Bangladesh Prime Minister Sheikh Hasina has given the green signal to begin formal negotiations for signing a comprehensive economic partnership agreement (CEPA) with India in what can also boost trade and investments in eastern and north-eastern India in a big way.
This will be Dhaka’s first trade pact with any country, and it has given preference to India despite requests from China and Japan to have free-trade agreements, ET has learnt. Pacts with Japan and China are still at an assessment stage.
The CEPA will cover trade in goods and services, investment, intellectual property rights and ecommerce.
In the last fiscal year, Bangladesh's exports to India rose to nearly $2 billion for the first time. Imports from India totalled $14 billion.
Officials from Dhaka said Bangladesh already enjoyed duty-free and quota-free benefits for the exports of all but 25 products, including tobacco and alcohol, to India, as a least developed country under the South Asian Free Trade Area agreement.
During the visit of PM Narendra Modi to Bangladesh in March 2021, he and Hasina issued instructions on concluding the joint feasibility study relating to the signing of the CEPA.
Accordingly, Bangladesh's Foreign Trade Institute and India's Centre for Regional Trade conducted the detailed joint feasibility study. In May this year, they sent the study report to their respective commerce ministries. The report suggested launching negotiations for the signing of the CEPA.
It will also open new investment windows for both countries, the study claimed.
"It may be concluded that the estimates and analysis of this study indicate that the proposed CEPA between India and Bangladesh is not only feasible but also mutually beneficial in terms of possible gains in the realms of trade in goods and services, and investment," according to the study.
Bangladesh is India’s biggest trade partner in South Asia, and India is the second biggest trade partner of Bangladesh.
Source: The Economic Times