Transcript Assessment of Bangladesh-India Trade Potentiality Need for

Stakeholders’ Conference
Kolkata; 16 November, 2013
Presentation by
Dr K G Moazzem
Additional Research Director
Centre for Policy Dialogue (CPD)
Bangladesh
Contents
1.
2.
3.
4.
5.
6.
Ongoing Studies: Goals and Objectives
Key findings from the first phase of the study
Need and rationale for the second phase of the study
How to/why push the agenda for cross-border transport
facilitation and mutual recognition of standards
The Expected outcomes/benefits
Outline of a model to quantify the benefits accruing from
cross-border trade facilitation
2
1. Ongoing Studies: Goals and Objectives
 Two studies are being carried out by CPD and CUTS
 Study on “Addressing SPS issues and concerns in
Bangladesh-India Trade: Design of a Draft SPS
Agreement”
 Study on “Assessing Benefits of Trade Facilitation
through Bangladesh India MVA”
 Study on SPS Issues: Goals and Objectives
 Identify SPS related concerns
 Prepare mechanism for SPS related dispute settlement
 Prepare draft SPS agreement
 Come up with a framework for MRA
 Suggest actions for enforcement of the agreement
3
1. Ongoing Studies: Goals and Objectives
 Study on “Assessing Benefits of Trade Facilitation
through Bangladesh India MVA”: Goals and Objectives
 Review the proposed MVA
 Analyse the current state of transport of goods
 Analysis the economic benefits of signing an MVA
 Recommend initiatives and actions for operationalising
the MVA
4
2. Key Findings from the First Phase of the Study
Bilateral Trade between Bangladesh and India
 Accelerated bilateral trade between Bangladesh and India over the years
 Rising share of Bangladesh’s export to India; mixed trend in case of India’s export to
Bangladesh
 Volume of trade: US$5.5 billion in 2012; large flow of goods from India
 Bilateral trade between India and Bangladesh has experienced more fluctuations
vis-à-vis those of their global trade indicating lack of consistent demand
 Opposite trends in India and Bangladesh in case of export concentration particularly
since 2007 (SAFTA)
 Gradual deceleration in concentration in Bangladesh’s export and further
concentration in India’s export
 No. of Bangladesh’s exported products has significantly increased (from 145 in 2001 to
583 in 2012)
Bangladesh-India Trade: 2001-2012
Bangladesh's export
Bangladesh's export to India
Share of Bangladesh's export to world
Share of top 10 products
India's export
India's exports to Bangladesh
Share of India's world export
Share of top 10 products
Source: UNCOMTRADE Database, 2013
2001
2006
2010
2011
2012
64122
86.0
223813
1.91
57.1
357896
1.79
57.6
579125
2.20
65.9
567307
2.14
65.2
1063046
2.42
15.6
1667809
1.38
13.2
3016575
1.37
30.7
3405516
1.13
32.1
4936672
1.70
37.8
5
1. Key Findings from the First Phase of the Study
Products Traded between Bangladesh and India
 Agricultural products, raw materials and intermediate products comprise a
major share in Bangladesh’s export
 Jute, sacks & bags, nuts edible, fresh or dried, yarn of jute or of other textile bast
fibres, fish nes, fresh or chilled, light petroleum oils and preparatiols, waste and
scrap, copper or copper alloy, mens/boys shirts, of cotton, cereal bran, anhydrous
ammoni, portland cement, mens/boys trousers and shorts
 Import from India comprises raw materials, intermediate products: Cotton,
Telephones for cellular networks mobile telephones, Hot roll iron/steel nes,
coil, Denim fabrics of cotton, Woven fabrics, Polyethylene terephthalate,
Reactive dyes, Flat rolled prod,i/nas,plated or coated and Parts for diesel and
semi-diesel engines
 Northeast Indian states import about 12% of Bangladesh’s export to India
and export about 2.6 % of Bangladesh’s import from India
Major Traded Products with North East India
Major Import Items
Rice, Coal, Agarbati, Bamboo,
Natural slab, Fruit, Ginger, Spices,
Motorcycle parts, Spare of tractor,
Sanitary ware, Fabrics, Watch
Source: Rahman (2012)
Major Export Items
RMG, Cement, Pharmaceuticals, Ceramic tiles,
Hosiery, Food Products, Bleaching powder, Sari, Poly
Fabric, Cotton waste, Glass sheet, Fish, Lichi, Brick,
Furniture, Plastic products, Battery, Molasses.
6
1. Key Findings from the First Phase of the Study
• Bilateral Trade Potentials
• Bangladesh possess significant export potentials to the Indian market.
