After the coup in Bangladesh, the trade between India and Bangladesh has started slowing down. Due to the ongoing political crisis in the neighboring country, bilateral trade between the two countries has come to a standstill for the time being. However, exporters hope that the situation will be controlled soon so that business can become normal again. But the problem of Bangladesh is not limited to political crisis only.
According to exporters, the foreign exchange crisis in Bangladesh is also creating problems in doing business. There is already a huge shortage of dollars in Bangladesh, due to which the country’s import capacity has been affected and imports from other countries including India have decreased.
Bangladesh troubled by dollar shortage
Bangladesh is India’s largest trading partner in South Asia and ranks second among all the neighboring countries of India. If we talk in terms of figures, in 2023-24, $11 billion was exported from India to Bangladesh, which was $12.21 billion in 2022-23. Along with this, the import from Bangladesh was 1.84 billion dollars last year whereas it was 2 billion dollars two years ago. But due to the ongoing crisis, the movement of goods across the border has stopped, due to which perishable goods including vegetables and fruits are facing difficulties in crossing the border.
If these goods do not reach their destination quickly, then exporters may suffer huge losses. Items exported from India to Bangladesh include vegetables, coffee, tea, spices, sugar, confectionery, refined petroleum oil. Apart from chemicals, cotton, iron and steel, vehicles are also included while fish, plastic, leather and clothes are imported into India from there.
Inflation reduced demand in Bangladesh
Along with this, inflation is also at a very high level in Bangladesh due to which the domestic demand has reduced which is working to reduce imports by reducing consumption. Even before this, the weak economy of Bangladesh has also worked to reduce imports from India. Goods exported from India to Bangladesh are subject to full tax and the South Asian Free Trade Area Agreement does not apply. SAFTA rules are applicable on the items imported from Bangladesh to India, due to which these items get the benefit of zero tariff in India.