NESI) from the energy rich NESI
to energy hungry Bangladesh; capitalizing this will enable Bangladesh to ensure faster and easier
industrialization.
With a burgeoning middle class and thus escalating aggregate demand, Bangladesh could be the prime
destination of business for the North Eastern States. Geographically, Dhaka with its 14 million
populations and 4.1% annual growth (in population) is not far away from NESI region. Because of the
proximity and growing demand, this megacity could be an exclusive business attraction for the NESI
region. The following table (Table 13) furnishes some basic information of B-NESI region that will
help rationalize the demand and business prospect:

Table13: Basic Information of B-NESI region
Area Population Population Agricultural Per Capita Literacy

(sq. (million) Density Land Agricultural Rate
km) Census (million Land (sq (2011)
2001 hectors) meter)
Bangladesh 147570 124 843 8.44 681 57.535
Tripura 10492 3.2 304 0.28 878 87.75
Assam 78438 26.66 340 3.55 1332 73.18
Meghalaya 22429 2.32 103 0.022 97 75.48
Mizoram 21087 0.89 42 0.63 7079 91.58
Manipur 22347 2.29 107 1.95 7590.28 79.85
Nagaland 16579 1.99 120 1.62 8204.59 80.11
Arunachal 83743 1.10 13 0.007536 54.51 66.95
Source: Different sources
As depicted above, the per capita agricultural land and literacy rate, in general, in the NESI region is
higher than that of Bangladesh. Since Bangladesh is not a food-sufficient country, the NESI region
could take the advantage to increase the export to meet the demand, which ultimately will increase the
agricultural trade volume between these two sides. On the other hand, as an under-industrialized
region, the NESI has the demand for finished products, the area where Bangladesh has the edge. It was
observed that, “Since many of the States in the north-east suffer from underdevelopment, they have
huge demands for the outside products. Bangladesh can sell its products in the north-east which has a
market for about Rs.25000 crore, nearly five times the trade deficit of Bangladesh (Islam, 2011).”
As discussed earlier, there are a total of 26 Land Customs Stations (LCS) for trading between
Bangladesh and the bordering four north-eastern states, Meghalaya, Tripura, Assam and Mizoram.
Among them, about 64% trade and business is done through Bangladesh-Meghalaya border. However,
the possibilities of multiplying the trading with other three border states remain. The following table
(Table 14) shows the favorable factors for trading with other contiguous states (Tripura, Assam and
Mizoram) of the region:
5
Based on the Literacy Assessment Survey, 2011 the estimated literacy rate in Bangladesh for the population
age of 11 to 44 years was 53.7% (Bangladesh Bureau of Statistics).
Table14: Favorable Factors for 3 Contiguous North Eastern States
State Favorable Factors for Trade
Tripura  Bangladesh trade balance with India is always negative whereas that of with Tripura
is positive;
 Tripura is surrounded by Bangladesh on three sides and shares 856 km border with
Bangladesh;
 Important cities (of Bangladesh) like Dhaka, Chittagong, Comilla and Sylhet are
within 150 km of Tripura border;
 The value of import by Tripura from Bangladesh was about 12.56% of the total
imports by India during 2010-2011;
 Official trade between Tripura and Bangladesh started in 1994-95, but unofficial or
informal trade had been going on for long. Statistics show that, the volume of trade
between Tripura and Bangladesh increased eight folds from 2004 to 2009;
 During 2010-2011, Tripura imported 41 items from Bangladesh through official
channel and 39 items through unofficial ones;
 RMG, plastic items, juices, household grocery items and fish of various categories
are imported both formally and informally which indicates the universal demand;
 There are 7 Land Customs Stations in Bangladesh-Tripura border;
 Rice, cereals, food grains, rubber are some of the specialized commodities of Tripura
that have a great demand in Bangladesh.
Assam  Bilateral trade volume between Bangladesh and Assam is estimated to be 1 billion
USD;
 Bilateral trade almost doubled in between 2004 to 2009;
 Assam has the highest population (about 70% of total population of NESI) amongst
the north eastern States leading to a much larger market;
 Abundance in petroleum and petrochemicals, lime, sugar- the items that have a great
demand in Bangladesh;
 Garments, processed food are exported by Bangladesh, which have a high demand in
Assam.
Mizora  Border Trade Facilitation Centre at Tlabung town of south Mizoram was jointly
m inaugurated;
 Locations have been identified for opening four Border Haats along Mizoram-
Bangladesh border, which can boost exports of agricultural and horticultural items to
Bangladesh;
 Bamboo from Mizoram can be supplied to Karnaphuli Paper Mill of Bangladesh.
Quarry stones also have high demand in Bangladesh;
 Crockery, cement, poultry items, cosmetics and toiletries, garments, jute, shoes and
ceramic have high demand in Mizoram.
Source: Author, From Different Sources
While the above table shows the favorable factors that could be exploited to increase trade of the
contiguous states, the following table (Table 15) shows the region specific comparative advantages of
the agricultural/horticultural products in the NESI region:

