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India-Bangladesh Trade Potentiality an Assessment of Trade Facilitation Issues India-Bangladesh Trade Potentiality an Assessment of Trade Facilitation Issues

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India-Bangladesh Trade Potentiality an Assessment of Trade Facilitation Issues India-Bangladesh Trade Potentiality an Assessment of Trade Facilitation Issues India-Bangladesh Trade Potentiality An Assessment of Trade Facilitation Issues India-Bangladesh Trade Potentiality An Assessment of Trade Facilitation Issues Published by D-217, Bhaskar Marg, Bani Park Jaipur 302016, India Tel: +91.141.2282821, Fax: +91.141.2282485 Email: [email protected] Web site: www.cuts-international.org © CUTS International, 2014 First published: April 2014 This document has been produced by CUTS International. The views expressed here are those of CUTS International. ISBN 978-81-8257-214-0 Printed in India by MS Printer, Jaipur #1407 Contents Abbreviations ........................................................................................................................... i Note on Contributors ............................................................................................................. iii Foreword ............................................................................................................................... v Preface ............................................................................................................................. vii Executive Summary ................................................................................................................ ix 1. Introduction ....................................................................................................................... 1 Background and Context ................................................................................................... 1 Objectives and Methodology.............................................................................................. 2 Chapter Plan ...................................................................................................................... 3 2. India-Bangladesh Trade: Problems and Prospects .............................................................. 4 Patterns of Trade Flow between India and Bangladesh. ..................................................... 4 Mode of Bilateral Trade and Trade Cost: A Literature Review ....................................... 10 Impact of Bilateral Trade on Local Economies and Border Haats Models and Informal Trade Nexus .................................................................................. 13 3. Trade Facilitation Issues: A Survey .................................................................................. 16 Introduction ..................................................................................................................... 16 Regulations ...................................................................................................................... 17 Infrastructure ................................................................................................................... 17 Trade Services ..................................................................................................................21 Other Issues ..................................................................................................................... 22 Local Economy vis-a-vis Border Trade ............................................................................. 24 Case Studies on Border Haats .......................................................................................... 25 4. Conclusions and Recommendations ................................................................................. 34 Endnotes ............................................................................................................................. 43 References............................................................................................................................. 45 Annexure I: LCS Wise Snapshot ............................................................................................ 49 Annexure II: Glimpses from Border Haats ............................................................................ 55 Annexure III: Sensitive List for LDCs under SAFTA ............................................................. 57 Annexure IV: Revealed Comparative Advantage ................................................................... 59 Annexure V: Bangladesh-Political Map ................................................................................. 61 List of Tables Table 2.1: Top Products in Bilateral Trade between India and Bangladesh ........................... 5 Table 2.2: Trade between India and Bangladesh ................................................................... 6 Table 2.3: Trade Complementarity Index of India with Bangladesh ...................................... 6 Table 2.4: Revealed Symmetric Comparative Advantage Index for India’s top 15 Exports to Bangladesh ..................................................................................... 7 Table 2.5: India’s Export Intensity with Bangladesh in Top 15 Exports ................................ 8 Table 2.6: Trade Potential in Selected Product Categories .................................................... 9 Table 2.7: Summary of Results on Potential Savings from NTB Reforms for Bangladesh and India (Trade Volumes for 2010-11) ..................................... 12 Abbreviations AC: Assistant Commissioner ASEAN: Association of Southeast Asian Nations BIMST-EC: Bangladesh, India, Myanmar, Sri Lanka and Thailand Economic Cooperation BOT: Build, Operate and Transfer BSF: Border Security Force COMESA: Common Market for Eastern and Southern Africa CSOs: Civil Society Organisations CWC: Central Warehousing Corporation EDI: Electronic Data Interchange EU: European Union FOREX: Foreign Exchange ICP: Integrated Check Post LAC: Latin America and the Caribbean L/Cs Letter of Credit LCSs: Land Customs Stations LDCs: Least Developed Countries MVA: Motor Vehicle Agreement NAFTA: North American Free Trade Area NER: North Eastern Region NTBs: Non-tariff Barriers PQ: Plant Quarantine RMG: Readymade Garments RoW: Rest of the World RSCA: Revealed Symmetric Comparative Advantage India-Bangladesh Trade Potentiality: An Assessment of Trade Facilitation Issues i SAARC: South Asian Association for Regional Cooperation SAFTA: South Asian Free Trade Area SAPTA: SAARC Preferential Trading Agreement SPS: Sanitary & Phytosanitary TCI: Trade Complementarity Index UNESCAP: United Nations Economic and Social Commission for Asia and the Pacific ii India-Bangladesh Trade Potentiality: An Assessment of Trade Facilitation Issues Note on Contributors Prithviraj Nath Prithviraj holds a master’s degree in Business Management and has graduated in Economics, Political Science and Mathematics. Presently working as a Policy Analyst at CUTS, he has expertise on participatory research in the areas of sustainability, trade and energy. Joseph George Joseph has an M. Phil Degree in Applied Economics from the Jawaharlal Nehru University, New Delhi with specialisation in international trade, specifically in the area of trade in services. He has undertaken extensive studies and has published on the implications of the General Agreement on Trade in Services (GATS) for regulatory authorities governing financial services in India. Currently, he is working as a Policy Analyst at CUTS. Taramani Agarwal Tara holds a master’s degree in Statistics (Actuarial Science) and has graduated in Economics, Statistics and Mathematics. Her area of interest includes quantitative research and developmental economics. Currently she holds a position of Research Assistant at CUTS and is working on the issue of non-tariff barriers (NTBs) to trade. Aparna Sharma Aparna Sharma holds a master’s degree in Economics. She has keen interest towards research work, which involves International Trade and Economics, Intellectual Property Rights and Patents, Transportation and Mobility. Presently, she is working with CUTS International as Research Assistant and engaged in various projects under the regional economic cooperation area. Venugopal Ravindran Venu holds a master’s degree in Economics with specialisation in International Trade. His area of interest includes political economy of trade and regional trade agreements. Currently he is working with CUTS as a Research Assistant. He has been working on issues of trade facilitation, effects of PTAs on excluded countries, and regional economic corporation in South Asia. Sumanta Biswas Sumanta has been working for the organisation since last seven years. He has been working for field research, networking etc. which has helped him evolving his capacity in several dimensions of growth. He had undertaken several field research on the issue of International Trade and Grassroots Impact, Energy, Health etc. Currently, he is working as a Project Coordinator at CUTS. India-Bangladesh Trade Potentiality: An Assessment of Trade Facilitation Issues iii iv India-Bangladesh Trade Potentiality: An Assessment of Trade Facilitation Issues Foreword t has become a clichéd remark but nevertheless bears repetition - the Indian Sub-Continent or ISouth Asia (the geographical construct used by the West), is least integrated in terms of trade and investment flows. It is striking how low the figure is for intra-South Asia trade, as compared with its global trade. South Asia languishes at around five percent, whereas for the European Union this figure is around 67 percent, the highest, followed by NAFTA (North American Free Trade Area) at 62 percent, ASEAN (Association of South East Asian Nations) at 26 percent, LAC (Latin America and the Caribbean) and COMESA (Common Market for Eastern and Southern Africa) at 22 percent.This
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