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BANGLADESH RENEWS BILATERAL INVESTMENT DEVELOPMENT WITH INDIA


During the dismal economical period around the globe, Bangladesh has taken measures to keep its country afloat. To ensure welfare of the people and progress of the economy, Bangladesh officials began talks with India, the United States, and germany in regards to bilateral investment development and protection of trade.




During the dismal economical period around the globe, Bangladesh has taken measures to keep its country afloat. To ensure welfare of the people and progress of the economy, Bangladesh officials began talks with India, the United States, and germany in regards to bilateral investment development and protection of trade.

Most recently, Bangladesh’s cabinet approved a proposal to renew the trade agreement with India for another three years. The decision was made during a special cabinet meeting held with the country’s Prime Minister Sheikh Hasina at the Bangladesh Secretariat last week.  This has been the twenty-fourth time the pact has been signed since 1980.

The Bilateral Investment Development and Protection Agreement (BIPA) allows both countries to enjoy mutually beneficial arrangements regarding the use of their water, road, and railways, for trade and commerce between India and Bangladesh. In addition, both countries benefit greatly as the agreement allows India  to better transport goods to north-eastern states, and Bangladesh to utilize India as a way to reach goods to Bhutan and Nepal.

With the BIPA signed, Bangladesh and India will consider each other as one’s most favored nation (MFN). Bangladesh has MFN status deals with 24 nations, while India has BIPA with more than 60 countries.

However, Bangladesh’s current opposing party, Bangladesh Nationalist Party (BNP), has shown angst towards the renewal, saying that, “this is merely the government’s move to give transit facility to India”. The government has stood firm by its decision and  responded opposing criticism by stating that, “this type of agreement is good, and such an agreement is necessary”. In addition, Sheikh Hasina voiced his opinion responding, “my government will not hesitate to sign any such agreement for the welfare of the country”.

The signing of the BIPA may have also been influenced by the India-Bangladesh Chamber of Commerce and Industry delegation’s (IBBCI) advice to cut Bangladesh’s trade deficit. Abdul Matlub Ahmed, president of the Dhaka-based IBCCI, said he believed a solution lay in his recommendations, saying the renewal of the BIPA with more care to transits, can increase Bangladesh exports to India allowing it to potentially reach $100 crore ($1bn) from the current $25 crore ($250m).

Talks regarding improvements and technicalities of the BIPA are set to continue. Duty and quota free access to Bangladeshi goods to India, removal of tariff barriers, maritime boundary, and border demarcation are several issues that still need to be addressed.

The Bangladesh’s  talks of new trade agreements sparked the interest of other countries as well. A senior US diplomat is expected to visit Bangladesh on February 7,  for talks on a number of issues including security and trade. Although talks would mainly be geared towards actions concerning anti-terrorism, cabinet members will also press for duty-free and quota-free access of Bangladeshi products in the US market.

Germany has also expressed interest in bilateral trade agreements with Bangladesh. In fact, Germany’s deputy foreign minister has recently made several visits to Bangladesh, as the European country seeks to expand  economic cooperation between the two nations. Trade between the two countries is increasing, with Germany currently beeing Bangladesh’s second biggest export destination after the United States. Although ready-made clothing make up the bulk of Bangladesh’s exports, the South Asian nation is hoping to expand trade with Germany in other sectors. Dhaka received a significant number of orders for shipbuilding from Germany, which imports textile machinery, chemicals and solutions for green energy among others.

Sheikh Hasina has expressed the need for economic stimulus as he is opened to signing more treaties “that will bring welfare and development for the country and its people”.

 

Source: asiaecon.org
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Source: www.asiaecon.org |


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