Table 15: Highest Comparative Advantage for Products (Regional

Specialization Index) of NESI
State Products
Meghalaya Ginger, potatoes, pineapple, sesamum
Assam Tea, rapeseed and mustard, sugarcane
Tripura Natural rubber, coconut, bananas, pineapple
Mizoram Ginger, maize, sesamum
Arunachal Small millet, maize, ginger, pineapple
Manipur Chilies, rice, ginger, pineapple
Nagaland Small millet, maize
Source: NER Vision 2020
Understanding the comparative advantage of the products listed above, it could be deduced that trade
with Bangladesh can sustainably benefit the NESI states due to their lower opportunity cost,
production cost and high demand in the market of Bangladesh.
4. Recent Trade Initiatives Taken

Understanding the necessity of boosting trade within the B-NESI region, both sides were engaged in
some sort of continuous negotiations for the last few years. Incumbents from Bangladesh and India
have visited each other during the last three/four year’s tenure. Bangladesh and India announced and
signed Joint Communiqué in 2010 on the occasion of the visiting India by Honorable Prime Minister
Sheikh Hasina. According to the Joint Communique, both nations agreed on removing tariff and non-
tariff barriers in order to enhance trade and commercial ties in the region. It said, “With a view to
encouraging imports from Bangladesh, both countries agreed to address removal of tariff and non-
tariff barriers and port restrictions and facilitate movement of containerized cargo by rail and water.”
In addition, Bangladesh and India signed the Framework Agreement in 2011 with the thematic title
“Cooperation for Development between Government of the Republic of India and Government of the
People’s Republic of Bangladesh”. Both countries have been trying to strengthen cooperation aligned
with the commitment shown in those agreements. Thus, it can be said that the groundwork for
extending the cooperation has already been carried forward. The following table (Table 16) shows the
update of the decision taken through ‘Joint Communiqué 2010’and ‘Framework Agreement 2011’:
Table16: Updated Status of the Decision Taken
Event Decision Taken Status of Implementation
Joint Both countries agreed to address removal of tariff and India granted duty free access to
Communiqué, non-tariff barriers and port restrictions and facilitate all Bangladeshi products other than
2010 movement of containerized cargo by rail and water. 25 under SAFTA
(Para 32)
The Prime Ministers agreed to operationalize land Circulars were issued to make
customs stations at Sabroom-Ramgarh and Demagiri- operational of Sabroom-Ramgarh
Thegamukh, including putting in place necessary and Demagiri-Thegamukh Land
infrastructure and issue necessary notifications. Custom Stations.
Further, with respect to existing Land Customs

Stations, it was agreed to take measures for

strengthening infrastructure (Para 35)
It was agreed that Border Haats shall be established on Two Border Haats at Baliamari in
a pilot basis at selected areas, including on the Kurigram and Dolora in
Meghalaya border, to allow trade in specified produces Sunamganj have become
and products and in accordance with the regulations operational. Dhaka and Delhi are
agreed and notified by both Governments (Para 36). keen to set up eight more Haats (4
at Tripura and 4 at Mizoram) along
the India-Bangladesh border.
Framework Both Parties shall take steps to narrow trade All Bangladeshi products other
Agreement, imbalances, remove progressively tariff and non-tariff than 25 have been granted duty
2011 barriers and facilitate trade, by road, rail, inland free access to Indian Market.
waterways, air and shipping (Article 1).
Source: Author, From Different Source
‘Joint Working Group (JWG) on Trade and Commerce’ with senior officials from both sides are
being activated to identify the bottlenecks of trade and commerce and to find possible solutions. It is
comprised of Joint Secretary from the Ministry of Commerce, member from the Foreign Ministry and
any other relevant Ministry/Ministries including member from Customs Department from both
countries. JWG is supposed to hold a meeting once in a year. The study of this group focuses on
enhancing trade and commerce between Bangladesh and India. A number of sub-groups were also
formed to carry the functions of the Joint Working Group. One such subgroup regarding Land
Customs Station was given the responsibility to identify the available facilities and infrastructure of
the LCSs. This subgroup examines the Land Customs Stations and other infrastructure that are
required to be developed to accelerate border trade and business.
In addition, establishing Border Haats is one of the innovative initiatives introduced in recent times.
Two such Border Haats are at Baliamari, Kurigram and Dolora, Sunamganj along the Bangladesh-
Meghalaya boundary, functioning since 2011 and 2012 respectively. These have created much
enthusiasm along the border area and indicate the existing thirst of trade between Bangladesh and
NESI. The Haats are managed by a committee comprising of the Additional District Magistrate,
Superintendent of Police, officials from Customs Authority, BGB/BSF and the related Union Parishad
Chairmen from both sides.

