University of Dhaka

Department of International Business

Term Paper:

Trade Analysis: Bangladesh Trade with South Asian Countries

Prepared by:
Group-3
Serial No Name ID
1 Anika Bushra 801723005
2 Syed Mashhud Quader 801723007
3 Rahat Ara Islam 801723012
4 Kazi Mohammed Mofathe 801723019
5 Razea Bari 801723029
6 Tanzira Alam Shikta 801723034
7 Asif Rahman 801723058

Submitted to:
Prof. Abu Hena Reza Hasan
Professor
Department of International Business
University of Dhaka

Date of Submission: 21.08.2019

Course Code: EIB 534/532
Course Name: Bangladesh in International Business
 TABLE OF CONTENTS

SL # Topic Page Number

1 Introduction 2
Export Analysis
2 Ready Made Garments (RMG) 4
3 Agricultural Products 6
4 Leather & Leather Products 9
5 Iron & Steel 11
Import Analysis
6 Machinery and Equipment 13
7 Chemicals 14
8 Textiles and Clothing 15
9 Refined petroleum 17
10 Food Stuff 18
11 Cement 20
12 Conclusion 21
13 Data Collection Sources 21

1
1. Introduction

Bangladesh is a South Asian developing country has been acknowledged as the 9th fastest growing
economy. The economy of Bangladesh grew at an average rate of 6.5% annually in the fiscal years
from 2009 to 2016.Historically, exports and remittances have been the two key growth drivers for
Bangladesh. Bangladesh has a population of approximately 150 million which is one of the highest
population density country in the world. Bangladesh is extremely vulnerable to the effects of
climate change; flooding and earthquakes.Reducing poverty is an enormous issue because
approximately 50 million residents, one-third of the population, are poor. In addition, political
turmoil, corruption and weak infrastructure are major risks for Bangladesh. On the other hand,
with average annual economic growth of 6% during the past decade, Bangladesh is attracting
international attention as a market and a destination for investments. However, the country’s
basic infrastructure is still extremely inadequate with regard to electricity, transportation, water
and seweragesystems, and other components.

Major Export Items from Bangladesh: Major Import Items to Bangladesh:

 Readymade garments  Machinery and Equipment

 Agricultural Products  Chemicals
 Leather and leather products  Textiles and Clothing
 Iron & Steel  Refined petroleum
 Home Textile  Food Stuff
 Raw Jute  Cement
 Fish, shrimps and prawns  Iron & Steel
 Bicycle  Pharmaceutical products
 Pharmaceutical products  Fertilizer
 Handicrafts  Dyeing & tanning materials
 Tea  Plastics & rubber
 Fertilizer

South Asia includes the nations of India, Bhutan, Afghanistan, Pakistan, Sri Lanka, Maldives,
Bangladesh and Nepal. South Asia is about the same size as Europe but has a population that is
twice as large. The region is in a geopolitically key position because of its many land and sea links
with the Middle East, Central Asia and East Asia. As a result, South Asia is very influential with
regard to international politics and economic activity. Countries in this region have many religions,
ethnic groups, cultures and languages, making South Asia a region with sources of instability that
include income disparities, religious conflicts and other problems.

2
Bangladesh export to South Asian countries from 2011-2016:

Sl Countries 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

No (US$ In Million) (US$ In Million) (US$ In Million) (US$ In Million) (US$ In Million)

1 Afghanistan 3.59 3.57 3.60 4.30 4.88

2 Bhutan 9.13 1.82 1.91 4.92 4.74
3 India 498.42 563.96 456.63 527.16 689.62
4 Maldives 1.78 1.53 1.71 5.64 3.05
5 Nepal 61.97 26.41 13.69 25.05 17.88
6 Pakistan 73.21 68.70 56.04 57.57 47.07
7 Sri-Lanka 42.59 23.69 26.81 23.92 30.45
Total 690.69 689.68 560.38 648.57 797.70
National Export 24301.90 27027.36 30186.62 31208.94 34257.18
% Share of SAARC 2.84 2.55 1.86 2.08 2.33
Countries

3
2. Ready Made Garments (RMG) Export Analysis:

Serial Export Value

Country Commodity
No 2013-2014 (US$) 2014-2015 (US$) 2015-2016 (US$)
1 Afghanistan Garment - 41725 79405

