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Bangladesh's Export Opportunities in the Indian Market: Addressing Barriers and Strategies for Future

Author

Listed:
  • Mustafizur Rahman
  • Towfiqul Islam Khan
  • Ashiqun Nabi
  • Tapas Kumar Paul

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. Revealed Comparative Advantage (RCA) analysis shows that export items with RCA>1 in India, which include raw jute, chemical fertiliser, cement, RMG, leather, battery, textile fabrics and some other items, have significant export opportunities and have a combined potential market of USD 2 billion in India. On the basis of examination of various tariff and non-tariff 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 non-tariff barriers 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, 2010. "Bangladesh's Export Opportunities in the Indian Market: Addressing Barriers and Strategies for Future," CPD Working Paper 90, Centre for Policy Dialogue (CPD).
    • Handle: RePEc:pdb:opaper:90
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    References listed on IDEAS

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    1. Hassan, M. Kabir, 2001. "Is SAARC a viable economic block? evidence from gravity model," Journal of Asian Economics, Elsevier, vol. 12(2), pages 263-290.
    2. 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.
    3. 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.
    4. Mustafizur Rahman & Wasel Bin Shadat & Narayan Chandra Das, 2006. "Trade Potential in SAFTA: An Application of Augmented Gravity Model," CPD Working Paper 61, Centre for Policy Dialogue (CPD).
    5. Baysan, Tercan & Panagariya, Arvind & Pitigala, Nihal, 2006. "Preferential trading in South Asia," Policy Research Working Paper Series 3813, The World Bank.
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    7. Sawhney Aparna & Kumar Rajiv, 2008. "Rejuvenating SAARC: The Strategic Payoffs for India," Global Economy Journal, De Gruyter, vol. 8(2), pages 1-19, June.
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    Citations

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    Cited by:

    1. Mustafizur Rahman & Khondaker Golam Moazzem & Mehruna Islam Chowdhury & Farzana Sehrin, 2014. "Connecting South Asia and Southeast Asia : A Bangladesh Country Study," Development Economics Working Papers 24423, East Asian Bureau of Economic Research.
    2. Amrita Saha, 2014. "Negotiating Exclusions in Developing Country FTAs," Foreign Trade Review, , vol. 49(4), pages 349-357, November.
    3. Mustafizur Rahman & Mazbahul Golam Ahamad & A K M Nazrul Islam & Muhammad Al Amin, 2012. "Agricultural Trade between Bangladesh and India: An Analysis of Trends, Trading Patterns and Determinants," CPD-CMI Working Paper 3, Centre for Policy Dialogue (CPD).
    4. Lubna NAZ* & Naeem-uz-ZAFAR** & Mohsin Hasnain AHMAD***, 2019. "THE IMPACT OF PREFERENTIAL TRADE AGREEMENTS ON SOUTH ASIAN EXPORT FLOWS: Using Matching Econometrics," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 29(2), pages 243-264.
    5. 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.
    6. Fahmida Khatun & Samina Hossain & Nepoleon Dewan, 2013. "Evaluating Aid for Trade on the Ground: Lessons from Bangladesh," CPD Report 5, Centre for Policy Dialogue (CPD).
    7. Anisul M. Islam, 2019. "Bangladesh Trade with India: Trends and Patterns," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 5(2), pages 123-140, April.
    8. Tahmina Akter & Md. Al Amin, 2019. "Foreign Policy of Bangladesh: Bilateral Trade between Bangladesh & India," International Journal of Science and Business, IJSAB International, vol. 3(6), pages 65-70.
    9. Fahmida Khatun & Debapriya Bhattacharya & Mustafizur Rahman, 2013. "Revisiting the PRSP Experience in Bangladesh: Perspectives on Representation, Accountability and Inclusiveness," CPD Working Paper 105, Centre for Policy Dialogue (CPD).

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    More about this item

    Keywords

    SAFTA; Bangladesh trade with India; non-tariff barrier;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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