A new agreement is to be concluded with India to increase two-way investment and trade. The Ministry of Commerce has already sent a letter to Delhi informing of Bangladesh’s interest. The Ministry of Commerce estimates that if this agreement named Comprehensive Economic Partnership Agreement (CEPA) is signed, trade between the two countries will increase several times.
According to sources at the Ministry of Commerce, a letter was sent to New Delhi in this regard by the Ministry of Commerce at the end of last September. Dhaka is now waiting for Delhi’s response. Further action will be taken after receipt of the response to the letter. The government believes that Bangladesh’s trade with India will increase if there is a preferential trade and investment agreement. In this regard, said an official from the Ministry of Commerce, the internal process has started to start negotiations on the Integrated Economic Partnership Agreement.
Several meetings are scheduled this month to implement CEPA. In this regard, the Principal Secretary of the Ministry of Commerce, Tapan Kanti Ghosh, said that apart from the inter-ministerial meeting, the Ministry of Commerce will also hold a meeting with various trader organizations. He said that in their joint statement announced by the Prime Ministers of India and Bangladesh in New Delhi last September, they called on relevant officials to start discussions. However, no letter has yet arrived from New Delhi in this regard. Negotiations on the agreement will begin in December this year.
A Commerce Ministry official said, “This is a big deal. Bangladesh has not entered into any such agreement in the past. The two sides will now form advisory councils and sectoral sub-committees made up of officials and experts to push the issue forward. The CEPA agreement may take several years to complete.
CEPA is seen as an upgraded version of the Free Trade Agreement (FTA), stakeholders said. India has already signed several such trade agreements with a number of countries, including South Korea and the United Arab Emirates. The two South Asian countries first discussed the prospect of a CEPA at a trade secretary-level meeting in 2018 to boost bilateral trade and enhance overall cooperation. Later that year, trade ministers from both countries agreed to conduct a joint feasibility study on the matter.
Later, India’s Regional Trade Center and Bangladesh Foreign Trade Institute jointly conducted a feasibility study and submitted a report to their respective Ministry of Commerce. After reviewing the joint investigation report, the Ministry of Commerce said the CEPA could be signed with India to retain the benefits Bangladesh enjoys under the South Asia Regional Free Trade Agreement. South (SAFTA) after the transition from LDC status. CEPA aims to resolve trade complications, tariffs, government procurement, investment, mergers, and investment protection, among others. It is also a large-scale initiative to remove various complications in promoting Bangladesh as a developing country.
If the CEPA is properly established, the importer-exporter of both countries will be able to choose the agreement according to its suitability for the conduct of business activities. Currently, the South Asian Regional Free Trade Agreement (SAFTA) is operational among SAARC countries. Although both Bangladesh and India are members of the Asia-Pacific Trade Agreement (APTA), traders prefer SAFTA. Because its advantages are more. As a least-developed country, Bangladesh enjoys duty-free exports to India except for 25 products that fall under the category of alcoholic and non-alcoholic beverages (allowed under SAFTA). Bangladesh will lose these benefits from India after 2026 when it is upgraded to developing country status.
According to data from the Export Promotion Board (EPB), Bangladesh has achieved promising results in exporting goods to India in the financial year 2021-2022; It broke all previous records and reached the milestone of $200 billion in product exports, 81% more than the previous year. In the same fiscal year, Bangladesh imported goods worth $1,616 million from India.