2 Bhutan Garment 447365 743466 851843

3 India Garment 22871172 23029377 34594663

4 Sri Lanka Garment 1987763 1634115 2332917

5 Maldives Garment 82899 44874 364109

6 Nepal Garment 241052 258620 465671

7 Pakistan Garment 481700 518414 1252728

Total 26111951 26270591 39941336

Garments industry is responsible for 80% of the export value of Bangladesh. They are the key to
our earnings in foreign currency. Although more than 60% of the exports are done with European
and North American countries, Bangladesh still supplies the ready-made garments to the South
Asian countries as well. From the above table it can be seen that the value of export has increased
exponentially over the years with India being the number 1 importer of garments from Bangladesh
among the other South Asian countries. The reason for the increased value can be for the
following reasons:

Strong government support to the entrepreneurs– it has been seen distinctively in recent times
that the government is extending all sort of necessary supports to the industry owners. Some of
those supports could be mentioned as a tax cut, continuing incentives, depreciating taka against
USD, more and more apparel businessmen in the government etc.

Huge private sector investments: despite turmoil in the banking sector, it has been seen that
unprecedented amount of investment went to the textile and apparel sector of Bangladesh. Most
of the renowned apparel makers are increasing their capacities very rapidly.

Getting more close to the growth markets: A trend has been visible in recent times that,
Bangladeshi manufacturers once getting bigger they have achieved the capacity to invest in their
own marketing and so they are going closer to the markets and bringing more orders to them.

Safety reputation: Because of the strong intervention of Accord and Alliance, Bangladesh has
achieved a strong reputation on workers’ safety. Now the country is one of the safest apparel
making countries in the world.

Huge capacity, easier control on the supply chain: Bangladeshi companies have built unbelievable
vertical capacity which is unique to China. Brands those who want to make their supply chain
more transparent, they are shifting more orders to Bangladesh as if controlling the supply chain is
easier here.
4
A huge crowd of global brands: Any global retail brand selling apparel now considers Bangladesh
if they want to open second overseas sourcing office after China. In Bangladesh, they get experts
and suppliers to run their operations.

Technology adoption, qualitative transformation: The country in recent times has adopted most
sophisticated technologies for textile and apparel manufacturing. The achievement rate of quality
and technical compliance is very high in Bangladesh.

Power & gas supply is getting better: Even though the cost is increasing, the government now in
the position to make the sure uninterrupted supply of power and gas to the industries.

Human capital transformation: It is not only a slogan now. Even though the quality of education is
still a question, but the country is producing a huge number of graduates every year in the area of
textile and apparel. Such big influx of educated and trained youth is making the sector capable of
taking any challenge forward. There has been a strong growth in professional level training as well.

5
3. Agricultural Products Export Analysis:

Export Value
Serial
Country Commodity 2013-2014 2014-2015 2015-2016
No
(US$) (US$) (US$)
1 Afghanistan Agricultural Products 153,069 198,233 221,000

2 Bhutan Agricultural Products 532,733 1,548,767 1,268,691

3 India Agricultural Products 14,685,469 20,753,797 33,778,070

4 Sri Lanka Agricultural Products 1,010,552 699,734 2,996,109

5 Maldives Agricultural Products 548,907 671,855 829,897

6 Nepal Agricultural Products 2,653,805 12,652,925 4,112,954

7 Pakistan Agricultural Products 1,010,552 699,734 299,619

Total 20,595,087 37,225,045 40,809,850

Commodity Composition of Agricultural Products Industry:

1 Rice 17 Buckwheat, millet and canary seed

2 Maize (corn) 18 Cereal grouts, meal and pellets
3 Fresh vegetables 19 Cereal grain, worked post hulling, excluding
rice
4 Frozen vegetables 20 Flour, meal and flakes of potatoes
5 Provisionally preserved vegetables 21 Shelled Dried vegetables
6 Dried vegetables 22 Ground-nuts
7 Sugar 23 Oil seeds
8 Meat & meat products 24 Seeds, fruit and spores for sowing
9 Almonds, cashew nuts & coconuts 25 Medicinal plants
10 Other Nuts 26 Natural gums, resins, gum-resins & balsams
11 Dates, pineapples, mangoes, avocadoes, 27 Vegetable material for plaiting
guavas
12 Dried fruit 28 Cucumbers, gherkins and onions
13 Pepper, peppers and capsicum 29 Jams, fruit jellies & marmalades
14 Seeds of anise, badian, fennel, 30 Fruit & vegetable juices
coriander, cumin, etc.
15 Ginger, saffron, turmeric, thyme, bay 31 Natural honey
leaves & curry
16 Foliage & branches 32 Flour, meal and flakes of potatoes

6
Bangladesh export earnings from Agricultural food reached to US$553 million in 2015-2016
which is only 1.59% of total export basket. Contribution of agriculture to county’s GDP is
14.75% and it employs 40.6% (around 24.5 million people) of the total employment. In
attaining the $1 billion target by 2021 and to increase market share in the global export
market, GAP and other standards need to be strictly maintained. Bangladesh, post-harvest
loss is too high of around 20% of total production of vegetables and fruits because of a lack
in processing, storage and packaging facilities.

