Bangladesh could become India’s fourth largest export destination in FY22, leapfrogging by five places in two years. This comes as India’s exports continue to benefit from its eastern neighbor’s economic progress.
Exports to Bangladesh increased by 81 percent to $7.7 billion in the first seven months of FY22, compared to the same period the previous year. After the United States, the United Arab Emirates, and China, it is India’s fourth largest export market.
If the current trend continues, Bangladesh’s ranking in India’s export profile will only improve from 5th last year, when it stunned observers by leaping from 9th in FY20.
With its astonishing development over the last decade, Bangladesh has become an economic miracle in South Asia, and it may soon exceed India in terms of per capita income.
Bangladesh’s prosperity is largely due to its success as a garment exporter, which accounts for around 80% of the country’s total exports. Remittances from abroad account for more than 6% of GDP.
Cotton ($2.1 billion), cereals ($1.3 billion), electricity and fuel ($0.6 billion), auto components ($0.5 billion), and machinery and mechanical appliances ($0.4 billion) are among India’s top exports to Bangladesh during April to October 2021.
India and Bangladesh are currently conducting a joint study to see if they can reach an agreement on a bilateral comprehensive economic partnership (CEPA).
The India-Bangladesh CEO Forum, which was established in December 2020 to provide policy-level insights in several areas of trade and investment as well as enable contacts between business groups, is set to meet shortly to further strengthen trade and economic ties.
Both parties stressed the importance of addressing non-tariff obstacles and trade facilitation in a joint statement issued following the virtual summit between Prime Minister Narendra Modi and his Bangladesh colleague Sheikh Hasina. Port restrictions, procedural bottlenecks, and quarantine restrictions are among them.
Bangladesh averted a recession in FY21, increasing at a rate of 3.5 percent, compared to India’s 7.3 percent contraction. Bangladesh’s GDP is predicted to grow at a rate of 5.5 percent in FY22 and 6.8 percent in FY23.