Bangladesh’s Export Opportunities in the Indian Market

Abstract

This article investigates new opportunities that are emerging for Bangladesh with regard to her trade with India. In spite of the growing bilateral trade deficit, value of Bangladesh’s exports to India increased by about three times over the last five years. Examination of the dynamics of Bangladesh–India bilateral trade reveals that the number of products in Bangladesh’s export basket has registered significant increase, while at the same time, composition of the country’s exports to India has also shifted towards newer and non-traditional products. RCA analysis shows that export items with RCA > 1 in India, which include raw jute, chemical fertilizer, cement, RMG, leather, battery, textile fabrics and some other items, have significant export opportunities and have a combined potential market of US$ 2 billion in India. On the basis of examination of various tariff and nontariff barriers to trade with India, the article attempts to assess the economic implications of India’s sensitive list as it applies to Bangladesh, and argues that elimination of this list is not likely to have an adverse impact on India’s revenue earnings. The article also comes up with a number of recommendations to deal with the NTBs faced by Bangladesh in her trade with India, particularly in areas related to constraints arising from lack of trade facilitation.