India:
Bangladesh is one of the largest export markets for Indian trade. In 2015-2016, Bangladesh Export
to India was 689.622 million US$ and Bangladesh Import from India was 5452.9 Million US$ consist
a bilateral trade ratio of 1:8. The trade ratio is improving year by year for the favor of Bangladesh.
That means export from Bangladesh has been increased. Agricultural Products total export was
around 82 Million US$ in 2015-2016, which is the largest export to India after RMG.

Commodities that increase the export from 2013-2014 2014-2015 2015-2016

Bangladesh (US$) (US$) (US$)
Natural honey 106,953.45 555,508.59 358,686.67
Foliage, branches etc 14,097.84 37,155.82 66,826.46
Provisionally preserved vegetables 0 140,859.22 18,971.29
Seeds of anise, badian, fennel, coriander, cumin 133,168.05 510,946.54 502,764.51
Ginger, saffron, turmeric, thyme, bay leaves 9,004.63 36,979.85 107,794.81
Flour, meal and flakes of potatoes 0 922,965.62 567,422.40
Vegetable products 15,463.31 128,478.62 103,349.84
Fixed vegetable fats &oils 8,499,786.1 7,545,994.4 21,274,710

Commodities that Decrease the export from 2013-2014 2014-2015 2015-2016

Bangladesh (US$) (US$) (US$)
Frozen vegetables 12,104.99 0 0
Almond, cashew nuts & coconuts 107,409.05 238,184.52 111,584.67
Other Nuts 60,596,705.9 37,399,360.4 18,130,952.12

Pakistan:
Bangladesh export around 47 million US$ to Pakistan. Among them agricultural products plays a
vital role of around 3.781 million US$ which is the second highest export commodity to Pakistan.
But recent trend shows a downward export of Agricultural products to Pakistan. Agriculture
through improved productivity strategy makes Pakistan more capable to import less agricultural
products from abroad.

Nepal:
The year 2014 & 2015 was the Detrimental economic year for Nepal. Snowstorm disaster,
landslides and earthquake brings great loss for Napal. In this period, Bangladesh export huge
potato and vegetables to Nepal and earn around 6 million US $ on Agricultural Products.
Bangladesh export around 25.052 million US$ to Nepal which is almost double the amount of
previous year (13.68 million US$).

7
Sri Lanka:
Export to Sri Lanka was low in 2015 due to the Parliamentary election period on Sri Lanka. On that
span of time, Bangladesh was unable to earn the expected export income from commodities such
as Potatoes, Ginger, saffron, turmeric, thyme, bay leaves, curry, Cereal grouts, meal and pellets.
Bangladesh export around 1.12 million US$ to Sri Lanka on 2015-2016.

Bhutan, Maldives & Afghanistan:

Trade flows remain consistent and positive for the period of 2014 to 2017 between Bangladesh
and Bhutan, Maldives & Afghanistan. Bangladesh export around 2.153, 1.815 & 0.221 million US$
of agricultural products to Bhutan, Maldives & Afghanistan.

Some reason behind trade variation in Agricultural Products:

 High local & International Demand

 Quality & reasonable price
 Non-tariff barriers in exporting goods to South Asian nations
 Natural calamities outside Bangladesh
 High post-harvest damage
 Advance global safety standard
 Food safety and packaging are still impediment

8
4. Leather & Leather Products Export Analysis:
The leather industry has been developing on a large scale since the 1970s and is currently worth
around $1.16 billion with 40% of the total demand being met from imports. Currently there are
165 footwear and leather factories in Bangladesh with an additional 161 tanneries that process
the raw hide to finished leather. Investments have been on the rise with a focus on factories that
meet environmental compliance laws and produce high quality goods. The leather industry
products include leather-based garments, shoes, belts, bags, jackets, suitcases, wallets and other
items with footwear at the forefront of the market. Around 85% of leather and leather products
exported are in the form of crushed leather, blue wet leather, finished leather, leather garments,
and footwear. Key export destinations are the EU, USA, Australia, Japan, Singapore, and South
Korea.

