Economic scenario of Bangladesh

Bangladesh has been among the fastest growing economies in the world as well as in the South Asia over the past decade. It is classified among the emerging market middle income economies supported by a demographic dividend, strong ready-made garment (RMG) exports, remittance and stable macroeconomic conditions. Bangladesh Government took twin policy initiatives -- 'Vision 2021' and 'Digital Bangladesh' envisages Bangladesh becoming a more developed nation by 2041

During Covid-19 lockdowns, Digital Bangladesh played a key role in ensuring service continuity in healthcare and education, commerce and trade, social safety net payments for the new poor, grievance redress creating a path towards a strong economic recovery from the COVID-19 pandemic

Bilateral Trade : India & Bangladesh

Bangladesh is India's biggest trade partner in South Asia and India is the second biggest trade partner of Bangladesh after China. Bilateral trade between India and Bangladesh has grown steadily over the last decade. In the FY 2021-22, India's exports to Bangladesh were $16.1bn and imports were $2.0bn, witnessing a positive trade balance to the extent of $14.2 bn.

Binding two Southeast (Myanmar, Thailand), and five South Asian (Bangladesh, Bhutan, India, Nepal, Sri Lanka) together, BIMSTEC has been a preferred platform for regional cooperation in South Asia and revitalizing India's regional cooperation in the Bay of Bengal region along with deepening its relations with ASEAN. The COVID-19 pandemic further increased the opportunity for India to collaborate with its neighbours rigorously providing a new dimension to India's Neighbourhood First and Act East Policy in the upcoming years.

On the other hand, India also seeks a comprehensive free trade agreement with Bangladesh prioritizing some of the focus areas including uninterrupted supply chain, joint production of defense equipment, and pharmaceuticals. Both the countries will soon finalize a joint study on the proposed bilateral free trade agreement, aimed to boost economic ties as discussed during secretary level talks.

Engineering trade: India and Bangladesh

In case of engineering products, Bangladesh is the ten largest export destination for Indian engineering products with a share of around 2.6 percent in India's global engineering exports. During 2021-22, India's engineering exports to Bangladesh reached US$2929 million compared to US$ 2088.7 million in 2020-21, registering a growth of more than 40%. Despite of Bangladesh being one of the top ten export destinations there is ample scope for India for increasing its share in Bangladesh's import considerably. Among the top engineering exported products to Bangladesh, auto components and parts, industrial machinery, iron and steel, electrical machinery, medical equipments constitute a major share.

In case of medical equipment and parts which is the focus product of the Bangla MedExpo, India's export to Bangladesh estimated at US$26 million in 2021-22 compared to US$ 19.6 million in 2020-21, registering a growth of 32%.

Opportunity for Indian Engineering Industry

Indian pharma exports witnessed a growth of 103% since 2013-14, from Rs. 90, 415 Crores in 2013-14 to Rs. 1,83,422 Crores in 2021-22 (source: PIB data). The exports achieved in 2021-22 are the Pharma Sector' best export performance ever. It is a remarkable growth with exports growing by almost USD 10 billion in 8 years. Rather India has been serving as one of the strongest pharma-economy across the world. The country has emerged as single point resource for Pharma Machineries and Engineering Equipment in the world pharma markets. Indian pharma companies enabled by their price competitiveness and good quality, have made global mark, with 60 per cent of the world's vaccines and 20% of generic medicines coming from India.

Despite having enormous potential for local manufacturing, Bangladesh's medical device market is heavily dependent on imports. Lack of skilled manpower, price competitiveness, high cost of raw materials and limited research & development are some of the key challenges for local manufacturers. There is ample scope for India for increasing its share in Bangladesh's import considerably and an FTA in place will surely help India to achieve so. Further the recent India–Bangladesh CEPA trade talks is expected to open up new economic opportunities including connectivity, new market and cooperation and partnership giving significant boost to two way trade.