• A number of existing exported products very less potentials to export (including jute, jute
yarn, fish, cereal bran, port land cement, crushed stones, vegetable fats)
• Trade Potentiality is rather high in less traded non-traditional products (bicycles, footwear,
plastic wastes, apparels, leather products, cargo vessels): Less of agricultural products
• India has significant export potentiality to Bangladesh’s market: a number of existing traded
products have limited trade potentials
• About 1278 out of 3894 products have trade potentials of at least US$ 1 million
• A number of studies have examined trade potentiality between Bangladesh and India under
different trade scenario (under SAFTA framework; RCA analysis): Mustafiz et al., 2010; De, Selim
and Kathuria, 2012; World Bank, 2013)
Indicative Potentials of Export of Major Bangladeshi Products to India
2001
'530310
'630510
'080290
'530710
'030269
'271011
'740400
'620520
'230240
'281410
'252329
'620342
'720421
'251710
'151590
'520841
'531010
'999999
'631010
'400121
Jute and other textile bast fibres, raw or retted
Sacks & bags,for packg of goods,of jute or other textile bast fibres
Nuts edible, fresh or dried, whether or not shelled or peeled
Yarn of jute or of other textile bast fibres, single
Fish nes, fresh or chilled excl heading No 03.04, livers and roes
Light petroleum oils and preparations
Waste and scrap, copper or copper alloy
Mens/boys shirts, of cotton, not knitted
Cereal bran, sharps and other residues nes, pelleted or not
Anhydrous ammonia
Portland cement nes
Mens/boys trousers and shorts, of cotton, not knitted
Waste and scrap, stainless steel
Pebbles, gravel, broken or crushed stone used for aggregates
Veg fats&oils nes& their fractions, refind or not but not chemically mod
Plain weave cotton fabric,>/=85%, not more than 100 g/m2, yarn dyed
Woven fabrics of jute or of other textile bast fibres, unbleached
Commodities not elsewhere specified
Used or new rags of textile materials, sorted
Natural rubber in smoked sheets
26.0
29.1
0.2
0.3
9.5
0.0
0.0
0.6
0.0
17.9
0.0
0.0
0.0
0.0
0.0
0.0
2.1
0.2
0.0
0.0
2006
16.0
6.7
2.5
3.5
6.3
5.4
0.7
0.1
0.0
16.0
0.5
0.0
1.0
1.1
0.0
0.0
1.2
0.5
0.2
0.0
2010
12.3
12.1
5.6
5.5
10.4
7.0
3.5
0.2
0.6
0.4
6.0
0.7
3.3
2.4
0.3
0.0
3.5
0.0
0.7
0.2
2011
16.4
10.0
7.4
6.3
14.9
5.8
2.8
0.3
0.6
1.4
3.4
1.1
2.3
1.8
2.1
0.1
1.0
0.8
0.3
0.9
2012
13.0
12.1
10.4
7.1
5.9
3.6
3.4
3.3
3.2
2.9
2.8
2.4
2.0
1.7
1.7
1.6
1.6
1.2
1.1
1.0
Trade potentials2012
22
3144
51
18
38
17200
25635
18283
0
6423
1
27803
2525
0
0
191
1515
118365
1003
122
7
1. Key Findings from the First Phase of the Study
India’s export potential in 2012
Bangladesh’s export potential in 2012
Product
code
Product label
Bangladesh’s
export potential
in 2012
TOTAL
All products
'999999
Commodities not elsewhere specified
Bicycles and other cycles (including delivery
tricycles),not motorised
Footwear, outer soles of rubber/plastics uppers
of leather, nes
118365
Plastics waste and scrap nes
Footwear o/t sports,w outer soles of
rubber/plastics&uppers of tex mat
Mens/boys trousers and shorts, of cotton, not
knitted
Leather "incl. parchment-dressed leather" of the
portions, strips or s
40393
25635
'240120
Waste and scrap, copper or copper alloy
Tobacco, unmanufactured, partly or wholly
stemmed or stripped
'300490
Medicaments nes, in dosage
23511
'631090
22227
'890190
Used or new rags of textile materials, not sorted
Cargo vessels nes&oth vessels for the transport
of both persons&goods
'271019
Other petroleum oils and preparations
18669
'620520
Mens/boys shirts, of cotton, not knitted
18283
'871200
'640399
'391590
'640419
'620342
'410799
'740400
25924109
41601
41285
31393
27803
26011
24187
19488
'271019 Other petroleum oils and preparations
'520100 Cotton, not carded or combed
'999999 Commodities not elsewhere specified
Telephones for cellular networks mobile telephones
'851712 or for other wirele
'720839 Hot roll iron/steel nes, coil >600mm x <3mm
Denim fabrics of cotton,>/=85%, more than 200
'520942 g/m2
Woven fabrics,>/=85% of textured polyester
'540752 filaments, dyed, nes
'390760 Polyethylene terephthalate
'320416 Reactive dyes and preparations based thereon
Flat rolled prod,i/nas,plated or coated with
'721049 zinc,>/=600mm wide, nes
'840999 Parts for diesel and semi-diesel engines
Machines for the reception, conversion and
'851762 transmission or regeneratio
'550320 Staple fibres of polyesters, not carded or combed
Semi-fin prod, iron or non-alloy steel, cntg by wght
'720719 <.25% carbon, nes
Zinc not alloyed unwrought containing by weight
'790111 99.99% or more of zinc
Copper cathodes and sections of cathodes
'740311 unwrought
Chickpeas, dried, shelled, whether or not skinned or
'071320 split
Flat rolled prod,i/nas,painted,varnished or plast
'721070 coated,>/=600mm wide
Articles of jewellry&pt therof of/o prec met w/n
'711319 platd/clad w prec met
Potential
in 2012
1765942
404958
271226
255964
204304
128171
110236
108109
105406
104121
99979
94381
91983
91754
91646
82049
81364
80166
79949
8
1. Key Findings from the First Phase of the Study
2. Trade Cost in connection with Bangladesh-India Trade
• Trade costs between India and
Bangladesh is still very high
although it has declined
• Trade cost in countries outside
the region particularly with key
destinations is rather low
• Better trade connectivity
through sea route
• Import tariff on Indian products
is guided by SAFTA rules for
products originating from
developing countries
• 993 products under SAFTA
sensitive list
• Moazzem- Kishore (2013)
suggested a mechanism to
prune the SAFTA sensitive list.
Trade Cost
reporter
Bangladesh
Bangladesh
Bangladesh
Bangladesh
Bangladesh
Bangladesh
Bangladesh
Bangladesh
Bangladesh
partner
India
India
India
India
India
India
India
India
India
year
2005
2006
2007
2005
2006
2007
2005
2006
2007
sector
Agriculture, hunting, forestry; fishing
Agriculture, hunting, forestry; fishing
Agriculture, hunting, forestry; fishing
Manufacturing
Manufacturing
Manufacturing
Total Goods
Total Goods
Total Goods
Trade costs
130.1
129.0
121.5
123.1
120.9
113.4
125.2
122.8
114.4
Source: World Bank, 2013
India’s export to Bangladesh, 2012
Range of import tariff
No of products
% of total products
0
241
5.6
0.01-4.9
103
2.4
5.0-8.0
990
22.8
8.1-11.9
131
3.1
12.0-17.9
1037
2.9
18.0-22.1
65
1.5
22.2-24.6
820
18.9
25.0
750
17.3
Unidentified
202
4.7
Total
Source: UNCOMTRADE, 2013
4339
100.0
9
1. Key Findings from the First Phase of the Study
2. Trade Cost in connection with Bangladesh-India Trade
 Bangladesh’s entrepreneurs often complain about beyond the border taxes/cess/levies in








India. These duties include:
Additional Duty (Countervailing Duty) (CVD): This additional duty is levied under section 3
(1) of the Custom Tariff Act and is equal to excise duty levied on a like product manufactured
or produced in India (generally ranging between 4% to 8% of assessed value).