Figure4: One of the Border Haats near Meghalaya-Bangladesh Border
Border Haats are set up along zero line of the international border taking 37.5 by 75 meters from each
side. Vendors are allowed to sell local agricultural & horticultural products, spices, forest products
(excluding timber), fresh and dry fish, dairy and poultry products, cottage industry items, handicrafts,
melamine products, processed food items, toiletries, cosmetics, plastic products, handloom and
wooden furniture. No local tax is imposed on the trading and each person is allowed to spend no more
than USD 50. To make the procedure easy, both Bangladeshi and Indian currencies are accepted in the
trading. To continue and expand the Border Haat initiative, eight more Haats along Tripura-
Bangladesh and Mizoram-Bangladesh are going to be established in near future. Both Bangladesh and
India are keen to set up more Border Haats along the boundaries with the expectation to witness
bilateral trade worth 20 million USD every year.
Recently, the ninth round two-day talk of ‘India-Bangladesh Joint Group of Customs Officials’ was
held in Dhaka. Led by the revenue secretary of Indian Finance Ministry and Chairman of the National
Board of Revenue from Bangladesh, some important decisions were taken at the meeting under the
established bilateral framework. Notable among the decisions taken were the free movement of the
custom officials without requiring visa, introducing car pass system in the 16 land stations in order to
ensure that the trucks could upload goods into the warehouse; synchronization of working hours of the
stations to increase efficiency, exchange of export-import related information and data including
assessed value and weight of goods on regular basis; keeping Benapole/Petrapole and Akhaura/Tripura
land ports open for all seven days a week. Most of the decisions are expected to be implemented by
January, 2014. Both authorities agreed to review capacities, limitations and potentials of their
respective sides to facilitate trade in the future. However, among others, some issues like approval of
BSTI’s testing by Indian side; proposal of withdrawing the 12 percent countervailing duties on the
apparel imports from Bangladesh; bringing informal trades under formal trade-net remained
unresolved.

5. Potential Areas of Intervention

Conceiving the enormous possibilities for trade and business, both Bangladesh and India should
seriously look upon the opportunities and should work for removing trade barriers (both tariff & non-
tariff). Removal of those barriers would increase the trade volume even in the current scale of demand
as it would encourage formalization of the booming informal trade 6 in this region. In this connection,
an in-depth study needs to be conducted to measure the size of the B-NESI market. Both Bangladesh
and India need to be prepared according to the demand and scope of trade and business as a genuine
step towards stronger tie-up. Putting right policies in place and adopting pragmatic approaches will
ensure the necessary engagement for improving trade between Bangladesh and NESI.
In order to increase the volume of trade and business, there is no alternative but to ensuring trade
facilitation. It should be the first priority to identify and prioritize the potential area to intervene.
Combined cooperation in equipping and upgrading Land Customs Stations is a must. Other
infrastructural improvement with improved connectivity should be ensured to accelerate cross-border
trade and business. Currency exchange system and simplifying visa procedures for entrepreneurs from
both sides should be ensured. Multiple entry visas for business persons could be issued both by
Bangladesh and India and hassle free banking facilities on both sides of the border should be ensured.
A common official time near the border area could be applied for ensuring maximum efficiency.
Study by WB (2012) recommended some suggestions to intensify tie-up in trade and business and as a
result increase trade between Bangladesh and NESI. The report emphasized on greater use of
information technology at all levels of trading such as electronic transfer of test reports or any other
correspondence. The improved connectivity amongst the LCSs in this regard would be pivotal. It said,
harmonization of HS codes at 8-digit level would eliminate disputes that arise at times. About
maintaining quality of goods, it suggested an addition of testing laboratories to the customs stations
that could cater testing facilities for commonly traded goods (De, Raihan and Kathuria: 2012).
Subsuming the above factors, it is expected that both sides come forward to establish trade facilitation
which includes a range of activities from process simplification to modernization of custom
administration and etc. Trade facilitation would look at operational improvement to reduce cost burden
and to maximize efficiency of border trade. It would seek to improve trade environment and enhance
business competitiveness. Simplification of rules and procedures, harmonization and standardization
of business practices and modernization are crucially important in this regard (Islam, 2011). The
following figure (Figure 5) shows the areas where both Bangladesh and India should work and
reconcile:
6
The WB study shows that there has been substantial unrecorded informal trade across Bangladesh-India border.
It shows that predominantly the agricultural commodities like cows and buffaloes, agricultural products, pulses,
timber, processed foods and textiles are traded informally (WB, 2006).
Figure5: Trade Facilitation Model
Elimination of unnecessary elements Alignment of procedures with international

Avoidance of duplications in formalities, conventions, and practices
processes, procedures and documentations
Simplification of Harmonization
Rules and with
Procedures international
customary
Provide adequate infrastructure Modernization Standardization

Modernize and enhance efficiency through of business
information technology access, electronic data practices
Adopting internationally agreed practices and
transfer and automation procedures
Source: Author (Adapted from Islam: 2011)
In order to ensure successful intervention on the above mentioned areas, Bangladesh government
should engage with state governments of NESI and local Chamber of Commerce. Engagement in
dialogue and discussion on regular basis amongst business, civil society and nongovernmental
organizations could create momentum in this regard. Moreover, government from both sides should
work hand in hand to encourage private sector initiatives so that they can come up to lead the
collaboration. The bottlenecks of the existing trade and business, between Bangladesh and NESI,
could be addressed with the combination of the aforementioned steps. It is expected that if proper
actions are taken, it would add momentum to smooth export-import procedures.
6. Success Story of Border Trading
Border trade can bring about a number of benefits and changes. It lowers the hassles of import process
and brings benefit from the higher value-add factors for the exporters. Border trade positively impacts
the lives and incomes of traders, strengthens local production, and fosters ancillary services in the
local markets. Border trade helps to nurture amicable relationship among neighboring countries by
strengthening commercial ties, promoting cultural understanding and deepening community
relationships (Sailo, 2013). Typical examples of border trading would be the United States of America
(USA)-Canada, Ukraine-Russia, China-Hong Kong and so on. This study focuses on the USA-Canada
and Turkey-Iran trade relation.

