Bangladesh Now Among India’s Top 5 Export Destinations | Latest India News
Bangladesh overtook Hong Kong to become India’s fourth largest export destination in the first three months of the current calendar year, and climbed four notches to rank among the top five export destinations in the world. countries in 2020-21 due to New Delhi’s diplomatic efforts, ease of logistics and high demand for Indian agricultural products.
India’s exports to Bangladesh increased 46% on an annualized basis to $ 3.16 billion in January-March, securing it fourth position after the United States ($ 15.41 billion), the China ($ 5.92 billion) and the United Arab Emirates ($ 5.34 billion), according to the latest data from the Ministry of Commerce. India’s merchandise exports to Bangladesh, which grew 35.14% to $ 0.95 billion annually in January and 17% to $ 0.94 billion in February, saw an annualized jump of 93 , 45% in March to $ 1.26 billion.
India, which follows the April-March fiscal year, saw Bangladesh take fifth place on its list of top export destinations for fiscal year 21, a jump from ninth in 2019-2020, with annualized growth of 10.83% to $ 9.09 billion. . The top four export destinations in 2020-2021 are the United States ($ 51.63 billion), China ($ 21.2 billion), the United Arab Emirates ($ 16.68 billion) and Hong Kong ($ 10.15 billion).
The Managing Director and CEO of the Federation of Indian Export Organizations (FIEO), Ajay Sahai, said that one of the reasons for the increase in exports to Bangladesh is relatively less disruption in the flow of goods to the countries relative to other export destinations in the United States and Europe due to Covid restrictions. “A combination of three factors has contributed to the increase in exports to Bangladesh – diplomatic efforts, logistics in terms of railways and waterways, and demand for agricultural products,” he said.
Bangladesh is one of the biggest markets for Indian agricultural products. India’s agricultural exports to Bangladesh registered the second highest growth of 95.93% in 2020-21 after Indonesia (102.42%), a government official said on condition of anonymity.
The main contributors to the increase in exports in 2020-21 are petroleum products and agricultural products such as rice (other than basmati), said David Sinate, chief executive of research and analysis of India. Exim Bank. Exports also surged due to a sharp reduction in import tariffs on rice (from 62.5% to 25%) by Bangladesh. The movement of goods by rail instead of road has also facilitated trade with reduced transport costs, he added.
People familiar with the developments said trade with Bangladesh has been aided by India’s focus on keeping major rail and river routes open amid disruption to the neighborhood caused by the pandemic. Land customs posts and other border facilities have also been modernized and there is greater coordination between the two sides. “There has been a conscious effort to ensure that the bilateral relationship is built on strong trade and economic ties. There has been more emphasis on connectivity and the relaxation of trade procedures at the border due to the trust in the relationship over the past decade, ”said one of the people cited above.
“At the same time, on the Bangladeshi side, there has been a realization that some products can be bought cheaply in India and with the same quality,” the person said, adding that Dhaka had also benefited from concessions in the framework of the South Asian Free Trade Area. (SAFTA).
According to Sahai, the consumption of food products has increased around the world in recent years. “Bangladesh imports large quantities of agricultural products from India due to better quality, reasonable tariffs and logistical advantages,” he added.
“The main reason for the increase in exports to Bangladesh is the huge increase in grain exports,” said Mohit Singla, founding president of the Trade Promotion Council of India (TPCI), adding that the cost of freight is often a decisive factor for world imports. According to the Food and Agriculture Organization of the United Nations (FAO), the costs of importing food products around the world will reach record highs this year, he said. The global food import bill, including shipping costs, is expected to reach $ 1.715 billion this year, he added.
“Bangladesh is India’s most important trading partner in the South Asian region, and the governments of both countries are making diplomatic efforts to strengthen trade and commerce for mutual benefit. This is reflected in Prime Minister Modi’s first foreign visit to the country after the first wave of the Covid-19 pandemic on March 26 and 27, 2021, ”said another government official who asked not to be named.