Fri 6 Jun 2008
In 2004-05, Bangladesh exported goods and services worth 8.7 billion taka to India. This was double the amount exported in the previous year. But in that year, Bangladesh’s import from India amounted over 84 billion taka. This massive trade deficit is a major irritant in Indo-Bangla relationship. On any given day, one is likely to read an op-ed in the print media or hear a talking head in the electronic media arguing that India must take more action to narrow this deficit. And there is a degree of truth in these arguments. India does have significant non-tariff barriers against Bangladeshi goods and services while the Bangladeshi market is essentially open. You can’t export Bangladeshi books to Kolkata for example. Nor are Bangladeshi TV channels available across the border. But there is more to the story of our trade deficits. How often do you hear about our ‘massive trade deficit with China’, and how this is a proof that China is crippling our economy? (More at Mukti)
June 6th, 2008 at 2:32 pm
I’m all for free trade, and would be in favour of pretty much abolishing all barriers between India and BD (both for trade and non-trade reasons)
But, a devil’s advocate question:
If trade with India is so damaging, why not ban all Indian goods? Surely China and Pakistan (and maybe newly emerging homegrown industry spurred on by the demand) would gladly fill the void …
June 6th, 2008 at 6:54 pm
The long and porous borders make that impossible. Sizable populations in most of the border districts earn their livelihood by legally and illegally ferrying goods to and fro India.
Don’t get me wrong, trade with India is not being blamed here. It is the terms of the trade. We really don’t blame Indian businessmen for trying to turn a profit or capture target markets. The anguish and soul-searching is more about whether ten, twenty of fifty years down the line, the deficit will have remained the same size, expanded, or decreased.
June 7th, 2008 at 4:35 am
#1
Udayan
In response to the devil’s advocate uestion, I feel that if Bangladesh can do that, that would be great. But banning trade with a neighbouring country is not in conformity with the spirit of globalization.
Indo-Bangla trade is in fact is a win win situation. A significant life blood of east Indian economy is its trade with the massive market in Bangladesh. Bangladesh benefits from this trade as it minimizes transportation cost and time. And an improved trade in this sector may give the much needed boost to the ailing economy of the seven sisters.
A highway is being constructed at Bangladesh’s cost through Myanmar upto China and Thailand. Once that highway becomes functional Dhaka/Chittagong will really turn into a business/transportation hub for trade between east and south Asia.
June 7th, 2008 at 11:53 am
At this point, foreign remittance is the goose that lays the golden eggs. However, that too may change soon, if this report has any truth to it.
http://www.bangladeshnews.com.bd/2008/06/07/remittance-overseas-jobs-to-mark-fall-in-2-years/
If the Middle East closes the door to our workers, then amader khobor asey. It doesn’t matter a thing to the Arab countries, cos they can hire workers just as unskilled, just as cheap from India or Pakistan.
June 8th, 2008 at 1:16 am
Maybe a block on unskilled labor from Bangladesh will lead to people picking up more skills and going abroad to become nurses and oilfield technicians, as opposed to domestic help and construction workers.
It’s a natural progression: witness how India and the Phillipines have gone from providing cheap labor to skilled labor.
Maybe, just maybe, this isn’t the end of the world.