The coronavirus pandemic has rattled the economies, but it has also brought some lessons: the world needs to cooperate and collaborate to develop resilient systems. So thinks Indian High Commissioner to Bangladesh Vikram Doraiswami.
“We are trying to increase our capacity to shorten the global value chain. We have seen during the pandemic that the global value chain has been heavily stressed,” he said in an exclusive interview with The Daily Star recently.
The envoy spoke on how the two countries could boost trade and connectivity and remove the barriers.
“India and Bangladesh are located next to each other. In such a situation, what I am keen on is to look at some areas to start with where we can shorten the production chain and link up the two countries much more closely.”
According to the envoy, many people in India and Bangladesh are dependent on agriculture, including fisheries, poultry, food, food grain, fruits and vegetables, but they get very little value in trade terms from value-addition.
“The raw stuff goes off, gets packaged and tinned elsewhere, and both of us lose out. The two countries could work on some of the issues.”
“As a result, production chains would be much better and simpler. It would be far easier, increase income and be part of the shorter value chain.”
IT is another area where the two countries can cooperate. Recently, the Bimstec Startup Conclave was held where a lot of young Bangladeshi companies participated.
“This is something that is uniquely suited for the two countries to cooperate because of cultural commonalities. The two countries can collaborate in the creation of OTT [over-the-top] contents and language-based AI [artificial intelligence].”
Bangladesh and India have huge synergy on agriculture and IT that can be leveraged in the post-pandemic phase, he said.
He backed strengthening connectivity and establishing more links concerning railway, truck, air, cargo, inland water and coastal shipping connectivity.
“If a container from Delhi takes 50 days to reach Bangladesh via the sea route, a lot of its value is lost with the cost of doing business in India and the cost of the products in Bangladesh going up.”
“If we could enhance connectivity, it is win-win.”
Bangladesh, given its geography, is ideally suited to take the best advantage of its strategic location. “Bangladesh could reimagine itself as the 21st century Singapore on a much larger scale,” he said.
A lot of connectivity projects have been finalised, and India is waiting for them to start.
“Trials have been done. We are keen to move forward because we believe that if these are done, we will be able to show on both sides that there is huge economic value for Bangladesh from such connectivity,” Doraiswami said.
Citing an example, the envoy said, Bangladeshi trucks, port handling services and insurance companies will be used in the transport of goods from Chattogram Port to Tripura and beyond.
“Bangladesh is going to benefit by providing these services, while India gets faster movement of goods and the cost is low.”
The envoy says he does not know why the connectivity projects are being delayed.
“We see that there are some pushbacks, saying that India wants that… so we should not do it. I don’t see why that should happen.”
“You should see whether it benefits you or not. We want to push through negotiations to get all these moving.”
“We think the simple fact is the benefit is shared. If you look at it with an open eye, most of the stuff that is going to go through will benefit you.”
Bangladesh has exceeded $1-billion mark in annual exports to India, but the bilateral trade is heavily tilted towards India with about $6 billion worth of goods coming from the country. Dhaka has raised the issues of non-tariff barriers and anti-dumping duty on jute products.
In response, Doraiswami said the Indian side had nothing to avoid issues that Bangladesh raised.
“Some of it comes from inadequate understanding because we had these dialogues at higher levels — ministerial and secretarial levels. They don’t succeed in drilling down to all the issues in details.”
Now the issues are being discussed at the specialists’ level and are expected to be addressed.
“None of the issues have fundamental problems. There are some complexities about trade, including reducing systemic restrictions on the movement of goods,” the high commissioner said.
India has been offering a zero-tariff facility to Bangladesh for many years. In many other countries, there is generalised system of preferences (GSP), but not necessarily zero tariff, he said.
In a zero-tariff ecosystem, if a country has a policy to make exports more competitive, it becomes a problem, he said.
“Because of our commonalities and historic ties, many of the goods that you export are also similar. So, we have to be careful to ensure that whatever we do, we have to do it in a manner that also does not create market distortion or push back against trade.”
He said if there is a product in India providing Bangladesh something and the vice versa, that benefits consumers and reduces the prices, it is good.
“Why should you pay more prices for something that is available in India at half the price and similarly the other way around? That’s the basis of comparative advantage in trading, and we should do this. We just need to have these clear conversations. We often don’t have these clear conversations.”
To the envoy, it is strange, considering the strong friendship, that the two countries have seldom got the specialists to come down to the actual level.
He said he was committed to doing this on all issues of both countries and coming up with simple solutions in the next several months.
As Bangladesh is set to graduate from the grouping of the least developed countries in 2024, India and Bangladesh is in talks about signing a comprehensive economic partnership arrangement for preserving Bangladesh’s benefits in India and can address a number of other trade-related issues.
“India would like to provide zero-tariff but under a different regime,” Doraiswami said.
On the Bangladesh, Bhutan, India and Nepal Motor Vehicle Agreement, he said the connectivity is very logical. “Bangladesh would be one of the big beneficiaries of it.”
He thinks the protocol for cargo and passenger transport should move ahead. There are restrictions on the numbers of vehicles, which is manageable.
“We are very keen to move forward because we have lost almost a year. We are keen to move forward with the signing of the two protocols on cargo and passenger movement. We are close to the agreement. We need to ensure that everybody is comfortable with it.”
Bangladesh is seeking to join the India-Myanmar-Thailand Highway Project.
The road enters Myanmar from Manipur, which is on the other side of Tripura and goes through Barak Valley to Myanmar and then to Thailand.
“If Bangladesh is keen, India can certainly look at how it is doable.”
“If connectivity develops between India and Bangladesh, particularly in the Northeast, it would connect Bangladesh up to the project.”
“If we have connectivity, Bangladeshi trucks going through Northeast and Indian trucks coming through, then this is straightaway doable. Then we would not have to negotiate the road rules that apply. We just need to do our homework on the bilateral portion of our protocol.”
Source: The Daily Star
