Bangladesh’s export to India can grow by 300 percent if it can fetch just 1 percent of India’s total imports, according to the International Chamber of Commerce Bangladesh (ICCB).
Despite huge potential, India-Bangladesh bilateral trade was worth only $11 bn in fiscal 2021-22, out of which export from Bangladesh to India was worth mere $1.27 bn, ICCB mentioned in its quarterly news bulletin for April-June this year.
The World Bank estimates that the country’s exports to India could rise by 182 percent from the current level if the countries implement a free trade agreement. Improving transport connectivity between the two sides could increase exports even further, yielding a 297 percent rise.
South Asia is one of the least integrated regions in the world in terms of trade and people-to-people contact and intra-regional trade now stands at just one-fifth of its trade potential, ICCB noted.
An electricity market of Bangladesh, Bhutan, India and Nepal would save an estimated $17 billion in capital costs. However, opportunities for growth through regional trade remain largely untapped in the region and intra-regional trade in South Asia remains much below the actual potential.
At present, regional trade in South Asia accounts for only 5 percent of estimated $23 billion in trade flow; well below the potential trade of $67 billion.
In contrast, the ratio of trade in other regions are 50 percent for East Asia, 26 percent for ASEAN, 67 percent for the European Union, 62 percent for NAFTA, and 22 percent for LAC and COMESA.
Bangladesh and other countries in the region trade on better terms with distant economies than with their neighbours, the report added.