Secondary and Higher Education Cess: 2% and 1% respectively on customs duties(CD+CVD).
Additional Excise Duty: 4%, paid at customs point but rebatable when VAT is paid.
Total tax incidence could vary between 8.3% to 12.7% (4.4% to 8.6% if additional excise
Duty is excluded).
However, it needs to be pointed out that Indian producers are also subject to these taxes It is
unlikely that Bangladeshi exporters will receive more favourable taxes treatment than the
Indian producers.
However, Bangladesh has a strong case for withdrawal of the additional excise duty which is
eligible for duty drawback at the time of payment of VAT.
Bangladesh could argue for withdrawal of additional duties on the following grounds:
– Importers tend to set price for items imported from Bangladesh by taking into cognisance
the duties paid at the customs point, which make Bangladeshi goods less competitive.
A part of importers’ capital is stuck on account of duties paid.
10
1. Key Findings from the First Phase of the Study
NTBs in Bilateral Trade
 A survey of NTBs reported by
SAARC member countries to the
Committee of Experts (CoE)
shows that most frequently
imposed NTBs in the SAARC
countries relate to
 SPS; TBT; Quotas;
Antidumping measures ;
License requirements ;
Countervailing measures
 The overwhelming majority of
NTBs indeed relate to
compliance with SPS and TBT
requirements.
Major NTBs in SAARC Region
Types of NTBs
SPS, TBT, and Other Related
Measures
% of total
no. of
NTBs
86.3
Tariff Quota
Anti Dumping Measures
Source: Mustafiz (2012)
License Requirement
9.8
47.4
Countervailing Measures
1.2
5.3
11
1. Key Findings from the First Phase of the Study
NTBs: Complaints and Responses Submitted at the Meeting of CoE
Exporting Country: Bangladesh; Responding Country: India
Type of NTB
Detailed product information (all prepackaged goods)
Bio-security and sanitary permit (Primary agricultural
products)
Compliance of Food Adulteration Act regarding shelf life of
goods (processed food products)
Special labeling of country of origin (jute Special labeling of
country of origin (jute bags/sacks)
Response from India
These are statutory requirement under the Consumer Protection Act.
Requirement has been set as per Articles 2 of the Agreement on Sanitary
and Phyto Sanitary Measures (SPS) under WTO.
Compliance of shelf life is mandatory for all processed food item but
determination is not arbitrary. It is based on PFA Rules 1955.
The rationale is that the country of origin on product is to be mentioned
because if there is any irregularity in the quality of the imported item, the
source could be tracked.
License from Bureau of Indian Standards cement, gelatin, The following steps have been taken: 1) number of items for which
condensed milk, electrical appliances, mineral water, steel certification is needed has been reduced from 109 to 68, 2) marking
products, leather products•] ray equipments, dry cell
fees for BIS license has been reduced for SAARC countries, and 3)
battery, thermometers, helmets and gas cylinders)
processing charge for SAARC countries has been abolished. 100%
Requirement of laboratory testing (all products)
checks are done on only 14 high risk food items.
The following steps have been taken; 1) mandatory license is required
only for safety boots and shoes for minors, 2) license for safety boots
and shoes for minors can be obtained from BIS, and 3) every
consignment is not required to be checked by BIS consignment is not
Requirement of chemical testing (leather and melamine) required to be checked by BIS.
Certificate of nonhalogenated hydrocarbon (jute
products)
Domestic producers face the same stipulation.
Preshipment certificate about presence of no hazardous
dyes ( textile and textile products)
The provisions are also in effect for domestic industries.
Registration of the drug with the Central Drug Standard No import license is required for import of pharmaceuticals. All import
Control Organization (pharmaceutical products)
of bulk drugs are set as per the EXIM policy 2004]2009.
Requirement of import licenses are under exception clauses of Article
12
Requirement of import license (mostly consumer goods) XX and Article XXI of p GATT.
1. Key Findings from the First Phase of the Study
Exporting Country: India; Responding Country: Bangladesh
Type of NTB
Ban on import (poultry related
products)
Same name registration of drug in a
developed country (drugs) 15% VAT
(all goods)
Non•-issue of Khamarbari Certificate
(Potatoes)
Allowed through land route only
(Yarn)
Non acceptance of cargo by
road/rail/rover routes (all goods)
L/C requirement (all products)
Radioactivity test (directly
consumable stuff)
PSI certificate
Non•payment of irrevocable L/Cs by
various banks in (all exports)
Reluctance to open new trade routes
and certain notified Land routes and
certain notified Land Customs
Stations
Response from Bangladesh
To protect human and animal/health. In view of recent partial spread of Avian Influenza,
Bangladesh needs to continue such measures.
Registration and Free Sale Certificate (FSC) duly signed in original by the Health Authority of
the country of origin and at least one FSC from a developed country. 15% VAT is also imposed
on domestic products. Therefore, imposition of VAT should not be treated as para•tariff.
Potatoes are not allowed to be imported into Bangladesh from any country; (because of three
serious pests, namely Black wart, Golden nematode and potato beetle) unless this is
accompanied by Phytosanitary Certificate from the country of origin.
This measure is not applicable for a specific country. The provision has been relaxed for yarn
imported under back•]to•]back LC through land customs.