Export Value
Serial
Country Commodity 2013-2014 2014-2015 2015-2016
No
(US$) (US$) (US$)
Leather & Leather
1 Afghanistan - - -
Products
Leather & Leather
2 Bhutan 26,000 34,743 49,000
Products
Leather & Leather
3 India 11,859,432 19,681,079 20,055,220
Products
Leather & Leather
4 Sri Lanka 4,096 208,667 20,105
Products
Leather & Leather
5 Maldives 546 902 2,000
Products
Leather & Leather
6 Nepal 1,069 1,202 2,019
Products
Leather & Leather
7 Pakistan 399,305 73,668 743,855
Products

Commodity Composition of Leather & Leather Product Industry:

1 Raw hides & skins

2 Leather of (cow) bovine/equine animal
3 Goat/kid skin leather
4 Leather of other animals
5 Leather further prepared after tanning or crusting/parchment-dressed leather
6 Trunks, suit-cases, camera cases, handbags of leather
7 Articles of apparel & clothing access of leather or composition leather
8 Articles of leather or composition leather
9 Footwear, upper of leather
10 Finishing agents, dye carriers or fixing for leather

9
India:

Leather Commodities Export to India 2013-2014 2014-2015 2015-2016

(US$) (US$) (US$)
Raw hides & skins 569,414.24 535,902.09 398,209.57

Leather of (cow) bovine/equine animal 5,204,675.16 8,455,351.72 8,578,341.37

Goat/kid skin leather 267,083.41 415,959.70 126,938.62

Leather of other animals 4,331,352.67 5,061,590.27 4,910,203.22

Leather further prepared after tanning or 11,453.50 - 24725.36

crusting/parchment-dressed leather
Trunks, suit-cases, camera cases, handbags of 1,034,159.20 4,771,194.89 5,836,354.44
leather

Articles of apparel & clothing access of 132,340.10 297,413.11 -

leather or composition leather

Footwear, upper of leather 308,953.48 143,667.19 180,447.32

Total 11,859,431.76 19,681,078.97 20,055,219.90

 In 2014-2015, Bangladesh Increase the export of cow, goat & other skin; Trunks, suit-cases,
camera cases, handbags etc. of leather.

Pakistan:
 In 2014-2015, Goat/kid skin leather lost market around 300000 US$.

Sri Lanka:
 2014-2015, Bangladesh exports cow leather skin for the first time.

Some reason behind trade variation in Leather & Leather Product Industry:

 General Election of Bangladesh held on January, 2015.

 Instability arises from shifting of leather industry from Hazaribag to Savar.
 Number of Non-compliant factories.
 Sri Lanka and Bangladesh have discussed signing a free trade agreement between the two
countries in 2014-2015.

10
5. Iron & Steel Import Analysis:
Export Value
2018-2017 2017-2016 2016-2015 2015-2014 2014-2013
Country Commodity (US$) (US$) (US$) (US$) (US$)
Iron and steel
Bhutan materials 6251 - - - -
Iron and steel 11249874 8465050
India martials 5286896 4172156 3883107
Iron and steel 7077 7130
Sri Lanka materials 28051 4389 2580
Iron and steel
Maldives martials 401 - - - -
Iron and steel 941
Pakistan martials - 101 - -

Bangladesh is one of Asia's leading emerging steel markets and has a growing need for raw
materials and steelmaking technologies. Steel is a basic raw material for infrastructural
development and multiple other uses. The demand for steel will inevitably grow in line with the
country's economic and infrastructural development. Major buyers of mild steel and re-rolled
products include individuals, government and institutional buyers in the real estate sector.
Implementation of the government’s huge infrastructural development plans has been driving the
double digit growth rate in the country’s steel industry and the growth is expected to persist for
the next two decades. The local manufactures believe the steel industry should continue to grow
at 10% in the next few years, riding on government programs centering its vision 2021. Currently,
in Bangladesh, there are more than 400 steel, re-rolling and auto-re-rolling mills. However, most
of the millers produce steel through conventional process of re-rolling ship cutting plates.
According to the leading manufactures, more than 4.0 million MT steels are currently produce in
the country representing a market value of BDT300 billion roughly. The industry grew from
producing a merge 47,000 MT in 1971 to 4.0 million MT in 2015.The production of this sector is
expected to be double on in 2022 by the industrialists. The country’s demand for only “branded”
MS rod is estimated at more than 2.5 million MT, where the country usually consumes over 1.7
million MT of branded MS road or 70% of its annual demand in the peak season.

