Bangladesh is in talks with the 15-member RCEP bloc and is likely to take a call about joining it after the elections on January 7. India had pulled out of the RCEP pact in 2019 after negotiating for seven years, citing concerns on trade deficit with China, circumvention of rules of origin, and how the base rate of customs duty was unaddressed. The RCEP now comprises the 10 Association of Southeast Asian Nations (Asean), as well as Australia, China, Japan, South Korea and New Zealand.
“Bangladesh has reduced its overall imports and is thinking of joining the RCEP. We are cautious about it. We are watching the implications on trade and industry,” said an official. Bangladesh is India’s biggest trade partner in South Asia. The two sides had decided to start negotiations on a bilateral Comprehensive Economic Partnership Agreement, with the aim to implement the pact by the time Bangladesh graduates out of its least developed country (LDC) status in 2026. The official added that Bangladesh already gets preferential benefits under the South Asian Free Trade Area (SAFTA) of which India is also a member.
“Bangladesh has a major import squeeze. Cotton yarn and edible commodities have been hit, but we are not pressuring them to import more,” said another official. India’s exports to Bangladesh in April-October FY24 were $6.04 billion and $12.21 billion in FY23. Imports were $1.15 billion in the first seven months of 2023-24 and $2.02 billion in last fiscal.
The European Union has extended preferential access to Bangladesh’s exports. This is significant as the EU suspended the benefits under Generalised System of Preferences to India’s exports of textiles, chemicals, leather, plastics, metals and machinery January 1, 2023. “Any trade agreement with Bangladesh will only benefit them and add to their advantage,” said a Delhi-based trade expert.