Currently, necessary equipments and physical infrastructure are not available to handle
containerized cargoes. Thus, containerized cargoes via land, river and rail routes are not
permitted.
Bangladesh Bank feels that this instruction is necessary to ensure entry of imported
materials/goods into the country against paidentry of imported materials/goods into the
country against paid money and this has not been applied as a non•]tariff barrier.
All imports of food items require radioactivity test report. However, radioactivity test
requirement has been relaxed for SAARC countries.
Any exporter from any part of North East India can get the service of the PSI office in
Shilong within 24 hours. Moreover, it must be noted that most of the products exported to
Bangladesh from North East India are non•]PSI items India are non PSI items
The issue is being addressed by a joint group on Banking sector.
Teghamukh and Ramgarh are situated in remote areas where traveling and communication
is very difficult Besides there are 4/5 traveling and communication is very difficult. Besides,
there are 4/5 land customs stations close to these places, which can cover the trade with
Mizoram.
13
1. Key Findings from the First Phase of the Study
Standards and SPS related issues in case of export to India
• Bureau of Indian Standards (BIS) is responsible for formulating and enforcing
standards for 14 sectors.
• Production and general engineering; civil engineering (as of 1 January 2011);
chemical (15 October 2010); electro-technical (1 July 2009); food and
agriculture (9 June 2010); electronics and information technology
(1 April 2010); mechanical engineering (1 April 2010); management and
systems (1 Oct 2010); metallurgical engineering (6 July 2010); petroleum, coal,
and related products (1 July 2010); transport engineering (1 January 2011);
textile (1 April 2008); water resources (1 April 2010); and medical equipment
and hospital planning
(1 January 2011)
Indian Standards, 2007-10
Total number of Indian standards in force
% equivalent to international standards
2007/08
18,470
..
2008/09
18,592
..
2009/10
18,592
84
Source: WTO Trade Policy Review – India, 2012
14
1. Key Findings from the First Phase of the Study
Sanitary and Phytosanitary Legislation, 2011
Legislation
Prevention of Food Adulteration
Act 1954
Essential Commodities Act 1954
Fruit Products Order 1955
Solvent Extracted Oils, De-oiled
Meal, and Edible Four Control
Order 1967;
Vegetable Products Control
Order 1976
Meat Products Control Order
1973
Milk and Milk Product Order
1992
Livestock Importation Act 1898
(amended in 2001)
Destructive Insects and Pests Act
1914
Plant Quarantine (Regulation of
Import into India) Order 2003
Standards on Weights and
Measures (Packaged
Description
Aims to protect consumers against the supply of adulterated food. It specifies
minimum quality level standards for various food products. The Act is
mandatory; infringement may lead to fines and imprisonment
Regulates the manufacture, commerce, and distribution of essential commodities,
including food. A number of control orders have been formulated under the
provisions of this Act
Regulates the manufacture and distribution of all fruit and vegetable products,
sweetened aerated waters, and vinegar and synthetic syrups. The manufacture or
re-labelling of products require a licence from the Ministry for Food Processing
Industries, which is granted when the quality of products, sanitation, personnel,
machinery, and equipment and work area standards are satisfactory
These orders control the production and distribution of solvent extracted oils,
de-oiled meal, edible flours, and hydrogenated vegetable oils (vanaspati).
Production and distribution of the above-mentioned products require a licence,
which is granted when products conform to the specifications laid down in the
schedules. The Directorate also regulates the price of vanaspati
Regulates the manufacture, quality, and sales of all meat products
Implementing institution
Central Committee for Food Standards under the
Directorate General of Health Services (Ministry of
Health and Family Welfare)
Central and state government agencies
Ministry for Food Processing Industries
Directorate of Vanaspati, Vegetable Oils, and Fats
under the Department of Food and Public
Distribution (Ministry of Consumer Affairs, Food,
and Public Distribution)
Directorate of Marketing and Inspection under the
Department of Agriculture and Cooperation
(Ministry of Agriculture)
Department of Animal Husbandry Dairying, and
Fisheries (Ministry of Agriculture)
Provides for setting up an advisory board to advise the Government on the
production, sale, purchase, and distribution of milk powder. Units with installed
capacity for handling milk of over 10,000 litres per day, or milk products
containing milk solids in excess of 500 tonnes per year, are required to register
with the Department of Animal Husbandry and Dairying
Allows the Central Government to regulate, restricts, or prohibits import of animal Department of Animal Husbandry, Dairying, and
and animal products into India
Fisheries (Ministry of Agriculture)
Regulates import of plants to prevent introduction into and the transport from one
State to another in India of any insects, fungus or other pest that is or may be
destructive to crops
It regulates the import of plants and plant materials
They lay down certain obligatory conditions for all commodities in packed form,
with respect to declarations on quantities contained
Directorate of Plant Protection, Quarantine and
Storage (Ministry of Agriculture)
Plant Quarantine Division in the Ministry of
Agriculture
Directorate of Weights and Measures under
15
Department of Consumer Affairs (Ministry of
1. Key Findings from the First Phase of the Study
 In August 2006, the Central Government passed the Food Safety and Standards
(FSS) Act of 2006 to consolidate separate laws, and to establish the Food Safety
and Standards Authority of India (FSSAI).
 These laws include: the Prevention of Food Adulteration Act 1954; the Fruit
Products Order 1955; the Meat Food Products Order 1973; the Vegetable Oil
Products (Control) Order 1947; the Edible Oils Packaging (Regulation) Order
1988; the Solvent Extracted Oil, De-Oiled Meal and Edible Flour (Control)
Order 1967; and the Milk and Milk Products Order 1992.
 Imports of animal products into India require sanitary import permits issued by
the Department of Animal Husbandry, Dairy and Fisheries;
 Permits must be obtained prior to shipping from the country of origin.
 Imports of plants and plant materials are regulated under the Destructive Insects
and Pests Act 1914, the Plant Quarantine (PQ) (Regulation of Import into India)
Order 2003, and international conventions.
