India allows Bangladesh to tranship goods to Bhutan via India

Commerce: The recent signing of a revised trade agreement between India and Bangladesh is expected to increase trade volume between Bangladesh and Bhutan.  The agreement allows Bangladesh to transship goods to Bhutan using Indian roads, water and railways.

Bangladesh, the country’s second largest trading partner after India, is the only country in the region with which Bhutan enjoys surplus of trade.  Bhutan has been officially trading with Bangladesh since 1980.

Bangladesh ambassador to Bhutan, Jishnu Roy Choudhari, said the agreement removed a long-standing trade barrier for Bangladesh, when it came to exporting goods to Bhutan.  Until the recent signing of the trade agreement, trucks from Bangladesh  are not allowed to carry goods to Bhutan via India.

Ambassador Jishnu Roy Choudhury said that trade between Bhutan and Bangladesh would become easier, and that Bangladesh goods would be much cheaper in the Bhutanese market.

The agreement also allows trucks from Bhutan to enter Bangladesh through Indian corridors to deliver goods without having to return from the Indo-Bangladesh border Burimari, 117km from Phuentsholing.

These, he said, are some of the hindrances to trade between the two economies. “With the new agreement, the volume of trade between Bhutan and Bangladesh will definitely increase,” he said.

Under the revised trade agreement, India is also allowed to use Bangladesh land, railways and water to transship goods to Myanmar.  If either of the parties does not object, the agreement will be automatically renewed every five years.

General secretary of the Exporters’ Association of Bhutan, Tshering Yeshey, said the inability of Bangladesh trucks to carry goods to Bhutan via India has resulted in high transportation costs. “Transportation cost can be reduced because, so far, our trucks have to travel twice for one consignment,” he said.

He also said that trade between Bhutan and Bangladesh would be much faster and easier, if Bangladesh trucks could drop consignments to Bhutan.

He said about 150 loaded trucks ply to Bangladesh everyday during apple and orange seasons.  In other seasons, about 30 to 40 trucks ply to Bangladesh.

The ambassador said the agreement would be implemented as soon as possible. “Once the fees and charges for the use of each other’s land, railways and water between India and Bangladesh are agreed upon, the agreement will be implemented,” he said.

The ambassador said that the agreement made it easy for Bhutan to import more goods from Bangladesh, such as furniture and jute products. “Bhutan is a small market, but it needs everything,” he said.

The revised agreement comes after the renewal of the preferential trade agreement between Bhutan and Bangladesh in December last year during Prime Minister Tshering Tobgay’s visit to Bangladesh.  During the meeting, it was agreed that duty free trade between the countries would be extended on 18 more products, from the existing 72.

The ambassador also said that the agreement would facilitate the free flow of goods in the sub-region involving India, Bangladesh, Bhutan and Nepal. “The agreement will bring a change in the whole sub-region in terms of trade,” he said.

With the revised agreement, other goods that Bangladesh could export to Bhutan according to the ambassador are dry fish and more varieties of pharmaceutical products.  Among others, imports from Bangladesh include readymade garments, toiletries, fruit juices, pharmaceutical and cosmetics.  Some of the exports to Bangladesh are oranges, apples, gypsum and dolomite.

In 2012, Bhutan exported goods to Bangladesh worth Nu 1.17 billion, while the former’s import from the later stood at Nu 281 million only.  However, the dynamics of the bilateral trade is expected to change once the new trade deal is implemented.  In 2013, the share of exports to Bangladesh increased to seven percent from four percent in 2012.

By MB Subba