Bangladesh is heavily reliant on imports of semi-finished and finished steel products as well as flat
products while being strategically positioned next to the top two steel producers in the world,
China and India. The majority of imports are scraps, flat products, and semi-finished and finished
steel products.The business mainly relies on importing billet, the main raw material required for
production. Although the local market is capable of meeting over 90% of demand for billets, a
considerable amount of imports are still required due to the majority of production is used as a
backward linkage for producer’s own re-rolling mills. Bangladesh imports mostly semi-finished
steel products including billets to serve the demand for re-rolling millers. Billet imports to
Bangladesh surged in last few years due to cheaper offers from Chinese supplies but this is likely
to decline in the coming years due to capacity enhancement by local industry players and the
imposition of customs duty & Value Added Tax (VAT) on billet import

11
 Import Volume

2017-2018 2017-2016 2016-2015 2015-2014 2014-2013

Country Commodity ( 000 Metric Ton ) ( 000 Metric Ton ) ( 000 Metric Ton ) ( 000 Metric Ton ) ( 000 Metric Ton )
Iron Scrap
India 4025 2011 946 459 279

Although the country's steel sector remains mostly focused on domestic demand, owing to
overcapacity and incessant investment by the market leaders, the country has the potential to
export steel, especially to the northeastern states of India. However, the opportunity has been
destroyed as the state governments of India have recently imposed 13% duty tax on the imported
rod and related products. Moreover, transit will enable to Indian’s state near to Bangladesh
border side, to transport steel related products from one state to another state at low cost. Hence,
the transit facility also ruined the company opportunity to export from Bangladesh.

As the country is getting enriched in terms of billet production capacity, the government has
imposed various safe guard duties in terms of import duty, VAT, SD& RD on purchase of finished
and semi-finished steel from foreign sources. Bangladesh steelmakers are preferring imported
scrap over billet due to differential duty structure. Scrap attracts an import duty of BDT 1,500 /MT.
Whereas, RD of 20.0% and VAT of 15.0% has been imposed on import of billet from the existing SD
of BDT 7,000 on per MT imported billet. Moreover 45% SD has been imposed on bars and rods,
hot rolled, cold rolled of iron or non-alloy of steel.

12
6. Machinery and Equipment Import Analysis:

Import Value
2013 2015 2016
Country Commodity (US$ In Million) (US$ In Million) (US$ In Million)
Afghanistan Machinery & equipment 0.024 - 1.122
Bhutan Machinery & equipment - 0.00051 0.027
India Machinery & equipment 379.7 576.6 171.3
Sri Lanka Machinery & equipment 7.746 4.086 1.415
Maldives Machinery & equipment - 0.00006 0.056
Nepal Machinery & equipment - 0.00006 0.012
Pakistan Machinery & equipment 10.8 12.9 6.5

Bangladesh has not been able to get a grip on its trade and economic targets in 2015. One of the
key economic indicators was at a tolerable level throughout the year. On a point-to-point basis,
inflation came down to 6.05 percent in November from 6.19 percent in October. We can see a
significant amount of decrease in import from India in 2016. Even from Pakistan, the import has
been cut to 50% in 2016. Political unrest, largely stemming from local or national elections, has at
times shut down business operations and impacted supply chains. Increasing security challenges
have hampered at least some investment and trade opportunities. Bangladesh saw its biggest
terrorist attack in July 2016 (claimed by Islamic State of Iraq and al-Sham - ISIS) at the Holey
Artisan restaurant in Dhaka, where twenty people – mostly foreigners – were killed. Prior to July
2016, several incidents of foreigners and bloggers being targeted by ISIS and Al-Qaeda took place.
The government and law enforcement forces have taken many security measures and conducted
raids to restrain militant groups operating in Bangladesh. Although extremist attacks are now a
concern for the country, projections of continued GDP growth of approximately 6.7 percent
(World Bank) show the resilience of Bangladesh’s economy in weathering these challenges. The
lower import of capital machinery import is a concern for the experts because Bangladesh is
depending on such modern equipment for its industrial production. The persistent fall in capital
machinery import indicated that the expansion of the private sector. The slower growth in the
private sector is impeding for generating more employment in the country. Bangladesh needs to
ensure zero unemployment by to be a develop country by 2030, according Global Economist
Forum (GEF) which was disclosed recently.

The sluggish growth in the private sector also put a negative impact on industrial production.
Bangladesh needs higher industrial sector to become a mid-level status country by 2030.
The import of capital machinery declined due to poor private sector credit growth putting negative
impact on the industrialization in Bangladesh. According to economists, the fall in capital
machinery import is a bad sign for country’s economy. Bangladesh is mainly dependent on
imported capital machinery and industrial raw material for industrial production. But this fall of
capital machinery import payment indicating industrial sector weakness.