6.1 USA-Canada trade relationship

The USA and Canada share the world's largest and most comprehensive trading relationship. In 2012,
USA merchandise trade with Canada accounted to $324.2 billion in imports and $292.4 billion in
exports (USA Census Bureau, 2012). Both the countries are the largest trade partner of one another.
Canada is the single largest foreign supplier of energy to the USA. On the other hand, Canada is the
leading export market for 36 of the 50 States of USA, and is ranked in the top three for another 10
States. Trade in goods and services between the USA and Canada accounts for approximately US $1.9
billion each day, almost equal to daily USA trade with the entire European Union. In fact, the USA–
Canada trade relationship has been the largest economic association in history. Canada exports about
40 times more to the USA than to any other country, and imports about 14 times as much from the
USA as from anywhere else.
USA and Canada share an eventual development of one of the most stable and mutually-beneficial
international relationships in the modern world. Each is the other's chief economic partner. They
signed Free Trade Agreement (FTA) in 1989, a landmark of boosting trade relationship between these
two neighbors. The introduction of North American Free Trade Agreement (NAFTA) among the
USA, Canada and Mexico in 1994 gave a boost to two-way merchandise trade between the USA and
Canada. Currently, the USA and Canada share a $1.3 trillion bilateral trade and investment
relationship which supports millions of jobs in each country.
6.1.1 Trade scenario: Exports from US to Canada

Canada is the largest export market for USA. Export in 2012 accounted $291.8 billion to Canada, up
by 3.9% from 2011 and by 81% from 2002. In 2012, exports from USA to Canada account for 18.9%
of total export of USA. The top export categories of US to Canada (2-digit HS) in 2011 were Vehicles
($50.1 billion), Machinery ($46.9 billion), Electrical Machinery ($27.2 billion), Mineral Fuel and Oil
(oil and natural gas) ($18.4 billion) and Plastic ($12.9 billion). Exports of private commercial services
(excluding military and government) to Canada were $56.1 billion in 2011, 10.4% ($5.3 billion) more
than 2010 and 128% more than 2000 levels. It was up by 230% from 1993 as per Pre-NAFTA data.
6.1.2 Trading Scenario: Imports from Canada by US

Goods imports from Canada totaled $324.2 billion in 2012, a 2.8% increase ($8.9 billion) from 2011,
and up by 55% from 2002. Some of the largest import categories in 2012 were Mineral Fuel and Oil
(crude and natural gas) ($103.9 billion), Vehicles ($57.6 billion), Machinery ($20.5 billion) and Plastic
($10.2 billion). Imports of private commercial services (excluding military and government) from
Canada were $28.0 billion in 2011, up by 7.1% ($1.8 billion) from 2010 and by 57% from 2000 level.
It was up by 208% from 1993 (Pre-NAFTA).
6.1.3 Trade Balance

The import-export scenario between USA and Canada of the last few years is shown in the following
table (Table 17). The USA’s trade deficit with Canada was $32.5 billion in 2012, a 5.7% decrease
($2.0 billion) from that in 2011; however the USA has a services trade surplus of $28.0 billion with
Canada in 2011, up 13.9% from 2010.

Table 17: U.S. trade in goods with Canada (USD)
Year Export Import Balance

2013 (Jan-July) 174,015.8 192,427.4 -18,411.5
2012 292,539.7 323,936.5 -31,396.8
2011 281,291.5 315,366.5 -34,075.0
2010 249,256.5 277,636.7 -28,380.3
2009 204,658.0 226,248.4 -21,590.5
2008 261,149.8 339,491.4 -78,341.6
2007 248,888.1 317,056.8 -68,168.6
2006 230,656.0 302,437.9 -71,781.8
Source: United States Census Bureau. (2013)
Figure 6: U.S. trade in goods with Canada
Source: United States Census Bureau. (2013)
61.4 Legal Framework

Canada and USA started negotiation for free trade agreement in the mid-nineties. The Canada-USA
Free Trade Agreement (CUSFTA) came into effect in 1989. CUSFTA emphasized on the area of
eliminating barriers to trade in goods and services; facilitating conditions of fair competition within
the free-trade area established by the Agreement; liberalizing (significantly) the conditions for
investment within that free-trade area; establishing effective procedures for the joint administration of
the Agreement and the resolution of disputes and to lay the foundation for further bilateral and
multilateral cooperation to expand and enhance the benefits of the Agreement. CUSFTA had a
significant impact on the trade relationship between USA and Canada. Trade volume increased
notably and the arrangement created more jobs for both countries. It had a positive impact on living
standards and on general competitiveness. The following table (Table 18) shows some of the benefits
of the free trade agreement:

Table18: Benefit Accrued From Bilateral Trade between USA and Canada
Canada is the US's largest customer, purchasing $233 billion worth of goods in 2012.
Canadian foreign direct investment in the US was $261 billion in 2012, making Canada
the fourth largest source of FDI in the US.
Benefit for USA Over 8 million US jobs depend on trade and investment of Canada.
Canadian tourists made nearly 23 million trips to the US and spent $25.5 billion in
2012.
Canadian-owned companies in 17,000 locations across the US employ more than
619,000 Americans.
19 percent of Canada's GDP comes from goods exports to the US.

