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Bangladesh’s Export Opportunities in the Indian Market

Author

Listed:
  • Mustafizur Rahman

    (Mustafizur Rahman (corresponding author) is the Executive Director, Centre for Policy Dialogue (CPD), House 40 C, Road 11, Dhanmondi R/A, Dhaka 1209, Bangladesh. Email: mustafiz@cpd.org.bd)

  • Towfiqul Islam Khan

    (Towfiqul Islam Khan is Senior Research Associate, Centre for Policy Dialogue (CPD), House 40 C, Road 11, Dhanmondi R/A, Dhaka 1209, Bangladesh)

  • Ashiqun Nabi
  • Tapas Kumar Paul

    (Ashiqun Nabi and Tapas Kumar Paul are Research Associates at the Centre for Policy Dialogue (CPD), House 40 C, Road 11, Dhanmondi R/A, Dhaka 1209, Bangladesh)

Abstract

This article investigates new opportunities that are emerging for Bangladesh with regard to her trade with India. In spite of the growing bilateral trade deficit, value of Bangladesh’s exports to India increased by about three times over the last five years. Examination of the dynamics of Bangladesh–India bilateral trade reveals that the number of products in Bangladesh’s export basket has registered significant increase, while at the same time, composition of the country’s exports to India has also shifted towards newer and non-traditional products. RCA analysis shows that export items with RCA > 1 in India, which include raw jute, chemical fertilizer, cement, RMG, leather, battery, textile fabrics and some other items, have significant export opportunities and have a combined potential market of US$ 2 billion in India. On the basis of examination of various tariff and nontariff barriers to trade with India, the article attempts to assess the economic implications of India’s sensitive list as it applies to Bangladesh, and argues that elimination of this list is not likely to have an adverse impact on India’s revenue earnings. The article also comes up with a number of recommendations to deal with the NTBs faced by Bangladesh in her trade with India, particularly in areas related to constraints arising from lack of trade facilitation.

Suggested Citation

  • Mustafizur Rahman & Towfiqul Islam Khan & Ashiqun Nabi & Tapas Kumar Paul, 2011. "Bangladesh’s Export Opportunities in the Indian Market," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 12(1), pages 117-141, March.
    • Handle: RePEc:sae:soueco:v:12:y:2011:i:1:p:117-141
    DOI: 10.1177/139156141001200106
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    References listed on IDEAS

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    1. Balassa, Bela, 1977. "'Revealed' Comparative Advantage Revisited: An Analysis of Relative Export Shares of the Industrial Countries, 1953-1971," The Manchester School of Economic & Social Studies, University of Manchester, vol. 45(4), pages 327-344, December.
    2. Mahinda Siriwardana & Jinmei Yang, 2007. "Effects of Proposed Free Trade Agreement between India and Bangladesh," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 8(1), pages 21-38, January.
    3. Baysan, Tercan & Panagariya, Arvind & Pitigala, Nihal, 2006. "Preferential trading in South Asia," Policy Research Working Paper Series 3813, The World Bank.
    4. Raihan, Selim & Razzaque, Mohammad A, 2007. "WTO and regional trade negotiation outcomes: quantitative assessments of potential implications on Bangladesh," MPRA Paper 38475, University Library of Munich, Germany.
    5. Sawhney Aparna & Kumar Rajiv, 2008. "Rejuvenating SAARC: The Strategic Payoffs for India," Global Economy Journal, De Gruyter, vol. 8(2), pages 1-19, June.
    6. Jayatilleke S. Bandara & Wusheng Yu, 2003. "How Desirable is the South Asian Free Trade Area? A Quantitative Economic Assessment," The World Economy, Wiley Blackwell, vol. 26(9), pages 1293-1323, September.
    7. Prabir De & Biswa N. Bhattacharyay, 2007. "Deepening India–Bangladesh Economic Cooperation : Challenges and Opportunities," Macroeconomics Working Papers 22098, East Asian Bureau of Economic Research.
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    Cited by:

    1. Anisul M. Islam, 2018. "Inter- and Intra-industry Trade Relations between Bangladesh and India: Empirical Results," FIIB Business Review, , vol. 7(4), pages 280-292, December.
    2. Amrita Saha, 2014. "Negotiating Exclusions in Developing Country FTAs," Foreign Trade Review, , vol. 49(4), pages 349-357, November.

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    More about this item

    Keywords

    JEL: F13; JEL: F14; JEL: F15; MFN; non-tariff barrier; tariff; trade agreements; comparative advantage; Inter-national Trade Agreements; SAFTA;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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