Close neighbours Bangladesh and India have been interested for a long time in signing the Comprehensive Economic Partnership Agreement (CEPA) to balance trade between the two countries and ensure a year-round supply of essential goods from India to Bangladesh.
However, despite Bangladesh's progress in this regard, the matter has been stalled for years on the Indian side. But the CEPA matter is now set to gain some ground as it has been made a priority on the list of agenda during Prime Minister Sheikh Hasina’s visit to India on Friday and Saturday, according to sources of concerned ministries.
India’s Ministry of External Affairs (MEA) on Thursday formally announced that Sheikh Hasina will pay a state visit to India on June 21-22 at the invitation of Prime Minister Narendra Modi.
This will be the first bilateral state visit after the formation of the government in India following the 18th Lok Sabha elections, according to MEA.
During the visit, apart from holding bilateral consultations with Modi, Prime Minister Hasina is scheduled to call on President Droupadi Murmu and Vice President Jagdeep Dhankhar. External Affairs Minister S Jaishankar is also scheduled to call on Prime Minister Hasina.
Sheikh Hasina was among the international leaders who attended the swearing-in ceremony of the Indian prime minister and the Union Council of Ministers on June 9.
Officials said Bangladesh and India are likely to sign a dozen bilateral instruments with some new initiatives by identifying new areas of cooperation during Sheikh Hasina’s state visit.
Sheikh Hasina and her Indian counterpart Narendra Modi will hold a top-level meeting in Delhi on Saturday. The meeting is likely to carry some directives giving a picture of greater cooperation between the two countries in the future.
Sources at the foreign and commerce ministries have said that economic cooperation, connectivity and energy issues will be given priority at this meeting.
A senior commerce ministry official, requesting anonymity, told The Business Post that Bangladesh has made significant progress on CEPA but there has been no progress from India's side. “Despite repeated requests, they did not do much about CEPA. But the matter may make some progress at the meeting of the prime ministers.”
The official said, “This agreement is very important for us because if it’s signed, Bangladesh will get a year-long supply guarantee for some essential products. But the problem is that the agreement is important for Bangladesh and not for India. Still, we want to make progress on the agreement so that India starts formal discussions soon.”
According to commerce ministry sources, Bangladesh has already formed a trade negotiation team in this regard. India has been informed about it and asked to form a team as well but they are yet to do it.
Trade between Bangladesh and India has now crossed $1.4 billion. Although Bangladesh's exports have increased, bilateral trade heavily depends on India. Access of Bangladeshi products to the Indian market has been granted but there are still tariff and non-tariff barriers.
To solve these problems, it is expected that the start of CEPA negotiations will be announced at this bilateral meeting. Officials concerned believe that if CEPA is signed, the way to balance the trade between the two countries would become smoother.
Bangladesh is hopeful of getting India's guarantee to ensure the supply of seven essential products around the year through the agreement since the neighbouring country has shown interest. Bilateral negotiations for signing the agreement will also start.
During the term of former commerce minister Tipu Munshi, the two countries held a virtual meeting at the commerce secretary level in August 2023 regarding the assessment of Bangladesh's demand and India's guarantee.
After that, when Prime Minister Hasina went to New Delhi to attend the 18th G-20 Summit on September 9 and 10 last year, she held talks with Modi on various issues including the assurance of CEPA signing and its progress.
Initial discussions on this issue were held during the visit of Prime Minister Hasina. India was also urged to ensure the supply of food products.
According to the joint statement issued following her visit, India said that Bangladesh's request would be positively considered based on the existing supply situation and every effort would be made in this regard.
Former commerce minister Tipu also visited India in December last year and formally presented the import demand to the country’s government.
At the time, based on the demand, Bangladesh sought a guarantee from India on the supply of essential products throughout the year, including 4.5 million tonnes of wheat, 2 million tonnes of rice, 1.5 million tonnes of sugar, 10,000 tonnes of garlic, 7,00,000 tonnes of onions, 1,25,000 tonnes of ginger and 30,000 tonnes of lentils.
India later advised Bangladesh to review several figures, saying some of them were too high — such as 4.5 lakh tonnes of wheat. In this context, India said that currently, they are supplying around 7,00,000 tonnes of wheat on average per annum.
Later, the commerce ministry formed a five-member committee to find out the actual demand for wheat, rice and sugar in the country in the last decade and the local production and import figures, especially the actual demand for imports from India. This committee later submitted the revised figures to the ministry.
According to ministry sources, India has shown interest in entering an agreement on seven essential products. Since the agreement is not yet finalised, it has not been determined how much the government will import from India and how much private importers will bring in.
Once the agreement is finalised, the prices and quantities for the public and private sectors will be determined, they said.
Bangladesh has to import about 6.5 million tonnes of wheat annually from other countries, especially Russia and Ukraine, to meet the domestic demand.
However, the supply chain was disrupted and prices increased worldwide after Russia invaded Ukraine on February 28, 2022. The war, which is still going on, even made the availability of wheat uncertain.
This led the government to take initiatives to ensure the supply of seven essential food items to avoid any possible crisis amid the ongoing economic uncertainty.
