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Economists and businessmen reacted to this cautiously.
India will get some connectivity with its northeastern states, starting with Tripura, as Dhaka has agreed to let India use the Ashuganj river port for goods transport toTripura.
Despite being India's neighbour, only 1 percent of the country's imports are from Bangladesh whereas nearly 20 percent of Bangladesh's imports come from India. Bangladesh blamed non-tariff barriers (NTBs) and a large negative list of products imposed by India for its poor export figure.
Amid this one-sided business, trade experts and businessmen are in doubt whether the Indian offer of connectivity with Nepal and Bhutan ^Nouldworkornot.
• Abdul Hafiz Chowdhury said Bangladesh's trade with Nepal and Bhutan did not work because of NTBs imposed by India.
"We have to take clearance from seven agencies of India for trading with Bhutan. Moreover, the transit point in India is not developed, which pushes the cost up," he said, adding that loading and unloading of goods from trucks also consume huge time.
Mir Nasir Hossain said, "We could not utilise the connectivity with Nepal and Bhutan effectively because of time limitation on Indian soil and restriction on trucks' movement."
Prof Mustafizur Rahman said, "Withdrawal of NTBs is vital to boost intra-regional trade." He said only a comprehensive plan could address the issue of NTBs and other tariff-related problems.
Although the proposed connectivity with Nepal and Bhutan is nothing new, this time it has come from India as a formal proposal, the trade expert said. "Bangladesh will have the chance to revive the Mongla Port if it is really con-nected with Nepal and Bhutan," he added.
Abdul Hafiz said the mindset of India has to change for mutual cooperation. Citing the example of duty-free export of eight million readymade garment products to India, he said, "It takes almost 18 percent duty to export those garment products."
Mustafa K Mujeri said besides removal of NTBs, huge investment in infrastructure is needed to utilise this connectivity for mutual economic benefit. Involvement of Bhutan and Nepal in the process is also necessary, he added.
The experts stressed the need for the connectivity, which could revive the Mongla Port.
"Bhutan, Nepal and seven northeastern states of India are fully land locked. These countries have no outlet and only Bangladesh can provide that outlet," said Dr Rahamatullah, former director (transport) of UN ESCAP.
On designating Ashuganj as a new port of call under the Inland WaterTYansit and Trade Agreement, he said it would enhance bilateral trade. He pointed out that currently there are four ports for use under the agreement.
Mir Nasir, however, said by allowing India on river routes up to Ashuganj, Bangladesh might lose its market opportunity in the seven northeastern Indian states. "Now India can easily carry its goods from Ashuganj to Agartala and other states through the proposed railway link," he said.
Abdul Hafiz echoed the view.
Mustafizur Rahman said, "It will be an advantage for India if it can transport goods from Ashuganj to its territories."
The foreign minister level meeting also agreed to reopen the Sabroom-Ramgarh trade point and the land route at Demagiri-Thegamukh on the Mizoram border for bilateral trade. India has also offered Bangladesh to provide 100MW electricity.
Manzur Ahmed, a trade expert and an adviser of FBCCI, urged the government to sit with businessmen and experts before taking decisions on those issues.
Previously on April 2,1976, Bangladesh and Nepal signed a transit agreement without incorporating any provision for using the territory and ports and routes for entry and exit for Nepalese vehicles, which made the agreement almost non-functional.
A trade agreement between Bangladesh and Bhutan was also signed in 1980, but in the absence of a passage through Indian territory, the agreement could not be implemented. Later, a protocol on trade and transit agreement with India allowing passage through its territory made the trading between the two close neighbours possible.
Although South Asian countries formed the Saarc two and a half decades ago, integration between the countries is one of the poorest in the world. Intra-regional trade is still limited to 5 percent. Experts quite often blamed political mindset for this poor integration.
For years, Bangladesh has been suffering a significantly large trade deficit with India. According to data available. Bangladesh's export to India in 2008-09 fiscal year was only $276 million against India s $2.8 billion export to Bangladesh, which was $3.38 billion in 2007-08 fiscal year.