13
7. Chemicals Import Analysis:

Import Value
2013 2015 2016
Country Commodity (US$ In Million) (US$ In Million) (US$ In Million)
Afghanistan Product of the Chemicals - 0.951 0.364
Bhutan Product of the Chemicals - 0.394 0.397
India Product of the Chemicals 455.7 576.6 174.9
Sri Lanka Product of the Chemicals 7.11 11.54 9.116
Maldives Product of the Chemicals - 0.02 0.103
Nepal Product of the Chemicals 0.061 0.005 0.009
Pakistan Product of the Chemicals 8.004 10.4 10.6

Chemicals are considered intermediate goods as these are used in different industries as inputs for
the production of other goods including final products. Chemicals are necessary for making paint
as well as cosmetics and home care products, he said, adding that a portion of the domestic
requirement was met by some local chemical industries. Appliance and foam industries are also
relatively big consumers of chemicals. There is no industry where chemical is not required. It is
required in almost every industry beginning from making bread, chocolate, paper, electronics to
crop and fish farming. Export-oriented mills import chemicals under the bonded warehouse
privilege and chemicals needed for textile factories. Apart from importing chemicals from India,
Bangladesh has been consistently increasing chemical import from other SAARC countries. Textile
chemical import has been increasing at a faster rate due to use of local fabrics by the garment
exporters. Local textile millers use a lot of hydrogen peroxide as a bleaching agent to whiten the
fabrics and so textile chemical sales in local markets has been increasing by nearly 25 percent
year-on-year as export of apparel items has been increasing. Also another reason for this increase
is the industries that are making perfumes, dyeing a variety of substances for printing purposes
and using colors in textile and fabrics. In RMG industry required 38% chemical, leather 19%, plastic
5%, textile 20%, food & beverage 6% and others 12%. So we can understand the use of chemicals
is increasing day by day. In food & beverage sector we have to depend on India, China, German
and Italy. So, the availability of these chemicals is much essential for the production. As production
will increase it will make our GDP constant.

14
8. Textiles and Clothing Import Analysis:

Serial Import Value

Country Commodity
No 2013-2014 (US$) 2014-2015 (US$) 2015-2016 (US$)
1 India Textiles 956.45 1327.11 1468.0

2 Sri Lanka Textiles 11.697 15.065 19.227

3 Maldives Textiles 0.56 0.89 0.103

4 Pakistan Textiles 355.69 390.45 418.3

The textile industry is the industry which involves the sections like research, design, development,
manufacturing and distribution of textiles, fabrics and clothing. The country imported a substantial
volume of raw materials, especially raw cotton, cotton yarn, woven fabrics and synthetic fibers,
last year to feed local textile and ready-made garment (RMG) industries. Import of key raw
materials had increased by about 5-10 per cent last year despite a comparatively slow growth rate
in RMG export.

According to Bangladesh Textile Mills Association (BTMA), the country imported about 1.32 million
tonnes (6.1 million bales) of raw cotton in 2015, up by 10 per cent from 1.20 million tons (5.5
million bales) last year. At present, local textile mills meet 90 per cent of the demand for raw
materials for knitwear sub-sector of the apparel industry and 40 per cent for woven sub-sector.

Bangladesh's overall imports grew by 14.75 percent in the first four months of the current FY
2016-17, where 83 percent increase in import of capital machinery is significant. It could be said
that the growth in import is mainly due to higher import of capital machinery and industrial raw
materials, according to Bangladesh Bank. International trade in textiles and clothing has changed
substantially since 1980.

15
Below chart we can see Import from South Asia Country for textile raw material is increasing day
by day. The country imports more than 95 per cent of cotton to feed the industries, as the
domestic production can hardly meet 3-5 per cent of the country's total demand. Last year, it
produced about 1,45,000 bales of cotton. So we need to import from different country. From India
we import more cotton, because of geographical ad economic facilities. We import about 49%
cotton from India.

The components are listed below.

1. Natural and synthetic fibres

2. Yarn

3. Grey fabrics

4. Finished fabrics

5. Garments and other made-up products

6. Textile machinery and parts

7. Chemicals for textiles

16
9. Refined petroleum Import Analysis:
In 2017, Bangladesh exported $39.2B and imported $44B, resulting in a negative trade balance of
$4.73B. In 2017 the GDP of Bangladesh was $249B and its GDP per capita was $3.87k, making it
the 53rd largest importer in the world. During the last five years the imports of Bangladesh have
increased at an annualized rate of 9.5%, from $27.9B in 2012 to $44B in 2017. The most recent
imports are led by Refined Petroleum which represents 5.97% of the total imports of Bangladesh
and among foodstuffs wheat and raw sugar are highly imported which accounts Wheat ($1.23B)
and Raw Sugar ($1.11B) approximately.