US is Canada’s prime source of direct investment, with investment stock totaling $351
billion in 2012
Benefit for American tourists made nearly 12 million trips to Canada and spent $7.6 billion in
Canada 2012.
5.2 million Canadian jobs depend on trade with the US.
The US is Canada's largest agricultural export market, taking well over half of all
Canadian food exports.
US and Canada trade $1.9 billion in goods and services daily.

Benefit in Both US-Canada exchange approximately $1.3 million in goods and services every minute.
Ways Both countries share a $1.3 trillion bilateral trade and investment relationship.
400,000 people cross the Canada-US border daily
Source: Author, From Different Sources
6.1.5 Recent Initiatives

On February 12, 2010, the US and Canada signed an agreement on government procurement. The new
procurement agreement enabled American companies to compete for Canadian provincial and
municipal construction contracts not covered by the Government Procurement Agreement. Moreover,
on February 4, 2011, the Prime Minister of Canada and the President of the US announced the creation
of a USA–Canada Regulatory Cooperation Council (RCC) to find ways to reduce and prevent
regulatory impediments to cross-border trade. Furthermore, in December 2011, two premiers from the
US and Canada announced that they would launch the Action Plan on Perimeter Security and
Economic Competiveness to further enhance and strengthen the world-class bilateral border
relationship. This plan was focused on four areas of cooperation- Addressing threats early; Trade
facilitation, Economic growth and jobs; Integrated cross-border law enforcement and Critical
infrastructure and cyber-security.
6.2 Iran-Turkey trade relationship

Bilateral economic relations between Turkey and Iran have grown at a rapid pace during the past
decade and both economies now depend heavily on these relations. The trade statistics show that the
total trade volume between Turkey and Iran grew from $1.05 billion in 2000 to $10.69 billion in 2010
and $16.05 billion in 2011, when it accounted for 4.27% of Turkey’s total foreign trade. The trade
compatibility is strongest in the energy sector: Iran is a major oil and gas exporter, while Turkey is
entirely dependent on oil and gas imports. Iran and Turkey came closer for the purposes of trade,

based on individual needs. The following table (Table 17) depicts the trade scenario between Turkey
and Iran:
Table19: Trade data (.000 $)
2006 2007 2008 2009 2010 2011 2012

Turkish 1,066,901 1,441,190 2,029,759 2,024,863 3,042,957 3,589,635 9,921,602
exports to
Iran
Iranian 5,626,610 6,615,393 8,199,688 3,405,985 7,644,782 12,461,532 11,964,778
exports to
Turkey
6,693,511 8,056,583 10,229,448 5,430,848 10,687,739 16,051,167 21,886,380
Source: Calculated by author based on Foreign Trade Statistics (2006-2012), Turkish Statistical
Institute.
Figure 7: Trade data (.000 $)
Source: Prepared by author based on Foreign Trade Statistics (2006-2012), Turkish Statistical
Institute
6.2.1 Trade Scenario and Trade Pattern: Turkish exports to Iran

Iran was Turkey’s 3rd largest goods export market in 2012. Turkish goods exports to Iran in 2012 were
$ 9.92 billion, up 176% ($ 3.58 billion) from 2011. The top export categories in 2012 were:
 Gold and golden plated silver ($ 6,528 billion)

 Iron and steel ($ 629 million)
 Textile yarn, fabrics ($226 million)
 Land transportation vehicles ($209 million)
 Electrical machinery, apparatus and appliances ($171 million)

Although Turkish exports to Iran are considerably smaller than its imports, they have also enjoyed a
sharp growth in recent years. Turkish businesses are eager to export more goods to Iran, but they face
high tariff rates.
6.2.2 Trading Scenario and Trade Pattern: Iranian exports to Turkey

Iran has been Turkey’s 6th largest supplier of goods imports in 2012. Turkey imported $12.5 billion
goods from Iran in 2012, increasing from $11.4 in 2011, mainly as a result of purchases of
hydrocarbons. Turkey’s increasing energy imports, along with the higher price of oil and natural gas,
have increased the value of Turkey’s imports from Iran from $1.9 billion (2 percent of total imports) in
2004 to $6.9 billion (3.9 percent of the total) in 2010. The top imports categories in 2012 were:
 Coal and raw petroleum materials; natural gas, plastics in primary forms ($456 million)
 Metals other than iron ($432 million)
 Organic chemicals ($103 million)
6.2.3 Bilateral trade: Win-win benefit for Turkey and Iran

