The country’s trade gap with India in the recently concluded fiscal year declined to $4.76 billion from $5.28 billion in FY15 due to rise in export earnings against the fall in import payments.
The country’s trade gap with India maintained the declining trend for the second fiscal year in a row as the trade deficit between Bangladesh and India stood at $5.57 billion in FY14.
Experts and Bangladesh Bank officials, however, said that the country’s trade gap with India was still high as different non-tariff barriers continued to limit Bangladesh’s exports to the neighboring country.
Bangladesh’s imports from India stood at US$ 5.45 billion in the FY16 whereas exports stood at US$ 689.62 million during the financial year.
The trade gap in FY15 was US$ 5.28 billion with an export figure of US$ 527.16 million and import of US$ 5.81 billion.
Export Promotion Bureau and the BB data showed that Bangladesh’s trade gap with India recorded an all-time high in FY14.
A BB official told New Age on Monday that the trade gap with India decreased in the last two fiscal years as the country’s export earnings from the neighboring country slightly increased while import decreased.
‘Businesspeople have recently adopted a ‘wait and see’ approach to their business expansion by opening letters of credit for import due to political uncertainty and delicate situation in law and order. For this reason, imports from India decreased in FY16,’ he said.
He said that although the export to India in FY15 increased to $689.62 million from $527.16 million in FY15, the figure was still low compared to at least 10 other export destinations.
He, however, said that the trade deficit of Bangladesh against India was still high as different non-tariff barriers continued to limit Bangladesh’s exports to the neighboring country.
‘It is a natural phenomenon that Bangladesh usually faces a deficit with the neighbouring country considering the volume of India’s economy. But it is not acceptable that the size of the deficit has been huge for years,’ he said.
He said that the country’s businesspeople mainly imported industrial raw materials and intermediary goods from India.
‘The importers have no option to avoid the imports as such products are not produced in the country. So we have to try to increase the export volume to India to reduce the trade deficit with the neighboring country,’ he said.
Policy Research Institute of Bangladesh executive director Ahsan H Mansur told New Age on Monday that the country’s huge trade gap with India was not a matter of concern.
He said, ‘We have to import from India or other countries being a developing country. We should keep attention to increase the export earnings from India,’ he said.
The country’s export earnings from India have maintained a satisfactory level in the last two fiscal years, he said.
He, however, said that the government should take initiative to avoid the non-tariff barriers in different states of India which would boost the export volume of the country further.