Farrukh Khosru:
The economic relationship between Bangladesh and India’s North-East Region (NER) is set to expand as both regions explore avenues for stronger trade integration through improved connectivity, policy reforms, and cross-border investments. A recent survey of Bangladeshi and Japanese firms highlights both challenges and opportunities in boosting trade, revealing key areas for collaboration between governments and the private sector.
This underperformance is largely attributed to inadequate infrastructure, regulatory barriers, and inefficient customs procedures that drive up logistics costs.
Survey findings highlight key bottlenecks, including poor land port roadways, high duties on imported goods, and restrictions on coal transport, which inflate operational expenses. Bangladeshi businesses cite the absence of digital payment systems and high cross-border loan interest rates as major obstacles, while Japanese firms report documentation complexities and limited digital trade platforms.
Road, rail, and port infrastructure challenges further hinder trade expansion. Bangladeshi businesses report subpar logistics facilities, with 91.1 per cent citing poor transport infrastructure and 85.7 per cent flagging vehicle movement restrictions as primary concerns. Similarly, Japanese firms identify limited road access (66.7 per cent) and insufficient rail links (33.3 per cent) as major impediments.
Warehousing also remains an issue, with 83.9 per cent of Bangladeshi firms struggling with high storage costs, while 40 per cent of Japanese businesses cite inadequate storage conditions.
Despite these hurdles, the trade outlook remains optimistic. Nearly 65 per cent of Bangladeshi firms express interest in expanding operations in NER, compared to 40 per cent of Japanese companies. Key investment sectors include agriculture, eco-tourism, IT, and agro-processing.
Sylhet, a major tea-producing hub, could help meet growing NER demand, while Bangladesh stands to gain from importing petroleum, processed minerals, and fresh produce from India’s northeast. Public-Private Partnerships (PPPs) are seen as critical in closing infrastructure gaps, with Bangladeshi firms advocating skills transfer and Japanese firms prioritizing logistics and policy advocacy.
The Matarbari Deep Sea Port is expected to enhance trade efficiency by reducing export times, lowering costs, and facilitating cross-border movement. Strengthening regional cooperation through the Bangladesh-Bhutan-India-Nepal (BBIN) initiative and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is also seen as a key strategy to unlock trade potential.
Survey results outline key strategies to overcome trade hurdles such as infrastructure development that include enhancing road, rail, and port facilities to ease movement of goods, public-private partnerships in encouraging joint investment initiatives, particularly in logistics and warehousing, policy streamlining for simplifying customs procedures, harmonizing trade regulations, and reducing tariffs, technology adoption like expanding digital trade platforms to lower costs and accelerate transaction and sector-specific growth for promoting agro-processing, textiles, IT, and renewable energy collaborations.
By addressing trade barriers and embracing digital solutions, Bangladesh and NER can unlock significant economic potential. The development of Matarbari Port and regional frameworks like BBIN and BIMSTEC are expected to accelerate cross-border trade, bringing mutual economic benefits to both regions. With concerted efforts in infrastructure, policy reforms, and investment cooperation, Bangladesh and the northeast Indian states are poised for a new era of economic prosperity.