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Duty-free garment import from Bangladesh

Special Correspondent

Cabinet nod a gesture to Dhaka, which has huge trade deficit

Similar concession extended to Sri Lanka also
Deepen economic ties with Dhaka: Minister

KOLKATA: The Union Cabinet has approved duty-free import of eight million pieces of garments annually from Bangladesh, Minister of State for Commerce Jairam Ramesh.

A similar gesture was extended to Sri Lanka also. However, in this case, import of six million pieces would be duty-free and a preferential duty levied on the remaining two million.

Though garments come under the sensitive negative list as per the SAFTA (South Asian Free Trade Area) agreement, a special gesture was made to Bangladesh, which had a huge trade deficit with India, Mr. Ramesh said.

Indian exports to Bangladesh in 2007-08 were estimated at $1.8 billion, while imports might be around $ 250 million.

“I have always felt the need to deepen the economic engagement between India and Bangladesh.”

The Centre recently allowed foreign direct investments through the FIPB (Foreign Investment Promotion Board) route in Bangladesh (on a case-by-case basis). The Minister favoured a similar treatment for Bangladeshi investors in India.

Entrepreneurs from that country in the sectors of pharmaceuticals, food processing and textiles were keen on setting up units in the northeast.

Corrective measures

Pointing out that the trade imbalance could be corrected in the long-run if Indian companies set up units in Bangladesh, using that as a manufacturing base for exports back to India, Mr. Ramesh said that in the short-run steps such as duty-free garment exports would boost Bangladesh’s exports by $ 60 million-70 million annually.

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