The increased trade over the years has brought mutual benefits for both countries. The following table
(Table 18) shows how both countries were benefited:
Table 20: Benefit accrued from bilateral trade between Turkey and Iran
Turkey’s growing energy needs is being met getting secured energy supply from
Iran. Turkey has been purchasing Iranian oil and gas to fuel its booming growth,
with average 12% of its energy supplies coming from the Iran.
Benefit for Turkey
In 2010, Iran became Turkey’s largest single source of oil, providing 43.13% of the
country’s total imports, up from 22.75% in 2009.
The trade relationship is vital in maintaining Turkey’s energy security and allows
Ankara to distance itself from more expensive Russian supplier.
The Iranian economy has become more dependent on trade and investment
relations with Turkey—and Iran’s economic links with Turkey have played a
crucial role in reducing the economic pressure of the sanctions.
Benefit for Iran Iran relies on Turkey to provide it with access to advanced European fiber optics
networks through telecommunications cables that run through Turkey.
Iranian sales of hydrocarbons have ensured that the balance of trade is heavily in
Tehran’s favor. That's weighted in by a margin of almost four to one.
Iran and Turkey rely on each other’s territory for access to vital markets.
Both nations act as complimentary economies; Turkey imports a great deal of raw
material from Iran and exports industrial goods to the country as well.
Benefit in Both Turkey, which imports around 15 billion dollars of petrochemical products, also
Ways invest in Iran's petrochemical sector to secure its needs.
Turkey has poor energy resources and it can become a corridor for transiting
Iran's energy to Europe.


7. Conclusion
When it comes to the issue of economic development, engagement with neighbors and partner
countries should be based on pragmatic considerations instead of naïve emotions. Both Bangladesh
and India want to attain a growth rate higher than the current level for which they require inter country
trade complementation. It is the conviction of the knowledgeable quarters that if Bangladesh grows,
the NESI region will also develop and if the NESI region develops, it will add to the economic growth
of the entire India. Taking the inference from the discussion of this paper, both Bangladesh and NESI
should engage in such a fashion that would bring mutual benefits for both sides. Bangladesh enjoys
the geographic advantages as far as trade and business with NESI is concerned. As scholars say, north
eastern region of India is a natural market for Bangladesh and the country should opt for broadening
the tie-up with NESI. On the other hand, aspiring to be a strong nation in terms of economy, India
would opt to find north eastern states equally developed as its other states. To attain that NESI needs
incremental economic ties with Bangladesh. Understandably, there is a tremendous urge from both
sides to accelerate and expedite the existing opportunities in trade and business. Eyeing over the last
few initiatives, i.e., signing of Joint Communiqué (2010) and the Framework Agreement (2011) and
activation of Joint Group of Customs Officials, it could be said that an extended appetite for
cooperation in terms of trade is felt by both Bangladesh and India. Scholars thus recognized the
necessity of extensive groundwork exploring the areas of mutual cooperation. From that perspective,
this study at least has initiated that journey.

8. References
Bangladesh Bureau of Statistics (July 2011). Preliminary Results on Population & Housing Census.
Ministry of Planning, Government of the People’s Republic of Bangladesh
Bangladesh Tariff Commission (2010-11). Annual Report
Bangladesh Tariff Commission (2013). Report on Non-Tariff and Para-Tariff Barriers Applied in
India
Canada and the United States. (2013). Trade and Investment. Retrieved on October, 7, 2013 from
http://www.can-am.gc.ca/relations/commercial_relations_commerciales.aspx?lang=eng
Choubey, S.K., Pendse, N.G.,Shukla, N. (2005). Economic Reforms in India: Needs, Effects, and
Suggestions. Sarup& Sons, New Delhi.
CII for Bangla Investments in Northeast (2013, August 12). Bdnews24. Retrieved on 30 August 2013
from http://bdnews24.com/economy/2013/08/12/cii-for-bangla-investments-in-northeast
Datta, S. (July 9, 2012). Trade Imbalance Sparks Concern. The Telegraph, India. Retrieved on 23
September, 2013 from
http://www.telegraphindia.com/1120709/jsp/northeast/story_15700805.jsp#.UkGDJ9JHJlg
De, P., Raihan, S., Kathuria, S. (2012). Unlocking Bangladesh-India Trade, Emerging Potential and
the Way Forward. The World Bank, South Asia Region.
Embassy of the United States Ottawa, Canada. (2013). U.S. – Canada Economic Relations.Retrieved
on October, 7, 2013 from http://photos.state.gov/libraries/canada/303578/pdfs/us-canada-economic-
relations-factsheet.pdf
Ernst & Young (2011). Doing Business in India. Haryana, India.
Expansion of North East India’s Trade and Investment with Bangladesh and Myanmar, An
Assessment of the Opportunities and Constraints. (2011, October). RIS, Ministry of Development of
North Eastern Region, North Eastern Council. Retrieved on 01 September 2013 from
http://www.mdoner.gov.in/sites/default/files/silo4_content/REPORT%20STUDIES%20ON%20THE
%20NORTH%20EASTERN%20REGION/RIS_Border_Trade_Report_%20final.pdf
Export Policy 2009-12. Ministry of Commerce, Government of the People’s Republic of Bangladesh
Federation of Indian Export Organization (2013). NEW FOREIGN TRADE POLICY 2009-2014.
Retrieved on 19 September 2013 from http://www.fieo.org/view_section.php?id=0,30,155,633
Framework Agreement (2011). Cooperation for Development between Government of the Republic of
India and Government of the People’s Republic of Bangladesh

