Dhaka, April 2:

Duty free access of 91 new products to the Indian market and elimination of some non tariff barriers has helped Bangladesh close its trade deficit gap with India.

Bangladesh’s trade deficit with India inched up by 13.23 per cent in the first half of the current fiscal year (July 1, 2005, to June 30, 2006) from that of July-December in fiscal 2004-05.

However, according to official statistics, the country’s exports to India in the first half of fiscal year 2006 posted an encouraging 42 per cent rise from the corresponding period of fiscal year 2005, compared to a 14.85 per cent rise in imports from the neighbour.

“Huge quantities of Indian goods also get smuggled into Bangladesh regularly that many a businessman reckons are equal, if not more, in worth to the legal imports,” The Daily Star reported, quoting commerce ministry sources. Bangladesh’s export to India in July-December 2005 was $105 million compared to $74 million in the first half of fiscal year 2005. On the other hand, its import from India in July-December fiscal year 2006 was $1.18 billion, or about $170 million higher than the $1.01 billion import in July-December fisca year 2005.

So, the country’s trade deficit with India in the first half of fiscal year 2006 was $1.07 billion, compared to $945 million in the corresponding period of fiscal year 2005, the newspaper reported.

Of the products enjoying duty-free access, readymade garments, polythene sheets, plastic hangers, toiletries, glasses and machine parts have contributed most in the export growth.

Battery, raw jute, jute goods, Jamdani sari, hilsa fish and chemical fertiliser also saw increased entrance to the neighbouring market, the sources said.

The issue was high on the discussions during the recent visit to India of prime minister Khaleda Zia. She sought duty-free access of more Bangladeshi products from the Indian government to reduce the huge bilateral trade gap. To achieve that, New Delhi suggested signing a free trade agreement.

Sources said, some non-tariff barriers like mandatory testing required by India, inadequate banking facility and poor infrastructure at land ports are also hindering the country’s export growth to India.

The country’s export earning from India was $144 million in fiscal year 2005, $89 million in fiscal year 2004 and $84 million in fiscal year 2003. Its import from India was $2.03 billion in fiscal year 2005, $1.59 billion in fiscal year 2004 and $1.35 billion in fiscal year 2003.