 All plant and plant material consignments must be accompanied by a
phytosanitary certificate issued by the national plant protection organization
of the exporting country and an import permit issued by the officer in charge
of the plant quarantine station.
 Plant Quarantine (Regulation of Import into India) Order 2003.
16
1. Key Findings from the First Phase of the Study
Plant Quarantaine, 2011
Schedule
No.
IV
Description
List of plants/planting materials and countries from where imports are prohibited along with justifications
No. of products
covered
14
V
List of plants and plant materials restricted: imports are permissible only with the recommendation of
authorized institutions with additional declarations and special conditions
VI
List of plants/plant materials permitted to be imported with additional declarations and special conditions
628
VII
List of plants/planting materials where imports are permissible on the basis of phytosanitary certificates
issued by the exporting country, the inspection conducted by inspection authority, and fumigation, if
required, including all other general conditions
288
VIII
IX
X
List of quarantine weed species
Inspection fees
List of permit issuing authorities for imports of seeds, plants and plant products, and other articles
31
n.a.
n.a.
Source:
17
Plant Quarantine (Regulation of Import into India) Order 2003.
• Sampling and testing of consignments to prevent the risk of exotic pests is undertaken
• According to the International Standards for Phytosanitary Measures Guidelines
No. 23 and 31
• Imports of GM food, feed, and organisms, and living modified organisms for R&D,
food, feed, processing in bulk, and environment release is governed by the Environment
Protection Act 1986 and Rules 1989.
• Imports of products containing GM material for industrial production or
environmental release are allowed only with the approval of the Genetic
Engineering Approval Committee (GEAC).
17
1. Key Findings from the First Phase of the Study
3. Standards and SPS related issues in case of Export to Bangladesh
 The main institutions are the Bangladesh Standards and Testing Institution
(BSTI) and the Bangladesh Accreditation Board (BAB)
 As of 2012, there were 3,498 standards in Bangladesh, of which 155 compulsory
standards are in force.
 Testing and certification procedures for compulsory standards are the same
for domestic and imported products.
 BSTI develops national standards for products and services
 As of today, international standards adopted by BSTI include 1368 International
Standardisation Organisation (ISO) Standards and 163 International
Electrotechnical Commission (IEC) standards.
 Bangladesh is a member of the ISO 1974, and in 2001 became an affiliate
member of IEC
 Bangladesh is upgrading its quality infrastructure to international level by
collaborative efforts with the newly operational Bangladesh Accreditation Board.
Under the Bangladesh Accreditation Act (2006), the Bangladesh Accreditation
Board (BAB) was established as an autonomous organization
18
1. Key Findings from the First Phase of the Study

List of Imported Products brought under mandatory certification before Customs clearance
A. Food Products (18 Items):
Sl. No Name of the products
1 Milk Powder and Cream
Powder
2 Fruit Cordiel
3 Biscuit
4 Sauce (Fruit & Vegetable)
5 Lozenges
6 Tomato Ketchup
7 Jams (Fruits Presurves) &
Jelly
8 Marmalade
9 Infant Formula
10 Soyabean Oil
11 Soft Drink Powder
12 Sugar
13 Instant Noodles
14 Fruit or vegetable Juice
15 Edible Sun Flower Oil
16 Chips/Crackers
17
18
19
Toffies
Honey
Processed Cerial based
Foods for Infants and young
children’s
Standards NO.
BDS/CAC 207:08
BDS 508:2006
BDS 383:2001
BDS 512:2007
BDS 490:2007
BDS/CAC 530:2002
BDS/CAC 79:2008
BDS/CAC 80:2008
BDS CAC 72:2003
BDS 909: 2000
BDS 1586:2007
BDS/CAC212:2006
BDS 1552:2007
BDS 513:2002
BDS CAC 23: 2002
BDS
1556:1997;Amend1:2004
BDS 1000:2001
BDS /CAC 12:2007
BDS 074: 2007
B. Chemical Products (08 items)
Sl. No
1
2
3
4
5
6
7
8
Name of the products
Coconut Oil
Skin Cream
Tooth Paste
Skin Powder
Shampoo, Synthetic Deter-gent
based
Lipstick
Toilet Soap
After Shave Lotion
C. Textile Product (2) Items
Standards NO.
BDS 99:2007
BDS 1382:2006
BDS 1216:2006
BDS 1337:2006
BDS 1269:2002
Sl. Name of the
No products
1 Polyester blend
Suiting
2 Polyester blend
Shirting (Market
Varieties)
Standards
NO.
BDS
1175:2001
BDS
1148:2003
BDS 1424:2006
BDS 13:1994
BDS 1524:2006
D. Electrical & Electronic Products (07) Items
Sl. No Name of the products
1 Primary Batteries:
a) Part-1 General
b) Part-2 Physical and Electrical Specification
c) Part-3 Watch Battery
d) Part -4 Safety of Lithium batteries
e) Part-5 Safety of Batteries with Aqueous Electrolyte
2 Performance & Construction of Electric circulating Fans
&
Regulators (Ceiling & dec head fans, pedestal fans &
table/cabin fans with in-built regulators)
3 Tublar & other switches for domestic & similar purposes
(Push button, Piano etc.)
4 Tubular Fluorescent Lamps
5 Ballast for Fluorescent Lamps Performance
Requirements
6 Two-Pin Plugs & Socket-Outlets Reversible type for
domestic use
7 Three-Pin Plugs & Socket-Outlets
Standards NO.
BDS IEC 60086 (Part-1):2005
BDS IEC 60086 (Part-2):2005
BDS IEC 60086 (Part-3):2005
BDS IEC 60086 (Part-4):2005
BDS IEC 60086 (Part-5):2005
BDS 818:1998 (BDS 181: '98, Amend
1: 06)
BDS 117:2005
BDS 292:2001
BDS /IEC 60921:05
BDS 102:2005
BDS 115:2005
E. Engineering Products (04) Items
Sl.
