Economic Scenario of Bangladesh:
Bangladesh continues to remain one of the fastest growing economies in South Asia. As per Asian Development bank (ADB)’s Asian development Outlook, 2019, Bangladesh’s GDP growth is expected to accelerate from 7.1% in 2016 to 8% in 2019. Similarly its per capita GDP growth is also expected to accelerate from 5.7% in 2016 to 6.7% in 2019. In fact Bangladesh remains the fastest growing economy in the SAARC region.
In the World bank’s ‘The Bangladesh development Update, 2019’, demand side factors such as increase in increase in private consumption due to increase in export-oriented earnings and remittances have been termed as the major reasons behind this rapid growth. A steady growth in industries especially export-oriented ones have also contributed significantly for economic development of the country.
India and Bangladesh: Bilateral Trade & Economic Ties:
In terms of merchandise trade, India’s total trade with Bangladesh increased from USD 6.65 billion in 2013-14 to USD 9.29 billion in 2017-18 registering a growth of 39%. In 2018-19 (April to Feb), India’s total merchandise trade with Bangladesh remained at USD 9.033 billion. It is India’s 26th largest trading partner globally and largest trading partner in SAARC.
In terms of engineering trade, India’s total trade with Bangladesh stood at USD 2.23 billion in 2017-18, registering a growth of 24%. In 2018-19 (April to Feb), India’s total engineering trade with Bangladesh increased to USD 2.8 billion. Between 2016-17 and 2017-18, India’s exports to Bangladesh grew by 24.1% from USD 2.13 billion to USD 2.65 billion. In 2018-19 (Apr to Feb), India’s exports to Bangladesh increased to USD 2.69 billion.
The two countries are signatories to various trade agreements including SAFTA or South Asian Free Trade Agreement and Asia Pacific Trade Agreement (APTA) and the Agreement on South Asian Free Trade Area (SAFTA) which govern the tariff regimes for trade. Under SAFTA, India has granted duty free quota free access to Bangladesh on all items except alcohol and tobacco. Total Indian investment proposals in Bangladesh registered with the Bangladesh Investment Development Authority (BIDA) exceed US$ 3 billion. Cumulative FDI from India to Bangladesh has doubled from USD 243.91 million in 2014 to USD 539.91 million in June 2018. Indian companies have invested in various sectors including telecommunications (Airtel), pharmaceuticals (Sun Pharma), FMCG (Marico) and automobiles (Tata, Hero Motors) sectors in Bangladesh. In 2018, Bangladeshi Prime Minister announced that three Bangladeshi SEZs have been earmarked for India. These have been notified and once operational will encourage Indian companies to manufacture their products in Bangladesh and export them back to India.
Pharma Machinery and Medical Devices: India’s Exports to Bangladesh Trends:
|Product Category||2018-19 (April to Feb), USD Mn||2017-18, USD Mn||2016-17, USD Mn||Growth (2017-18 and 2016-17)|
From the above table it is evident that India’s exports of both pharma machinery and medical devices experienced an increase from 2016-17 to 2018-19.