Kamal Nath for separate FTA with Bangladesh
The Hindu, 23 March 2006
Kamal Nath for separate FTA with Bangladesh
Suggests MoU on standards between designated institutions
Amit Baruah
NEW DELHI: India is for a South Asia Free Trade Area (SAFTA) "plus’’ (a separate) free trade arrangement with Bangladesh that would address the existing trade imbalance between the two countries, Commerce Minister Kamal Nath said on Wednesday.
Addressing Indian and Bangladeshi businesspersons, Mr. Nath said Prime Minister Manmohan Singh had given clear guidelines that all non-tariff barriers to trade should be removed. "Non-tariff barriers are there not by design, but by default,’’ he said.
The Commerce Minister suggested in the presence of the Bangladeshi Prime Minister, Khaleda Zia, that a memorandum of understanding be reached on the overall issue of standards between designated institutions of the two countries, so that all non-tariff barriers could be eliminated.
Call for `political impetus’
On the issue of lopsided trade between the two countries, Mr. Nath pointed out that Bangladeshi exports to India had grown by a massive 68 per cent in 2004-05, but the trade imbalance still remained.
Stressing that Dhaka and New Delhi needed to look at their basic trade basket, the Commerce Minister stated that with the operationalisation of SAFTA and India’s initiative to address market access issues of Bangladesh’s textile and garment sector, there would be a "substantial increase’’ in exports to India.
Calling for greater "political impetus’’ to existing economic mechanisms, he pointed out that the Joint Economic Commission between the two sides had not met for the last three years. "We need to give more political impetus to these groups," he said
"We must develop a roadmap to address issues which are hindering the growth of trade between our two countries ... a clear priority is the improvement of infrastructure at various land customs stations, operationalisation of fresh land customs stations, simplification of customs procedures and improvement of [the banking] system." While suggesting a bilateral FTA with Bangladesh, Mr. Nath cited the success of the India-Sri Lanka FTA. Pointing out that Sri Lankan exports to India in 2001 were barely $45 million, the Commerce Minister said this was less than those for Bangladesh in the same year.
"By 2004, Sri Lankan exports to India had grown to $200 million. The balance of trade, which favoured India 15:1 when the FTA was signed, has come down to 4:1 at present. India has emerged as Sri Lanka’s third largest investor ... in the light of this experience ... the proposal for a India-Bangladesh FTA should gather momentum,’’ he added.