No
1
2
3
4
Name of the products
Standards NO.
Cement
Ceramic Tablewares
G P Sheet (Including Corrugated Sheet)
Ceramic Tiles- definitions, Classifications
characteristics & marking
BDS EN 197-1:2003
BDS 485:2006
BDS 1122: 2007
BDS/ISO 13006: 2006
19
1. Key Findings from the First Phase of the Study
3. SPS related issues in case of Bangladesh
 Proposed Road Map for Upgradation of BSTI Labs
 Indian Prime Minister has agreed to support the upgradation of the





Bangladesh Standard Testing Institute (BSTI) with a view to building
capacity on certification.
According to the Roadmap
BSTI is to send pre‐assessment reports and report on actions taken and
under process by BSTI to Norwegian Accreditation Authority (NAA)
and Bureau of Indian Standards (BIS).
BIS resource persons will visit BSTI to provide technical assistance to
address issues of accreditation. Additional trainings may be arranged.
If NAA gives a sensitive response, BSTI will immediately apply to the
National Accreditation Board for Testing and Calibration laboratories
(NABL) of India for accreditation of its food laboratory. There is a
strong case for giving this route due priority.
After completion of all due processes, the BIS team may visit BSTI and
make recommendations.
20
1. Key Findings from the First Phase of the Study
 BSTI had initially applied for accreditation of the product certification
system to NABCB (National Accreditation Board for Certification
Bodies), India incorporating 5 products namely i) Protein Rich Biscuit,
ii) Wafer Biscuit, iii) Edible Gel, iv) Fruit Drinks & v) Chutney as the
scope of accreditation.
 NABCB has accorded accreditation of BSTI product certification
system for a period of 3 years starting from 9 January 2012.
21
1. Key Findings from the First Phase of the Study
 Sanitary and phytosanitary (SPS) standards
 Sanitary standards in Bangladesh are governed by the Pure Food Ordinance 1959,
as revised by Food Safety Ordinance 1994; and the Pure Food Rules.
 Phytosanitary standards in Bangladesh are governed by the Destructive Insects
and Pest Rules 1966 and the Plant Quarantine Act 2011.
 Formulation of rules under the Plant Quarantine Act, 2011 is under way.
 Sanitary and phytosanitary standards are also governed by other legal
instruments
 Bangladesh Diseases of Animal Act, 2005 and Bangladesh Diseases of Animal
Rules, 2008, Bangladesh Animal and Animal Product Act, 2005, Bangladesh
Fish and Animal Feed Act, 2010 and Bangladesh Animal Slaughter and Meat
Quality Control Act 2011.
 SPS measures in the fisheries sector for both the export market and for domestic
consumption
 Fish and Fish Products (Inspection & Quality Control) ordinance, 1983; Fish
and Fish Products (Inspection & Quality Control) Rules, 1997 (Amended in
2008); Fish Feed and Animal feed Act, 2010; Fish Feed Rules, 2011; Fish
Hatchery Act, 2010; Fish Hatchery Rules, 2011
 SPS matters are handled by the Ministries of Agriculture, Health, and Fisheries
22
and Livestock.
1. Key Findings from the First Phase of the Study
 Ministry of Agriculture
 For the import of regulated articles: (a) issuance of Import Permit which
contains phytosanitary requirements for concerned commodities; (b)
compliance with Destructive Insects and Pests Rules, 1966 amended up
to July, 1989 and Plant Quarantine Act, 2012; (c) activities at the point of
entry including: documentation check, verification of consignment
integrity, phytosanitary inspection, sampling, testing and treatment (if
required), detention of consignment.
 Bangladesh has 26 plant quarantine stations/entry points, three of
which are located in three international airports, two in seaports, one in
a river port, one in an ICD (Inland Container Depot), and the other 19
quarantine stations are located in 19 border land ports.
 Any plants or plant products whether meeting the Phytosanitary
requirement or not must be inspected by the plant quarantine officials
before release of the consignment.
23
1. Key Findings from the First Phase of the Study
 Ministry of Health and Family Welfare (MOHFW)
 Bangladesh has adopted International Health Regulation (2005) (IHR 2005) of
the World Health Organization (WHO) regarding ship sanitation at ports of
entry (POE). The procedures include environmental sanitation, ship
inspection, and deratting at POE.
 The Public Health Laboratory (PHL) is responsible for checking the quality of
food in order to protect the consumer from unsafe, adulterated or
contaminated food as per Pure Food Ordinance, 1959 and Pure Food Rules,
1967.
 The Pure Food Ordinance and Pure Food Rules contain 107 items of notified
food, specified in: (1) milk and milk products; (2) edible oils and oil products;
(3) sweetening agents; (4) cereals and their products; (5) starchy foods; (6)
non-alcoholic beverages; (7) spices; (8) fruits, vegetables, and miscellaneous
products; (9) tea and coffee; (10) bakery and confectionary products; (11)
iodized salts; and (12) canned food.
24
1. Key Findings from the First Phase of the Study
 Ministry of Fisheries and Livestock (MFL)
 The Bangladesh Diseases of Animals Act, 2005, the Bangladesh Animal and Animal
Product Quarantine Act, 2005, and the Bangladesh Wildlife (Preservation)
(Amendment) Act, 1974 are the three main legal instruments for keeping Bangladesh
free from HPAI/H5N1 in animals and enables the control and eradication of the
disease in case of an outbreak. Moreover, the Bangladesh Penal Code (BPC),
Bangladesh Customs Act, 1969, and Imports and Exports (Control) Act, 1950 Section
3A, are used for quarantine and import bans.
 For fish and fish products, SPS standards are governed by Fish and Fish Products
(Inspection and Quality Control) Ordinance, 1983 and Fish and Fish Products
(Inspection & Quality Control) Rules, 1997 (Amended in 2008).
 Labelling requirements
 To protect the interests of the consumer and to maintain a standard labelling
system, the Government has promulgated The Bangladesh Standards of Weights &
Measures (Packaged Commodities) Rules, 2007 under the Weights and Measures
Ordinance, 1982.