Refined Petroleum:

Import Value
Country Commodity 2015 (US$) 2016 (US$) 2017 (US$)
India Refined petroleum 70000000 78900000 303000000
Sri Lanka Refined petroleum 4040000 5690000 14400000
Pakistan Refined petroleum 41600000 1510000 11800000

In 2015, Bangladesh imported $1.25 billion petroleum and the imports were made from few south
Asian countries.

 India: $70M this accounts 5.6% of total import.

 Sri Lanka: $4.04M this accounts 0.32% of total import.
 Pakistan: $41.6M this accounts 0.0033% of total import.

In 2016 the total import was $1.82 billion and the import of petroleum was made in such ways:

 India: 78.9m this accounts 4.3% of total import.

 Sri Lanka: 5.69m this accounts 0.31% of total import
 Pakistan: 1.51m this accounts 0.083% of total import

In 2017 the total import was $2.62 billion and the import of petroleum was made in such ways:

 India: $303M this accounts 12% of total import.

 Sri Lanka: $14.4M this accounts 0.55% of total import
 Pakistan: $11.8M 0.00045%% of total import

17
10. Food Stuff Import Analysis:
India imports Wheat in Bangladesh which is the maximum import of the total foodstuffs. In 2015
the total import was $1.25 billion and the import of Wheat was $901M and Bangladesh imported
90 m from India which accounts 10% of total import. In 2016 the total wheat imported was 3.51 m
which was 0.54% of total import of wheat and it ultimately reduced to 0 in 2017 from India.

Import of raw sugar in 2015 from India was 24.1 m and the total import of raw sugar was 791m
which was 3% of total import. In 2016 the total import was $ 674m and 0.29% was imported from
India which was around 1.95 million. In 2017, the total import from India was 22m which was 2%
of the total import which is $1.11b.

Import
Country category Commodity Import Value
2015 2017
(US$) 2016 (US$) (US$)
Wheat 90400000 3510000 -
India Foodstuff Raw sugar 24100000 1950000 22000000
Afghanista Mate 408000 133000 -
n Foodstuff Spice 211000 - -
Vegetable and prepared
Bhutan Foodstuff foodstuff - 13009000 -
Sri Lanka Foodstuff Spices 548000 1850000 3330000
Animal meal and pellet 155000 241000 -
Maldives Foodstuff
Processed fish 43700 -
Nepal Foodstuff Dried legumes 6570000 - 8560000
2400000
Rice m 1560000 11600000
3220000
Pakistan Foodstuff
Onion m - 165000
2060000
Vegetable m 168000 212000

Bangladesh has imported other foodstuff commodities from South Asian countries but wheat and
raw sugar was only imported from India. The import values of maximum foodstuffs from other
South Asian countries are as such:

1. Afghanistan: Majority of the mate and spices are imported from Afghanistan to Bangladesh. In
2015 the total import from Afghanistan was $619000 out of which mate was imported 66%
which accounts $408000 of the total and 34% spice which was around $211000 of the total. In
2017, only mate was imported among foodstuff which accounts $133000 of the total import i.e
$177000 and it was 75% of the total imports from Afghanistan.
2. Bhutan: Bhutan imported $1309000 vegetable and prepared foodstuff in Bangladesh.

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3. Maldives: Maldives exported only animal meal and pellet to Bangladesh worth of $155000 in
2015 which was 100% of the total foodstuff import. In 2016, it exported was $285000
foodstuffs to Bangladesh and among which 85% was animal meal and pellet ($241000) and
processed fish which was 15% of the total ($43700)
4. Nepal: In 2015, Bangladesh imported only dried legumes from Nepal which was $6570000 of
the total $6830000 imports and it was around 96% of the total. In 2017, Bangladesh imported
$77000000 dried legumes of the total foodstuff import $8560000 which is 88% of the total.
5. Pakistan:
 In 2015 Bangladesh imported majority of rise, onion and vegetable from Pakistan and it worth
1.09% of total imports ie $7010000.
 In 2016 majority import from Pakistan was rise and vegetable which worth 0.266% of the total
imports $6560000.
 In 2017 Bangladesh imported rice, vegetable, and onion which worth 1.859% of the total
imports ie $6360000.

