Suresh Prabhu pitches for free trade pact with Bangladesh

Commerce Minister Suresh Prabhu today made a strong case for the Comprehensive Economic Partnership Agreement (CEPA) with Bangladesh, saying it would boost trade in the South Asia region.

"With Bangladesh, we already proposed that we should try to sign a comprehensive economic partnership agreement and now we are going to start working on that and Bangladesh and India will actually take it forward," Prabhu said at a conference.

The CEPA is a free-trade agreement under which two trading partners eliminate basic customs duties on a maximum number of goods traded between them. Besides, both sides liberalize norms to promote trade in services and investments.

Prabhu, who returned from his trip to Bangladesh on Friday, said India has also proposed a comprehensive economic partnership agreement with Sri Lanka and is trying to push trade with African countries, terming it far below potential.

The Commerce Ministry earlier this week said that considering the vision of Bangladesh to become a middle-income country by 2021 and a developed country by 2041, both ministers agreed that a CEPA covering goods, services, and investment would provide a sound basis for substantial enhancement of trade and commercial partnership.

The minister said both countries have agreed to upgrade trade logistics for seamless movement of cargo.

Elaborating on his trip to Bangladesh, Prabhu said he has proposed the development of Sunderbans, mangrove forests lying between the two countries, as a global tourist destination.

"We have decided to upgrade the logistics on either side so that movement of cargo will happen. There are certain issues. At one point the cargo had been held up for a long time so we have decided that from October 15 we will provide a one-time push and clear this backlog," Prabhu said.

The minister said he had invited the Bangladesh commerce minister and senior officials next month to identify the opportunities of investment from India to Bangladesh.

He said India was willing to invest into R&D for value addition to jute, a natural fiber crop produced by both India and Bangladesh, as it has immense job creation potential for the garment industries of the two neighbors.

India is willing to invest into R&D. We have almost USD 8 billion credit line with Bangladesh. We can use part of that for making this happen and we can actually promote this.

He said India would be willing to engage with its South Asian neighbors to reap the advantages emanating from similar agro-climatic conditions, topography and crop cultivation.

"On October 8, we will have a major meeting with West Africa. We have already done that with Southern Africa and East Africa, later in November-December we will do Northern Africa.

"India's exports to Africa is only 8 percent. Can you imagine, with a population as big as India, with 54 countries in the African Union, our exports to Africa is only 8 percent so we are trying to push that," Prabhu said.