 Accordingly the following declarations have to be made on every package: name and
address of the manufacturer and packer; common or generic name of the product
with all ingredients; net weight; date of manufacture and date of expiry; retail price
of the package.
25
1. Key Findings from the First Phase of the Study
SARSO Agreement
 The Agreement on the Establishment of the South Asia Regional Standards




Organization (SARSO), was signed at 15th SAARC Summit held in
Colombo, Sri Lanka on 2nd - 3rd August, 2008, by the Foreign Ministers of
the SAARC Member States
The Agreement on establishment of SARSO has since been ratified by all
Member States with Afghanistan ratifying the Agreement in May 2011.
The Agreement on establishment of SARSO has entered into force with
effect from 25 August 2011 with issuance of Notification to this effect by the
SAARC Secretariat.
SARSO is to be located in Dhaka, Bangladesh
One of the major objectives of SARSO is to develop SAARC standards on
the products of regional/sub-regional interest
26
1. Key Findings from the First Phase of the Study
Development of SAARC Standards
 The following products have been identified for harmonization/development of
SAARC Standards:
Sugar
Skimmed Milk Powder
Biscuits
Instant Noodles Vegetable Ghee
Electric Cables
Textile Fabric
Jute
Cement
Steel Tubes
Structural Steel
Toilet Soap
 Sector based approach adopted for harmonization/ development of SAARC
standards with setting up of Sectoral Technical Committees
Food and Agricultural Products;
Electrical, Electronics, Telecoms and IT
Jute, Textiles & Leather;
Building Materials
Chemical and Chemical Product
• Draft SAARC Agreement on Implementation of Regional Standards: The objective of
this agreement is to provide the framework as well as the guiding principles for
implementation of the SAARC standards
• Draft SAARC Agreement on Multilateral Arrangement on Recognition of Conformity
Assessment: The objective of this Agreement is to facilitate SAARC Member States
to accept results of conformity assessment
27
1. Key Findings from the First Phase of the Study
Current State of Domestic Physical Connectivity
• Length of road has increased considerably
•But the quality of road (e.g. paved road) remains a concern.
•In contrast, expansion of rail network was rather slow – indeed, in some instances
rail-based transport network had experienced contraction.
• Air transport network on the other hand has made significant progress particularly in
case of freight transport, passenger and departure of carriers etc.
• Containerisation as a mode of transport of goods has been on the rise globally.
• Only about 50% container passing though the Chittagong port is containerized,
while less than 15% of containers moved inland, mainly by rail and only a few by
road or by inland waters are containerised (World Bank, 2013)
Condition of Physical Infrastructure of Bangladesh
1991
2001
7.2
9.53*
Roads, paved (% of total roads)
195409 207485*
Roads, total network (km)
2746
2768
Rail lines (total route-km)
718
908
Railways, goods transported (million ton-km)
99.4
169.6
Air transport, freight (million ton-km)
13800
6486
Air transport, registered carrier departures worldwide
486289
Container port traffic (TEU: 20 foot equivalent unit)
Note: * and ** indicate data for 2000 and 2010 respectively.
Source: WDI Database, 2013
2011
2012
9.5**
21269**
2835
710
120.1 114.8
12182 20778
1433397
28
1. Key Findings from the First Phase of the Study
 The road transport remains the predominant mode of transport in Bangladesh
accounting for four-fifths of total traffic moved.
 The conditions of internal roads in Bangladesh are not of the quality that
corresponds to the Asian Highway standard.
 The roads are usually classified as ‘primary’, ‘class I’, ‘class II’, ‘class III’ and ‘below
class III’. Standard primary roads in Bangladesh are limited in length unlike in
neighbouring India and to some extent in Myanmar.
 The condition of Bangladesh’s roads has improved over time – between 2004 and
2008, 93% of total roads were upgraded to class II level from class III and below
class III levels which was only 24% in 2004.
Condition of Roads: 2004-2010
Primary
Class I
Class II
Class III
Below Class III
Total
Km
Km
Km
Km
Km
Km
200
200
2010
Countries
4
8
2010
2004
2008
2010
2004
2008
2010
2004
2008
2010
2004
2008
2010
2004
2008
Myanmar
0
0
0
147
173
147
144
35
0
983
1,585
1,798
1,729
1,216
1,064
3,003
3,009
3009
Bangladesh
0
0
0
20
92
68
441
1,648
1,574
476
0
32
868
25
83
1,805
1,765
1762
India
0
90
90
484
4,069
4,069
0
1,675
1,675
10,869
5,699
5,699
105
117
117
11,458
11,810
11810
Myanmar
0
0
0
4.9
5.7
4.89
4.8
1.2
0
32.7
52.7
59.75
57.6
40.4
35.36
100
100
100
Bangladesh
0
0
0
1.1
5.2
3.86
24.4
93.4
89.33
26.4
0
1.82
48.1
1.4
4.71
100
100
100
India
0
0.8
0.76
4.2
34.5
34.45
0
14.2
14.18
94.9
48.3
48.26
0.9
1
0.99
100
100
100
Share (%)
29
1. Key Findings from the First Phase of the Study
 Major part of road network of Bangladesh is not suitable to
handle modern diversified vehicles (WDI, 2010).
 The deficiency is more acutely felt in accommodating
containers in Dhaka-Chittagong roads which constrain
trading activities (BTILS, 2008).
 Severe congestion is a prominent and permanent feature of
highways from Dhaka to other districts.
 In case of cross-border road connectivity, harmonization
of standards signaling system and protocols need to be
ensured through signing of Motor Vehicle Agreement.