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11. Cement Import Analysis:

Import Value
Serial
Country Commodity 2013-2014 2014-2015 2015-2016
No
(US$ in Million) (US$ in Million) (US$ in Million)
1 Afghanistan Cement 0.06 0.0334 0.194

2 Bhutan Cement 8.746 11.154 7.114

3 India Cement 140.724 135.80 123.5

4 Sri Lanka Cement 0.06216 0.0405 0.043

5 Maldives Cement - - -

6 Nepal Cement 0.018 0.010 0.008

7 Pakistan Cement - - -

Total 149.61 147.03 130.86

For the production of cement, two types of materials are necessary: one rich in calcium or
calcareous materials such as limestone, chalk, etc. and another that is rich in silica or argillaceous
materials such as clay, which are extracted from quarry. Limestone is the primary raw-
materials for producing cement clinker. There are also various other raw materials used for
cement manufacturing (i.e. fly ash, slag, gypsum, mill scale and bauxite). Bangladesh is import
dependent and it is one of the largest importers of clinkers globally. Of the 32 cement producers
that are currently in operation, only two have clinker production facility at their own plants. One is
Chhatak Cement Factory Ltd, a government owned company, with limited production capacity and
another is Lafarge Surma Cement Ltd.

The major cement manufacturers are importing the required raw materials including clinker,
gypsum, fly ash and iron slag from abroad and using grinding technology to produce cement. At
present, several local cement manufacturers procure clinker from Lafarge while most of the
manufacturers import clinker from China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia,
Philippines, Singapore, Thailand and Vietnam. Lafarge Surma Cement Ltd produces approximately
10% of total clinker required for Bangladesh. Some manufacturers also use local limestone
collected from Sylhet. Majority portion of imported fly ash is sourced from India; slag is imported
from China, India, Japan and Singapore while Gypsum is sourced from China, India, Indonesia and
Japan. The prime raw material of cement, clinker, is currently 80.0% imported. Bangladesh has a
scarcity of mineral resources, such as limestone, and hence, is not capable enough to meet the
demand for clinker. Clinker import has been raised quite significantly for Bangladesh. Meanwhile
in the last two fiscal years (2014-15 and 2015-16) the payment for clinker import in terms of USD
has dropped due to the price fall of clinker in the global market. Bangladesh imports an estimated
10 million MT to 15 million MT of Clinker and Limestone from different South-East Asian countries
annually. Bangladesh mostly relied on imported clinker in FY 2015 and also remained as the largest
importer of clinker. Global clinker price downward trend has enabled the cement manufacturing
companies tackle their cost of goods sold quite satisfactorily. Clinker Price per MT stood at on an
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average BDT 5,383 in the year 2012 which has fallen down to BDT 4,249 in the year 2016. In the
year 2016 the clinker price per MT has fallen down by 14.1% compared to previous year. However,
the downward trend in the global clinker price has become a threat for Lafarge-Holcim since
Lafarge Surma supplies clinker to other cement manufacturing companies. Except Lafarge Surma,
other cement manufacturing companies can capitalize the advantage to cushion the price fall of
cement.

12. Conclusion
Bangladesh’s trade with South Asia has been on the rise since the early 2000s and about 17.3% of
total trade currently takes place with these regions. In 2016, South Asian share in Bangladesh’s
total global export is 2.33% and South Asian share in Bangladesh’s total global Import was 20.4 %.
Bilateral economic trade and cooperation between Bangladesh with South Asian Region has
trended to remain at low level considering the potentiality of Bangladesh. However, ready-made
garments (RMG) dominates exports accounting for over 80% of the annual export receipts and
over 45% of gross value added in manufacturing. The operation of the South Asian Free Trade
Area (SAFTA) since 2006 and duty-free market access for most products in the Indian markets
since 2011 have created potential opportunities for higher trade with South Asia, particularly with
India. Bangladesh’s geographical location between two major regions of Asia—South Asia and
Southeast Asia—provides a unique opportunity for the country to benefit from greater cross-
border movement of goods and services, investment flows, and enhanced human contact. Product
& market Diversification will be key to achieving strong growth over the long-term for Bangladesh
economy.

13. Data Collection Sources

 Export Promotion Bureau of Bangladesh Government of the People's Republic of Bangladesh
(http://www.epb.gov.bd/)
 Bangladesh Bank (https://www.bb.org.bd/)
 Metropolitan Chamber of Commerce and Industry ( http://www.mccibd.org/index.php)
 Dhaka Chamber of Commerce & Industry (https://www.dhakachamber.com/about/contact)

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