Under SAFTA, Bangladesh has secured a reduced sensitive items list and accelerated duty-free treatment for almost all items. Still Bangladesh experiences a modest level of nontariff barriers, and also a four per cent import tax on the readymade garment products, rebated to domestic traders from different states.

1. http://today.thefinancialexpress.com.bd/views-reviews/challenges-for-bangladeshi-exports-to-
india-1534178270
Challenges for Bangladeshi exports to India
M S Siddiqui | August 14, 2018
Bangladesh imported products worth US$48.21 billion and exported $34.85
billion during the year 2016-17. Imports from Bangladesh to India are
increasing at faster rate, but Bangladeshi exports to India are declining
gradually. Over the past five years, trade between Bangladesh and India
increased by 28 per cent, when it increased by 68 per cent with China. The
largest bilateral trade partner for Bangladesh is China. In 2016-17 fiscal
year, Bangladesh imported 14 per cent more products than previous year,
amounting to $6.50 billion and exported only $ $672.4 million worth of goods.
This is 1.72 per cent less than the amount exported in 2015-2016 fiscal year.
The reduction is mainly due to imposition of anti-dumping duty on jute
products.
Bangladesh faces various other Non-Tariff Barriers (NTB) under categories
of (1) Sanitary and phytosanitary barriers, (2) Standardisation, (3) Quality,
(4) Quantity, (5) Classifications, (6) Understanding of law and regulation of
each other country.
After studying the trade in South Asia in 2015, Asian Development Bank
(ADB) observed that the share of different trade barriers to SAARC countries
are: (1) Sanitary and Phyto-sanitary (SPS), Technical Barrier to Trade (TBT),
and Other Related Measures: 86 per cent, (2) Tariff Quota: 9.8 per cent, (3)
Anti?Dumping Measures: 7.4 per cent, (4) License requirement: 5.3 per cent,
(5) Countervailing measures: 1.2 per cent.
It is difficult to create an exhaustive list of NTBs as they tend to vary from
consignment to consignment. Most NTBs are non-transparent and hence are
difficult to identify. Some of them are state-mandated impositions or
requirements, while others are sheer bureaucratic interference. The most
commonly used NTBs are the following:
1) DISPUTE OVER CLASSIFICATION OF GOODS FOR CUSTOMS
PURPOSES: The Indian Customs Authority sometimes refuses to accept the
H.S. classification declared by Indian importers as per nomenclature rule and
Letter of credit opened by Indian Banks. The authority has the propensity to

2. classify the products under those H.S. codes that are subject to higher
duties.
2) REQUIREMENT OF CHEMICAL TESTS: Indian Customs demands
chemical test for most products. Since there is no testing facility near any
land port, chemical tests take a long time forcing goods to be stranded for
indefinite periods under the open sky. These requirements not only raise
costs for Indian importers, but also results in harassment for Bangladeshi
exporters. Problems are more for importers based in northeast India as most
labs are located in the western India.
3) CUSTOMS VALUATION: The Indian Customs often refuses to accept the
invoice value of the exported items and assesses the consignment on the
basis of Retail Sale Price in India, which is higher than the invoice value.
This is also against standard customs policy. This practice substantially
raises the assessable value of the imported items and the buyers are forced
to pay an extra amount as import duty and taxes. As a result, Bangladeshi
exports become less competitive in the Indian market.
4) NON-ACCEPTANCE OF CERTIFICATES OF RULES OF ORIGIN: The
Indian Customs officials sometimes refuse to accept the country of origin
certificate issued by Bangladesh Export Promotion Bureau (EPB). EPB is the
government organ, authorised to issue COO. Such refusal causes goods to
be stranded indefinitely at the port of entry.
5) ARBITRARY IMPOSITION OF TARIFF VALUES: The fixing of tariff value
is done by the revenue department. But Indian customs often impose this
arbitrarily and change it without prior notice. The amount of import duty and
taxes paid on the products goes up as a result, causing inconvenience for
both the importer and exporter.
6) HEALTH AND QUALITY STANDARDS: Imposition of arbitrary health and
quality standards favours domestic producers over foreign ones. The process
of health and quality standard is very difficult for Bangladeshi products in
India. Bangladesh exports medicine to many countries of the world including
USA. But such items are not exported to India.
7) PERMITS AND LICENSES: Indian traders require obtaining Import-Export
Code No. (IEC Number) from the Director General of Foreign Trade (DGFT)
in Kolkata, for cross-border trade along the northeast. There is a distance of
about 1,680 kilometres between Kolkata and Agartala. Due to such
restrictions, Bangladesh and Tripura cannot take advantage of their
geographical proximity to increase bilateral trade.
8) CONDITION FOR OBTAINING ISI CERTIFICATE: Bangladesh exporters of
cement and building materials are required to obtain an ISI Certificate from

