In just nine months export earnings to India touched a record high of US$ 1.5 bln for the first time. Many businessmen see this as a great opportunity to further develop economic relations with the neighboring country.
Despite the good news, the Bangladesh – India trade deficit is still a major concern. Bangladesh imports goods from India worth around US$ 10.17 bln while India imports goods from Bangladesh worth only around US$ 1.28 bln, which translates to a trade deficit of around US$ 9 bln.
According to concerned sources, in the first nine months (July-March) of the current 2021-22 fiscal year, Bangladesh exported goods worth $1.53 billion to the Indian market.
This figure was 20 percent higher than the entire period of the last financial year (12 months, July 2021 to June 2022), and 59 percent more than the same period.
Three more months (April-June) are left till the end of the fiscal year. If the current positive trend continues, Bangladesh's exports to the Indian market may cross $2 billion milestones by the end of the current financial year, said, exporters and economists.
Ever since the epidemic became normal, Bangladesh's exports have rapidly increased.
From July-March, the country's total earnings increased to $38.60 billion, up 33.41 percent from the same period last year.
During this time, the exports have increased in all countries. However, the exports to India have seen the highest growth.
Experts said the export earnings to India are increasing due to geographical reasons with a lower cost of production.
Besides, these earnings have increased rapidly as the country is now producing quality products, they said, expecting that it will continue to grow in the coming days.
If this positive trend continues, Bangladesh's exports to the Indian market will surpass $2 billion for the first time by the end of the current financial year, they mentioned.
According to the latest data from the Export Promotion Bureau (EPB), India, as a single country, is now the seventh-largest export market in Bangladesh. In other words, India is now one of the top 10 markets for Bangladesh's export earnings.
Even in the last fiscal year, India did not have a place in the list of top 10 export markets of Bangladesh. In previous years, India was ranked 14th-15th.
The United States, as always, is on top and Germany is in second place. It was followed by United Kingdom, France, Spain and Poland respectively.
In just three fiscal years in the history of Bangladesh, the export of goods to India has exceeded $1 billion in the last three consecutive years.
However, in the first six months of the current 2021-22 fiscal year, the export exceeded $1 billion to stand at $1.06 billion.
In FY 2020-21, the country’s export earnings stood at $1.28 billion to India, the highest ever, up about 17 percent from that in the 2019-20 fiscal.
Indian High Commissioner to Bangladesh Vikram Kumar Doraiswami has given the good news that Bangladesh's exports to India will increase in the coming days.
“Bangladesh-India trade has grown by 94 percent in the last year. At the end of the current fiscal year, Bangladesh's exports to India will cross $2 billion for the first time, which will give a new dimension to trade relations between the two countries, he had recently said during a meeting with the president of the FBCCI.
Meanwhile, Bangladesh has overtaken China to become the top exporter of garments made in India.
According to the Indian Ministry of Commerce, in 2021, India imported a total of $1.15 billion of ready-made garments. Of this, they have imported goods worth $47.47 crore from Bangladesh and $28 crore from China.
Despite the increase in exports, the trade deficit with India is still huge. In the last fiscal year 2020-21, the trade between the two countries was a total of $10.17 billion. Of this, Bangladesh exported only $1.28 billion of goods to the Indian market. As a result, the trade deficit was $8.89 billion.
However, the United States is the main export market for Bangladesh. The United States, the world's largest economy, accounts for 20 percent of total export earnings.
During the July-March period of the 2021-22 fiscal year, the country’s export earnings stood at $761.53 crore, up 50.37 percent more than the same period of last fiscal year.
Germany was the second largest importer of goods worth $568.48 crore during the same time, up 32 percent than the same period of previous year.
It was followed by United Kingdom ($362.61 crore), Spain ($238.89 crore) and France ($193.97 crore).
Mohiuddin Rubel, Director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, “The value of garments made in Bangladesh is increasing in India. Bangladesh's exports to India are increasing due to geographical reasons. It seems to me that from now on it will continue to grow.”
India has to buy clothes from Bangladesh to meet the demand of about 1.5 billion people, he said, adding that the cost of making garments in India is much higher than that imported from Bangladesh. That is why they are now buying more and more clothes from Bangladesh, he mentioned.
Professor Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), a private research organization, said, “Bangladesh has a large and growing market in India. But Bangladesh has not benefited enough from there so far. The total value of India's imports from the global market is about $450 billion. But Bangladesh's exports to India are just over $1 billion.”
“Now our exports to India are increasing. But that is negligible compared to the huge market of 150 crore people in India. Taking advantage of the favorable environment that has now emerged will add a new dimension to Bangladesh's export trade,” he mentioned.
