The trade prospects between Bangladesh and India are being hindered by some challenges including lack of capacity in the land customs ports, non-payment issue of an Indian company and non-tariff barriers.
Bangladesh apparel exports to India witnessed a 114.69 per cent growth to $279 million in the just concluded fiscal year of 2017-18 over that of corresponding fiscal.
But the trade deficit between the two neighbouring countries, however, stood at $5.47 billion mostly favouring India.
The observations were disclosed at a business to business meeting with an Indian yarn and fabric exporters association and leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The meeting was held on Saturday at the BGMEA's headquarters in the city.
Ujwal Lahoti, chairman of Cotton Textiles Export Promotion Council of India led the delegation.
Tseten Nordon Cargyal, second secretary and head of chancery, Indian high commission in Dhaka, BGMEA president Md Siddiqur Rahman, its vice president Mohamme Nasir, among others, were present in the meeting.
"Though Bangladesh and India share a long border and a number of land customs ports, our trade despite having geographical advantage has not achieved the desired level so far," Mr Rahman said.
Bangladesh has a high trade deficit with India and it stood at $5.47 billion last year, he added.
"…there are some challenges hindering our trade prospects," he noted.
"The lack of capacity in the land customs ports especially at Petrapole in India is a major barrier to trade," the BGMEA president said.
About 80 per cent of the bilateral trade takes place through Benapole and Petrapole ports.
Quoting the Liliput Kidswear to 22 Bangladeshi suppliers happened in 2012, he said the non-payment issues also remains a major barrier.
"The non-payment issue caused an instant impact in the confidence of local exporters, he said stressing the need for building a relationship of trust among the local business people.
The other barriers he mentioned was non-tariff barriers like non-recognition of testing certification by the Indian authority.
Terming Bangladesh's 114.69 per cent apparel export growth 'inspiring', the BGMEA president said India is a highly potential market for locally made garments.
Five years back, the apparel exports to India was only $96.25 million.
"The middle-class population in India is growing fast with a rise in their purchasing capacity. Global brands and retailers who source from Bangladesh are opening stores there," he explained.
Moreover, Bangladesh imports most of cotton, dyes, chemical and other auxiliary items from India to produce garment here, he added.
The BGMEA president, however, called on the delegation to invest in the high end textile sector saying Bangladesh is potential market for man-made fibre based textile.
Bangladesh is an important trading partner to India in particular textiles owing to proximity, short lead time and cultural affinity between the two countries, Mr Lahoti said.
"To meet the requirement of supply from up-stream industry, there is a gap in domestic manufacturing in Bangladesh owing to higher investment in apparel manufacturing than the upstream value chain," he added.
The textile and clothing production value chain is on the reverse in India as it has higher capacity in raw material and intermediary production than domestic requirement, he added.
The demand-supply situation in Indian textile value chain perfectly suits with that demand-supply gap in Bangladesh, making India a preferred source of suppliers, he noted.
