Bangladesh plans to conduct export to India from Gujarat where businessmen plan to build a warehouse, in what is seen as a way of bridging a yawning trade gap between the two countries. Businesspeople say trade from the Gujarat hub may start early next year. They hope to increase the volume of export at least to US$1.0 billion from next fiscal. A business delegation, led by Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) president Abdul Matlub Ahmad, will visit the Indian state next week to discuss the trade plans with policymakers and government officials. Gujarat is the home state of Indian Prime Minister Narendra Modi who rebuilt it as a model of development to replicate in the whole of India. The five-member business team, comprising representatives mainly from readymade garment (RMG) sector and textile industry, will leave Dhaka on August 23 at the invitation of the Indian government, sources in the business circles said. The Indian government has agreed to provide 50 acres of land in Gujarat to Bangladeshi businesspeople to build a warehouse from where merchandise, especially apparel items, can be sent directly to retail shops across India. Such a development comes after a team of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) led by its president Atiqul Islam placed the demand before the Indian Prime Minister during his recent Dhaka visit. “If everything goes accordingly, we hope to build the warehouse and distribution centre within this year and hope to start export from the storehouse from early next year,” said the FBCCI president, Mr Matlub Ahmad. According to businessmen, the warehouse will be used to store merchandise produced in Bangladesh in large quantities preparatory to marketing. Thereafter, the goods will be distributed across India through supply chain. Besides apparel products, the warehouse will also be used for storing and trading in other exportable items, like leather and leather goods, ceramics, jute and jute products. In addition to the warehouse, the businessmen also have a plan to install a manufacturing industry at the Bangladesh industrial park in Gujarat. The industry, to be set up jointly by the BGMEA and entrepreneurs from other sectors, will primarily receive order from the Indian buyers as per their requirements and feed the Indian market. “It will reduce the trade hassles and increase the country’s export volume several-fold,” said the FBCCI president while talking to the Financial Express. “We hope to raise the export as much as to the level of 1.0 billion even from next year,” he added. “India is a huge market of 1.30 billion people and having a local RMG market of about US$ 32 billion. If we can grab a small fraction of it, it’s a huge market for Bangladesh,” said Mr Matlub Ahmad, also chairman of Nitol Niloy Group and founder-president of the India-Bangladesh Chamber of Commerce and Industry. BGMEA president Atiqul Islam also echoed: this would help garment-makers meet their target of exporting $1 billion worth of products to India within the next three years. “Once the formalities are over, we will set up a company in India and build the largest warehouse and distribution centre there,” he said. The apex body of apparel industry, according to Mr Atiq, will also set up 1,000 retail stores across India and these efforts will help narrow the current trade deficit between the two neighbouring countries. According to industry sources, a large number of Bangladeshi apparel products are now being sold on the Indian market through giant international buyers. If those can be sold directly, then both delivery time and cost can be cut. The Indian buyers will also get similar benefit from this deal position as they will be able to get these products at low prices by spending less time. According to the Export Promotion Bureau (EPB), merchandise shipments to India, also Bangladesh’s second- largest source of necessary imports, after China, increased substantially to US$ 527.167 million in the just-concluded fiscal year (2014-15). It posted a growth of 15.46 per cent over the volume of $456.633 million of the previous FY. Despite the growth, exporters, especially the readymade garment (RMG) manufacturers, are not happy. They say shipment of the main item remained almost static on the neighbouring market for various tariff and non-tariff barriers. Apparel export to India also increased from US$96.25 million to 104.25 million last fiscal, which exporters said is very nominal compared to other countries. Apparel exports, even in newfound markets, including South Africa, grew 37.05 per cent. I China it grew 26.33 per cent while 23.88 per cent in Australia and 14.02 per cent in Japan. Although Bangladesh experienced substantial growth in import from India, the country’s traders faced various non- tariff barriers to access the Indian market, which increases the trade deficit, said an exporter. “Even after duty-free access of Bangladesh-made RMG to India, Bangladesh could not see any significant growth in export mainly because of some tariff and non-tariff barriers and government’s lack of initiative in negotiation with the counterpart on different trade-related issues,” said an official of BGMEA. The two-way trade stood at US$6.6 billion in 2013-14 with India’s exports at 6.1 billion dollars and imports from Bangladesh at 462 million dollars. This represents more than double the value of US$2.7 billion five years ago.
