Publication: Unlocking Bangladesh-India Trade : Emerging Potential and the Way Forward
Date
2012-08
ISSN
Published
2012-08
Author(s)
Abstract
The primary objective of this study is
to analyze the impact on Bangladesh of increased market
access in India, both within a static production structure
and also identifying dynamic gains. The study shows that
Bangladesh and India would both gain by opening up their
markets to each other. Indian investments in Bangladesh will
be very important for the latter to ramp up its exports,
including products that would broaden trade complementarity
and enhance intra-industry trade, and improve its trade
standards and trade-handling capacity. A bilateral Free
Trade Agreement would lift Bangladesh's exports to
India by 182 percent, and nearly 300 percent if transaction
costs were also reduced through improved connectivity. These
numbers, based on existing trade patterns, represent a lower
bound of the potential increase in Bangladesh's exports
arising from a Free Trade Agreement. A Free Trade Agreement
would also raise India's exports to Bangladesh.
India's provision of duty-free access for all
Bangladeshi products (already done) could increase the
latter's exports to India by 134 percent. In helping
Bangladesh's economy to grow, India would stimulate
economic activity in its own eastern and north-eastern
states. Challenges exist, however, including non-tariff
measures/barriers in both countries, excessive bureaucracy,
weak trade facilitation, and customs inefficiencies. Trade
in education and health care services offers valuable
prospects, but also suffers from market access issues. To
enable larger gains, Bangladesh-India cooperation should go
beyond goods trade and include investment, finance, services
trade, trade facilitation, and technology transfer, and be
placed within the context of regional cooperation.
Citation
“De, Prabir; Raihan, Selim; Kathuria, Sanjay. 2012. Unlocking Bangladesh-India Trade : Emerging Potential and the Way Forward. Policy Research working paper;no. 6155. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/11996 License: CC BY 3.0 IGO.”
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