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COLUMN

Trade: The case with India

HABIBULLAH N KARIM
The government last week approved a bilateral trade pact with India that has received a lot of media attention and which also has been at the centre of tea storms around the country.
Our relationship with our biggest neighbour has always been complex. From memories of the fateful partition of the sub-continent into a predominantly Hindu India and a predominantly Muslim Pakistan to India's decisive intervention in our war of liberation to subsequent lack of trust at the state level have not helped put at ease mutual suspicions and differences in perceptions from both sides of the border.
Having said that we must recognize that India shares borders with us on three sides west, north and east and the arteries of trade and commerce crisscrossed Bangladesh and many parts of India for centuries until they were rudely snapped in the sixties mainly due to political considerations. The situation is further exacerbated by the great social strain imposed on the Bangalee ethnic community of the sub-continent due to the political division of the then Bengal even before the sub-continent was parcelled out along religious lines in 1947.
The ethnic trauma of those epochal events have left such deep social scars that even the smallest religious slight often leads to tragedies involving loss of precious human lives.
In this backdrop, any engagement with our large neighbour is always seen with a pinch of salt. Based on what we see in the media it is a common perception that India (and sometimes less mighty neighbours) trample on our sovereign rights with impunity. The offshore oil surveys in recent months by India and Myanmar in our territorial waters is a case in point. It was also reported prominently in the media when the UN-Escap brokered Trans-Asian highway and railway projects did not accommodate Bangladesh's position primarily due to India's objections.
It is common knowledge that India has so far been inflexible in accommodating repeated pleas from Nepal to allow transit of goods to and from the ports of Bangladesh even though the UN charter mandates such provisions to land-locked countries such as Nepal.
Despite all these differences I highly commend the initiative of the present government to renew the trade pact with India. After all, economic and trade considerations have always been the prime mover of inter-
national relations, human goodwill and peace. Only when ideological considerations took precedence over economic ones that we saw a breakdown in trust between nations with tragic consequences of epic proportions. The twentieth century is full of such examples in all corners of the earth. However, negotiating trade pacts is a highly skillful and knowledge-intensive affair and should not be taken lightly. We must be fully prepared with facts and figures and position papers so that we do not find ourselves at the mercy of those we negotiate with. This is especially true when we deal with nations that are bigger, mightier and richer than us. Even being at the top of a rich and mighty nation, President John F Kennedy of the USA had this to say in his inaugural address on 20 January 1961: “Let us never negotiate out of fear. But let us never fear to negotiate”.
TYade between India and Bangladesh has consistently risen over the last twenty years with clear advantage to India. While Bangladesh has followed an open-door policy on imports from any country (the only exception being Israel which we do not yet recognize as a country), traders here often complain of draconian measures by India to stifle our exports to them. On the other hand, India seemed to have always seen Bangladesh's open-door import policy and liberal trade regime as a risk to its domestic producers.
The fact that Indian street corners are flooded with Chinese knick-knacks proves that such protectionist approaches are counter-productive and useless in this age of globlisation. In recent years India's gradual accommodation of RMG exports from
Bangladesh is a step in the right direction though it will not have a big impact on mitigating the trade imbalance. One sector that has the potential to narrow and even eliminate the trade gap is IT services.
India today exports more than 60 billion US dollars worth of IT services (software and IT enabled services), a substantial chunk of which is being delivered by Indian sub-contractors and off-shore service centres in far flung countries as far away as Romania and Mexico. The two governments can encourage and invite IT services entrepreneurs of their respective countries to form joint-ventures or consortiums to cater to a burgeoning world market for outsourced IT services. The current slowdown in the advanced economies of the world means that exporters to those countries have to look for ways to lower costs by tapping into larger IT labour pools, something Bangladesh can offer to such a partnership.
In the Saarc summit held in Dhaka in 2007, the Indian Prime Minister Dr Manmohon Singh declared that India would provide unilateral trade concessions to its Saarc neighbours and hoped that the other Saarc nations will follow suit. With Manmohon Singh still at the helm of the Indian government and our present government's gesture of goodwill towards our biggest neighbour, let us hope that increased trade relations with India and other neighbours will help heal the social strains bedeviling the ethnic bonds that were built over centuries.
The water is the founder CEO of Technohaven Company Ltd and is the current president of Bangladesh Association of Software and Information Services (BASIS). He welcomes feedback at hnkanm@gmail com.