India’s investment in Bangladesh is low compared to trade

India’s trade in Bangladesh is not increasing at the rate of investment. A review of foreign direct investment (FDI) data shows that India’s investment status in Bangladesh was $760 million in March last year. At the end of last year, that was 68 million dollars. But last year about 1 thousand USD 4 billion worth of goods was imported from India to Bangladesh.

Prime Minister Sheikh Hasina called on the country’s businessmen to invest in Bangladesh during her visit to India. He made this appeal during a meeting organized by CII of Indian businessmen. Prior to this meeting, the Prime Minister had a bilateral meeting with Gautam Adani, chairman of the Adani Group, one of India’s business groups.

Meanwhile, Indian Prime Minister Narendra Modi said in his speech that negotiations on the ‘Comprehensive Economic Partnership Agreement or CEPA’ agreement to strengthen Bangladesh’s trade and investment with India will begin soon. This agreement is expected to increase trade between the two countries and boost Indian investment in Bangladesh. Three economic zones are being set up for Indian investors in Mirsrai, Mongla and Kushtia in Bangladesh.

According to Bangladesh Bank data, India’s investment position in Bangladesh ranks 10th in terms of rural foreign direct investment. Since March last year, India’s largest investment has come in at $204.3 million in the banking sector. Then came $185.8 million in the electricity sector. And the investment in the textile sector is 15 million USD 53 million. Apart from this, India has investments in gas and petroleum, food, commerce, chemicals and pharmaceuticals, construction, leather and leather products, agriculture and fisheries and insurance. But India’s trade with Bangladesh is increasing. In the latest fiscal year 2021-22, the trade volume between the two countries was $15.9 billion. That was $5.1 billion in fiscal year 2010-11.

Marico’s investment in the FMCG sector is notable in Maitri Thermal Power Plant, State Bank of India, Insurance Company LIC, Bangladesh Edible Oil Company, partly owned by Adani Group, located in Rampal in Bagerhat under the ownership of Indian company National Thermal Power Corporation (NTPC) Restricted. Apart from this, the country’s businessmen have investments in information technology, freight transport, metallurgical industry, motorcycle accessories.

Experts say Bangladesh is lagging in general when it comes to attracting foreign investment. Recently, there have been some investments in startups or the IT sector. But investments in heavy industry are not visible. One of the reasons for this is the higher operating costs and the complexity of the operations. Foreign investment will only be attracted if initiatives are taken to ensure faster service delivery and lower the cost of doing business.

The Executive Director of the private research organization Policy Research Institute (PRI). Ahsan H. Mansoor told Samakal that investment cannot be attracted only by good political relations. Overall ease of trading, cost reduction and speed of trading. It is important to speed up the release of goods in the port. Illegal activities must be stopped in other areas, including customs. There is a big market in Bangladesh. The investment potential is therefore strong. There is talk of creating an economic zone for Indian investors. But there is no progress. If you invest in this situation, it is difficult to get a response.

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