The New Nation - Internet Edition

Pulack Ghatack

Bangladesh’s trade gaps with India and China are widening alarmingly leading the country’s overall trade deficit to increase by 65.16 per cent to US $3.921 billion in the first nine months of this fiscal year.

Trade deficit between Bangladesh and China crossed more than 2.50 billion dollars in the last financial year.

Currently the annual volume of trade between Bangladesh and India is more than U$2.80 billion, with 2.40 billion deficit tilted towards India.

India has made an agreement to annually import two million garments from Bangladesh without levying duties, in a bid to reduce the yawning trade gap between the two neighbours.

As an LDC, Bangladesh enjoys preferential and duty-free quota free market access to many countries including India, Pakistan, EU, Japan, Thailand and Korea.

But China is yet to offer any facility. Diplomatic initiative from Bangladesh side to gain duty free access to China market is not visible.

Bangladesh saw a 7.9 per cent annual increase in bilateral trade with China reaching US$3.44 billion, of which US$3.33 billion was import trade from, according to official estimate.

China became the biggest trading partner of Bangladesh in 2006 while Bangladesh is now China's third-largest trade partner in South Asia, he said.

Meanwhile, India has regained its position as the number one import source for Bangladesh, beating China, in the first nine months of the current fiscal due mainly to large-scale imports of rice and onion from India, official figures said.

Bangladesh's rice import bill from India soared to US$730 million in the July-March, up from only US$170 million in the whole 2006/07 financial year.

China has been the number one import source for Bangladesh during 2005-06 and 2006-07.

The country imported Chinese goods worth US$2.2921 billion during July-March of the current fiscal year. The amount was 15 per cent of the country's total imports during the period.

But imports from India figured US$2.454 billion or 16 per cent of overall imports.

Low-cost Indian and Chinese products are making Bangladesh more dependent on the Asian economic giant, contributing to a widening trade gap of more than one and a half billion dollars between the two countries in just six months of the current fiscal year.

Bangladesh now imports raw cotton, boilers, machinery and mechanical appliances, knitted fabrics, man-made staple fibre and man-made filament, electric machinery and equipment, fertiliser, buses and covered vans, organic chemicals and special woven fabrics from China.

On the other hand, China imports raw jute, leather, frozen foods, jute and jute goods and chemicals from Bangladesh.

The business leaders noted that import from China surged mainly due to its wide range of products and prices.

Although China has been the dominating source of woven fabrics and raw cotton for long, all types of machinery and electronics imports from China have also gone up in the recent times.

In terms of price, Chinese products are unbeatable no matter how their quality is. There are high-quality Chinese products, but they are hardly being imported. They observed that Chinese goods are cheaper compared to the same standard products of India. China offers goods with wide price range and importers cling to China because of its easy trade procedure and speedy shipment.