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Delhi’s duty-free offer

The New Nation, Bangladesh

Delhi’s duty-free offer

8 May 2007

Bangladesh’s business leaders are rather dismayed at India’s recent duty-free market access offer, as they have expressed the view that mere duty-free access could not ensure free flow of goods into Indian market unless non-tariff and para-tariff barriers are removed. Business leaders, according to press reports, expressed their views at a meeting organised on Sunday by the Metropolitan Chamber of Commerce and Industry. They said that India should exclude Bangladesh’s major tradable items like garment, leather and ceramic goods from the sensitive list to make its zero-duty market access offer ‘meaningful’ for the least developed countries (LDCs) in the South Asian region. The Indian prime minister announced his country’s duty-free offer to the region’s LDCs at last month’s SAARC Summit held in Delhi. The business leaders also cautioned that the duty-free offer under the multilateral framework should not be mingled with India’s offer to import eight million pieces of apparel products without tariff. The chamber meeting on ‘implementation of the offer made by the Indian government at the SAARC Summit for duty-free market access of products from the LDC sounded a note of caution laying emphasis on the importance of excluding apparel and other potential items from India’s sensitive list in any way. One trade analyst said, ‘We should not fall into the trap’ by accepting the offer of exporting eight million pieces of apparel to India.

The traders and industrialists are keen to see expert level discussion for scheduled implementation of the Indian government’s decision for duty-free market access. Bangladesh, in this regard, should ask India to withdraw all kinds of trade barriers including special duties and levies and the sub-group constituted to address the issue of non-tariff barriers should meet soon and on regular basis to resolve all pending problems. The foreign affairs adviser, who was present at the meeting as chief guest, however, said that the business community should start the process of preparing a list of Bangladesh’s export interests proposing exclusion of such items from sensitive list India prepared under the framework of South Asian Free Trade Area (SAFTA). He also reminded that mere granting duty-free access to products not covered by SAFTA sensitive list would not bring substantial benefit to the LDCs like Bangladesh.

How far India, being the bigger neighbour in the region, would be helpful in making free trade area in this region would be seen in the coming days. So far as bilateral trade with India is concerned, Bangladesh could not proceed even with the idea of having a ‘preferential trade’ under SAPTA in our region. One of the chamber leaders rightly pointed out at the meeting as reported by the press that global players were showing interest in SAARC because the such interest might have been generated by the economic growth in the region. But the unfortunate part is that the member nations are yet to overcome inhibitions like mutual distrust and suspicion that remain as main impediments in the way of improving relations.