Habibi, N. (2012). Turkey and Iran: Growing Economic Relations despite Western Sanctions. Middle
East Brief. Retrieved on October 09, 2013, from
http://www.brandeis.edu/crown/publications/meb/MEB62.pdf
Hafezian, M. H. (2007). Iran-Turkey Economic Ties: Prospects for Improvement. Foreign Policy
Department/ International Political Economy Studies Group. Retrieved from
http://www.csr.ir/departments.aspx?lng=en&abtid=07&&depid=74&semid=959
Import Policy Order 2012-15, Ministry of Commerce, Government of the People’s Republic of
Bangladesh
Indo-Bangla Joint Study to Boost Border Trade (2012, June 9). The Assam Tribune. Retrieve on 01
September from http://www.assamtribune.com/scripts/detailsnew.asp?id=jun0912/at03
Islam, M.M. (2011). Trade Cooperation between Bangladesh and India with Special Reference to the
North-East India. Retrieved on 26 August from http://www.asthabharati.org/Dia_Apr
%20011/moh.htm
Islam, M. (2011). Non-tariff barriers in Indo-Bangla Trade. Retrieved on 27 August 2013 from
http://archive.thedailystar.net/newDesign/news-details.php?nid=184960
Jenkins, Gareth H. (2012). Occasional Allies, Enduring Rivals: Turkey’s Relations with Iran. Central
Asia-Caucasus Institute & Silk Road Studies Program, P- 6. Retrieved on October 10, 2013, from
http://www.silkroadstudies.org/new/docs/silkroadpapers/1205Jenkins.pdf
Joint Communiqué (2010). Issued on the Occasion of the Visit to India of Her Excellency Sheikh
Hasina, Prime Minister of Bangladesh
Joint Research Program Series (2005). Sub-Regional Relations in the Eastern South Asia: With
Special Focus on India’s North Eastern Region. IDE-JETRO, Retrieved from
http://www.ide.go.jp/English/Publish/Download/Jrp/133.html
Multidisciplinary Action Research Committee (MARC) (1999). Study on Promotion of Regional

trade. Interim Report submitted to the Ministry of Commerce, Government of Bangladesh, June
(mimeo).
Nath, A. (2012). The Role of Trade and Investment in Improving the Growth Prospects of Tripura
with reference to Bangladesh. New Delhi: ICRIER.
North Eastern Region Vision 2020. (2008). MDNER, NEC
Northeast States’ Trade with Bangladesh Set to Rise (2012, November 19). IANS. Retrieved on 01
September 2013 from http://www.dnaindia.com/money/1766545/report-northeast-states-trade-with-
bangladesh-set-to-rise
Office of the United States trade representative. (2013). U.S.-Canada Trade Facts. Retrieved on
October, 5, 2013 from http://www.ustr.gov/countries-regions/americas/canada

Pupkin, David. (2010). Iran-Turkey Economic Relations: What Their Rapid Growth Means for Iran’s
Nuclear Program. Retrieved on October 02, 2013, from http://www.irantracker.org/analysis/iran-
turkey-economic-relations-what-their-rapid-growth-means-iran%E2%80%99s-nuclear-program
Rahman, M., Khan, T.I., Nabi, A. and Paul, T.K. (2010). Bangladesh’s Export Opportunities in the
Indian Market: Addressing Barriers and Strategies for Future. Occasional Paper 90. CPD.
Rahman, A. (2011). Looking Closely at North East India, Retrieved on 28 August 2013 from
http://archive.thedailystar.net/newDesign/news-details.php?nid=195423
Rahman, M. M. (June 24, 2011). Trade Potential and Investment Opportunities between Bangladesh
and Northeast India
Rahman, M. (2013). Addressing Non-Tariff Barriers to Trade in South Asia. Regional Training of
Economic Journalists on Trade, Climate Change and Food Security, Marawila, Srilanka
Report on Classifications on Non-tariff Measures (2012, February). UNCTAD. Retrieved on 27

August 2013 from http://unctad.org/en/PublicationsLibrary/ditctab20122_en.pdf
Republic of Turkey: Ministry of Economy. (2013). Countries & Regions - Middle East – Iran.
Retrieved on October 05, 2013, from http://www.economy.gov.tr/index.cfm?
sayfa=countriesandregions&country=IR&region=4
SAARC TRADE. INFO (2013). Bangladesh Trade Regulation and Standard. Retrieved on 16
September 2013 fromhttp://www.saarctrade.info/SAARCTRADEINFO.aspx)
Sailo, L. (2013). Prospects for Border Trade in Mizoram. Institute of South Asian Studies
Sengupta, J. (2007), Time to Boost India-Bangladesh Trade and Economic Relations. ORF Issue Brief
#10
Singh, B. N., Shrivastava, M. P., Prasad, N. (2003). Economic Reforms in India, APH Publishing
Corporation, New Dilhi.
ThaiBizBangladesh.net (2013). Tariff Structure-Bangladesh Overview. Retrieved on 16 September,

