Nepal-Bangladesh Trade: Opportunity and Challenges

Biratnagar, 21 February: Nepal needs to revise its trade- and transit-related agreements with Bangladesh to address the growing complexities between two countries in their trade relations to benefit Nepalese exporters that see potential for their goods in the Bangladeshi market, according to the participants of an interaction programme titled "Nepal-Bangladesh Trade: Opportunity and Challenges" jointly organized bythe Ministry of Industry, Commerce & Supplies (MoICS); South Asia Watch on Trade, Economics and Environment (SAWTEE) and Morang Merchant Association (MMA) organized here today.

Hon’ble Minister Mr. Jagadish Prasad Kusiyat, Ministry of Industry, Tourism, Forest & Environment, Province 1 said that Bangladesh is an important trade partner of Nepal due to its proximity, but the trade potential is under-exploited and the province government is committed to improve Nepali exports to Bangladesh.

President of Morang Merchant Association Mr. Pawan Kumar Sarda said that Nepal’s duty for Bangladeshi products are less compared to the tariffs imposed by the Bangladeshi government for Nepali products. In addition, Nepali products face number of non-tariff barriers in Bangladesh due to which our export to Bangladesh is in decline while Bangladesh’s export to Nepal is increasing. He added that Nepal is importing goods which are domestically produced such as juice and potatoes, and suggested we stop importing such goods from Bangladesh.

Mr. Rabi Shankar Sainju, Joint Secretary, Ministry of Industry, Commerce & Supplies informed that the government is in process of renewing trade treaty with SAARC countries including with Bangladesh. He said that Nepal and Bangladesh have agreed to provide preferential market access to some of their identified products, and Nepal is in process of identifying such products to be included in the list.

SAWTEE Chairman Dr. Posh Raj Panday made a presentation on Nepal-Bangladesh trade relations and avenues for collaboration. He stated that Nepal’s trade with Bangladesh takes place through Trade and Payment Agreement between Nepal and Bangladesh; Transit Agreement between Nepal and Bangladesh, and also through the regional, sub-regional and multilateral/international agreements signed by the two countries. He pointed out that the Most Favoured Nation (MFN) treatment Nepal gets under these agreements is not adequate to address growing trade deficit with Bangladesh. He suggested to conclude a preferential market access agreement with Bangladesh to address market access issues—including transit, para-tariff and non-tariff barriers—for exportable products and protection of domestic sector/industry.

Mr. Himal Thapa, Trade Facilitation Advisor, at Nepal-India Regional Trade and Transport Project (NIRTTP) of the MoICS pointed out that for the smooth transit traffic to Bangladesh, tripartite transit agreement needs to be signed between Nepal, Bangladesh and India for rail and truck movement to each other’s countries. He also suggested establishment of institutional arrangements representing Nepal at the port and transshipment hub of Bangladesh, and added that Motor Vehicle Agreement between Nepal and Bangladesh needs to be finalized and signed.

Mr. Sarad Bickram Rana, Executive Director, Trade and Export Promotion Centre (TEPC) asked the entrepreneurs to come forward with concrete products to promote in the Bangladeshi market. Mr. Kishore Pradhan, Vice President of Federation of Nepalese Chamber of Commerce and Industries (FNCCI) stressed a strong need for identifying products with market potential in Bangladesh along with prudent negotiations with the Bangladeshi government for our easy access in their market.

Participants of the interaction suggested agricultural and dairy products such as spices, fresh fruits and vegetables, ghee are products with high export potential to Bangladesh. They also highlighted that their province—Province no. 1—can be the gateway to export trade with Bangladesh due to its proximity with Bangladesh. Participants also stressed the need to improve border customs in both sides and shortening the documentation process while exporting to Bangladesh. They also stressed the need for simplifying the visa obtaining process to go to Bangladesh without having to go to the Bangladeshi embassy in Kathmandu.

About 70 participants from Province 1 participated in the interaction.

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