3. the Bureau of Indian Standard (BIS) in New Delhi, if they intend to export
their products to India. The huge cost as well as the complicated procedure
for certification makes exporting to India very difficult.
9) REQUIREMENT TO COLLECT HEALTH CERTIFICATE: An Indian importer
has to obtain a Health Certificate from the Port Health Officer (PHO) in
Kolkata if he wants to import food items from Bangladesh. This is formidable
barrier for importers in Northeast India, where the land customs stations are
1,060 km to 1,680 kilometres away from Kolkata.
10) SANITARY AND PHYTOSANITARY MEASURES: In order to import
agricultural products in India, an importer has to obtain "Bio-Security" and
"Sanitary and Phytosanitary" Import Permit. The process of obtaining this
certificate is very complicated, time consuming and non-transparent. As
such, this rigid process discourages trade in this sector between the two
countries.
11) QUARANTINE REQUIREMENTS: Indian law has provision of obtaining
quarantine certificates for importing "living organism". This is mandatory
under the Indian law. But the Indian Customs demands quarantine certificate
even for jute and jute goods, though these are not living organisms.
12) TECHNICAL STANDARDS: Quality standard certificate by the
Bangladesh Standards and Testing Institution (BSTI) is not accepted by
India. India introduced mandatory marking for a number of products stating
that these should comply with Indian Quality Standards set by the Bureau of
Indian Standards (BIS). This requirement seriously hampers Bangladesh's
exports to India. Mutual recognition of each other's standards can prevent
this problem.
13) INADEQUATE LAND CUSTOMS INFRASTRUCTURE: There is an
absence of warehousing facilities for imported goods in most land customs
stations on the Indian side. As a result, goods exported by Bangladesh are
kept in the open space till customs formalities for clearance are completed.
This damages the exported goods and their inconsistent supply to the Indian
market.
14) LABELLING AND MARKING PROVISION: The Indian authorities have
made it mandatory to print some information such as the name of the country
of origin, the maximum retail price etc. on all packaged imported items. Even
the low cost jute bags are also included in this list. In July 2002, this
requirement was made mandatory for all imported jute bags. At the time,
India used to import 90 per cent jute bags from Bangladesh. Due to this
requirement, the export of jute bags to India has significantly declined in the
past years. Moreover, India has recently imposed new tariffs on the import of
this product.

4. Bangladesh and India are members of the South Asian Free Trade Area
(SAFTA), signatories of Asia Pacific Trade Agreement (APTA), signed
Framework Agreement on BIMSTEC-FTA (BIMSTEC-Bay of Bengal Initiative
for Multi-Sectoral Technical and Economic Co-operation) and are members of
IOR-ARC (Indian Ocean Rim-Association for Regional Cooperation). Both
countries had agreed on preferential business relationship with reduced tariff
and reduction of non-tariff barriers. Bangladesh, India and Nepal recently
signed Sub-regional Motor Vehicle Agreement. Bangladesh has given full-
fledged transit in the region through all modes of transport, e.g. road, rail
and river to seven sisters in India.
According to SAPTA agreement, local content in the exported goods has to
be at least 50 per cent of free on board or f.o.b. value of the product in order
to receive preferential treatment / tariff concession. On the other hand, India
and Bangladesh signed BIMSTEC agreement, which underlines 30 per cent
value addition for exported products.
Under SAFTA, Bangladesh has secured a reduced sensitive items list and
accelerated duty-free treatment for almost all items. Still Bangladesh
experiences a modest level of nontariff barriers, and also a four per cent
import tax on the readymade garment products, rebated to domestic traders
from different states.
Bangladeshi exports to India are consumer goods like apparels, hosiery
products, knitwear, leather shoes, fruit juices, jams and pickles, fish and fish
products apart from raw jute and jute products etc. Both countries need to
work closely to overcome these barriers to export from Bangladesh to India.
MS Siddiqui is a legal economist
mssiddiqui2035@gmail.com