2013 from (http://www.thaibizbangladesh.net/tariff_structure.php)
The World Bank (October 2004). India Country Note, South Asia Regional Economic Cooperation:
Private Sector Perspectives. Washington DC.
The World Bank (December 2006). India-Bangladesh Bilateral Trade and Potential Free Trade
Agreement. Bangladesh Development Series, Paper 13. The World Bank Office, Dhaka
Tripura-Bangladesh Border Fencing to Boost Trade (2011, February 9). Business Standard. Retrieved
on 01 September 2013 from http://www.business-standard.com/article/economy-policy/tripura-
bangladesh-border-fencing-to-boost-trade-111020900013_1.html

Turkish Statistical Institute. (2013). Foreign Trade Statistics 2006 to 2012. Available from Turk Stat
Data database
United States Census Bureau, (2012). U.S. trade in goods with Canada Retrievedon September 19,
2013 from US Census Bureau Database

B-NESI Trade (Dec 30, 2013)

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

B-NESI Trade (Dec 30, 2013)

Uploaded by

Copyright:

Available Formats

Background Research Report on

Enhancing Trade and Removing Tariff & Non-tariff Barriers

Proposed Two Day Economic and Commercial Conclave between

December 30, 2013

The Institute for Policy, Advocacy, and Governance (IPAG)

The Institute for Policy, Advocacy and Governance (IPAG) | 1

The Institute for Policy, Advocacy and Governance (IPAG) | 2

The Institute for Policy, Advocacy and Governance (IPAG) | 3

The Institute for Policy, Advocacy and Governance (IPAG) | 4

The Institute for Policy, Advocacy and Governance (IPAG) | 5

6.2 Iran-Turkey trade relationship....................................................................................................33

The Institute for Policy, Advocacy and Governance (IPAG) | 6

The Institute for Policy, Advocacy and Governance (IPAG) | 7

The Institute for Policy, Advocacy and Governance (IPAG) | 8

The Institute for Policy, Advocacy and Governance (IPAG) | 9

1.1 Why Bilateral Trade between Bangladesh & NESI?

The Institute for Policy, Advocacy and Governance (IPAG) | 10

The Institute for Policy, Advocacy and Governance (IPAG) | 11

2. Current Status of Trade

Table2: Bangladesh-India Trade Flow (in million USD)

FY Import Export to Bilateral Trade Balance

6,000.00 Bangladesh India Trade Flow

Figure1: Trade Imbalance between Bangladesh and India

The Institute for Policy, Advocacy and Governance (IPAG) | 12

Source: Author, 2013

Table 3: Export-Import Scenario of Bangladesh and India (in million USD)

Export from Bangladesh to India Import from India to Bangladesh

Commodities 2010-11 2011-12 Commodities 2010-11 2011-12

1. Other vegetable textile 99.5 145.3 1. Cotton 1081.39 1076.74

The Institute for Policy, Advocacy and Governance (IPAG) | 13

2.2 Trade between Bangladesh and NESI

Table4: Bangladesh-NESI Trade Flow

FY Import from NESI Export to NESI Trade Volume

2004 147.86 4.9 152.76

2005 198.73 11.4 210.13

2006 180.10 18.4 198.5

2007 249.14 30.2 279.34

2009 137.54 50.45 187.99

Source: Rahman, 2011

The Institute for Policy, Advocacy and Governance (IPAG) | 14

Figure 2: Export-Import Trend between Bangladesh and NESI

Export-Import Trend, Bangladseh-NESI

Import from NESI (million USD) Export to NESI (million USD)

Table5: Border Length and LCSs

State Border Length Distribution of LCSs

Source: RIS, MDNER, NEC, 2011

The Institute for Policy, Advocacy and Governance (IPAG) | 15

2.2.1 Border Trade through Assam-Bangladesh Border

Table6: Import-Export Scenario through Assam Border (Rs. Lakh)

2.2.2 Border Trade through Meghalaya-Bangladesh Border

Table7: Import-Export Scenario through Meghalaya Border (Rs. lakh)

2003-04 18851.31 25.70 18877.01 Lime stone, coal, Synthetic net

The Institute for Policy, Advocacy and Governance (IPAG) | 16

2.2.3 Border Trade through Tripura-Bangladesh Border

Table8: Import-Export Scenario through Tripura Border (Rs. Lakh)

Average Share of Overall Border Trade

The Institute for Policy, Advocacy and Governance (IPAG) | 17

Figure 3: Border Trade with Assam, Meghalaya and Tripura

3. Barriers Prevailing in Bangladesh-India/Bangladesh-NESI Trade

3.1 Tariff Barriers

Table 9: Tariffs Imposed on Some Light Engineering Products

Product Basic Countervailing CESS, Additional

Table10: Tariffs Imposed on Some Food Products

Product Basic Countervailing CESS, Additional