Dhaka: Bangladesh has signed an agreement with India to export garments worth $40 million (Rs160 crore) annually without paying duty across the border, in an effort to reduce the huge trade gap between the two neighbouring countries.
“I think perhaps this is an important milestone in the trading relationship of the two countries,” Indian High Commissioner Pinak Ranjan Chakravarty said after the agreement was signed on 16September.
Under the deal, Bangladesh will export 8 million pieces of garments to India every year, officials said. The first consignment of readymade garments would be sent to India in January 2008, they said.
Bangladesh, which has a $2 billion trade gap with India, exports nearly $9 billion worth of textiles every year, mainly to US and European Union.
Bangladeshi exports to India totalled just over $250 million in the last fiscal year to the end of June 2006, which is about 2.4% of total exports.
Bangladesh is keen to tap into India’s fast-growing economy, which expanded 9.4% in the year to the end of March, which is its fastest growth in 18 years.