Bangladesh is about to sign the Comprehensive Economic Partnership Agreement (CEPA) with India with a view to reducing the trade deficit, widen the neighbouring country’s investment opportunity and enhance the export of goods and services.
A memorandum of understanding has already been signed with the Institute of Foreign Trade (IFT) of India as the preliminary work of the agreement.
In 2024, Bangladesh will finally graduate from the least developed country (LDC). At that time, a new bilateral agreement will be needed to increase trade and commerce between the two countries.
Keeping this in mind, initiatives have been taken in the interest of trade, investment and economic development. The agreement will cover things like product service and investment. Under the bilateral trade agreement only goods are now exported to India.
The agreement will include service and investment besides the product export. After CEPA, there will be an opportunity to open the export of services. In particular, the coverage of banking and insurance services will be widened. Investment and employment will increase.
Commerce Secretary Zafar Uddin told journalists that “The SAFTA trade agreement between the South Asian countries is not enough for Bangladesh to enter the Indian market with a larger volume. For this reason, CEPA is urgently needed at the bilateral level now. The agreement is aimed at taking Bangladesh-India trade and economic relations to new heights. This agreement will help the country increase service exports and reduce the trade deficit.
The Ministry of Commerce has formed a ten-member advisory committee to oversee the possibilities of the agreement. The Bangladesh Foreign Trade Institute (BFTI) has started work to prepare a survey report by reviewing and analysing the overall issues of the CEPA agreement. The agency's initial comments suggest that the CEPA deal will have a positive impact on Bangladesh's economy.
It said the agreement would pave the way for India's free investment in Bangladesh. Bangladesh will get the opportunity to export goods as well as services. Bangladesh will be able to benefit greatly from this huge market in India. Economic relations between the two countries will reach new milestones.
The country's Import-export activities are conducted under the bilateral trade agreement with India. As a single country, India is Bangladesh's second-largest trading partner after China. The potential volume of Bangladesh-India trade is about 9.5 billion dollars.
This large-scale trade has always been in India's favour. India is the main source of raw materials for consumer goods and industry. As a result, the trade deficit is increasing every year. To overcome this deficit, besides increasing exports to India, attention should be paid to attracting Indian investment in Bangladesh. CEPA can play a big role in this regard.