30
1. Key Findings from the First Phase of the Study
Bangladesh in Asian Highway and Trans-Asian Railway
31
1. Key Findings from the First Phase of the Study
State of Cross Border-Related Physical Transport Infrastructure
Condition of Cross-border Roads
 The road transport remains the predominant mode of transport accounting for
four-fifths of total traffic moved
 Condition of roads has improved over time - 93% of total roads were upgraded
to class II level (only 24% in 2004) (see next slide)
Major Weaknesses in Cross-border Road
 Two generic impediments are: a) lack of agreement on cross-border movement of
goods between Bangladesh and India causes transshipment and b) roads in
Bangladesh side was not suitable to take loads over 8.2 axle.
 Benapole point: limited working hours; no work during week-end; practice of
limiting providing clearance for only 300 trucks per day; slow clearance at border
points.
 Brahmanbaria-Akhaura point: poor and narrow road; Banglabandh point: absence
of permanent immigration and customs office; Tamabil point: absence of an
appropriate agreement causes transshipment; Akhaura-Chittagong point:
narrowness and poor condition of the road; Burimari-Mongla point: lack of proper
warehousing facilities; Jamuna Bridge point, about 82 km roads are narrow
32
1. Key Findings from the First Phase of the Study
State of Cross Border-Related Physical Transport Infrastructure
Major Weaknesses in Railway Transport
 Broad gauge rail corridors between Bangladesh and India are not active
 Non-utilisation of available capacity on the Indian side, restriction on
movement of commodity specific rolling stocks, inadequate
infrastructural facilities for loops holding lines and axle road restriction at
Jamuna
 Mahishahon-Dhaka links: Different types of gauges require transshipment
of goods. Rohanpur-Chittagong point: missing link between Akhaura and
Agartala, metre gauge section, and capacity constraints in Chittagong port
Major Weaknesses in Inland waterways
 Lack of sufficient number of port of calls; old vessels; poor navigational
aids; and outdated jetties. Lack of dredging and siltation; lack of
appropriate equipments and skilled manpower
33
1. Key Findings from the First Phase of the Study
State of Cross Border-Related Physical Transport Infrastructure
Major Weaknesses in Maritime Transport
 Chittagong Port: existing facilities in the port are inadequate; width,
curvature and draft of the Karnaphuli River limits the size of the vehicles
to enter the port; bottlenecks within the road and rail traffic from the port
to the capital city.
 Mongla Port: Lacks the required container handling equipments; weak
connectivity from other parts of the country; lack of economic activities
Major Weaknesses in Air Transport
 Poor infrastructure (runways, navigational facilities, ground services,
modern amenities etc.), lack of skilled manpower, poor management;
inadequate warehouse facility
34
1. Key Findings from the First Phase of the Study
State of Customs and Trade Facilitation
 Bangladesh is placed is just above the average of South Asia in most of the
indicators related to trade facilitation and customs processes (WB, 2013)
 Requirement of time and cost is significantly high
 Better performance in timeliness; poor in terms of customs
Product-Specific Analysis of Customs and Logistics Condition at the
Border Points
 Import of raw materials from India (cotton fabrics): 10 days; US$415
 Export of final products to India (garments): both through land and sea
ports required four times more time and more than double costs
 Business process followed with Bhutan and Nepal are lengthy and involve
higher costs
 Majority of operations (about 80% of the documents) involving crossborder trade in South Asia is still carried out through manual processes
 Customs automation helped reduce the number of documents needed,
time required and consignments to be inspected
 Lack of standard documentary process in land based trade
35
6. State of Transport Administrations and Trade Facilitation
Export and Import Procedures in Bangladesh vis-à-vis Selected Countries
Indicators
Duration( Days)
Nepal
Pakista
Sri
Bhuta
n
Lanka
n
Export Procedure
11
12
16
14
Banglade
sh
India
Document
Preparation
Customs Clearance
and Technical
Control
Ports and terminal
handlings
Inland
transportation and
handling
Total
14
8
3
2
3
2
3
5
3
3
3
3
3
4
3
25
16
21
20
Document
preparation
Customs clearance
and technical
control
Ports and terminal
handling
Inland
transportation and
handlings
Total
22
8
3
25
Cost(USD)
Pakista
Sri
n
Lanka
Banglade
sh
India
225
415
110
4
150
130
6
4
450
13
19
Bhuta
n
Nepa
l
135
350
300
200
285
180
300
225
150
185
350
275
200
350
200
115
1350
1100
1025
1120
660
720
2230
1975
11
38
41
Import procedure
12
17
14
370
400
155
190
250
270
4
2
2
4
5
150
200
200
285
380
300
12
13
14
21
19
420
600
355
475
630
570
Source: http://www.doingbusiness.org/data/exploreeconomies/
36
6. State of Transport Administrations and Trade Facilitation
Business Process of Selected Products Traded between Bangladesh and India
Product
Export
Woven garments (by
land)
Woven garments (by
sea)
Import
Cotton fabrics
(by
land)
Steps in Business
Process (Use Case)
Number of
Documents Required
Number of Actors
Involved
Avg. Time (Days)
Avg. Cost (USD/20
feet container)
10
17
12
38*
935
12
26
12
40
-
7
10
8
10**
415
Source: Hossain and Rahman, 2011; Note: * Excludes production time
** Excludes time required by Indian exporter in completing the business process in India
Business Processes: Requirement of Time and Cost
Corridor
Exporter
Importer
Products
Procedures (No.)
Exporter
Importer
Total
Time
(Day)
Cost
(US$/TEU)
Corridor 1: KakarvittaPanitanki-FulbariBanglabandha
Nepal
Bangladesh
Lentil
18
13
31
23.40
Bangladesh
Nepal
LAA
12
16
28
29.26
Corridor 2:
Phuentsholing-JaigaonHasimaraChangrabandha Burimari
Bhutan
Bangladesh
Orange
18
14
32
18.60
1402.1
569.8
Bangladesh
Bhutan
Fruit Juice
9
16
25
20.13
527.6
791.8
Source: De, 2013
37
3. Need and rationale for the second phase of the study
 Existing knowledge on practices of national standards, SPS related rules and
regulations, transport facilitation provides indication of concerns, challenges and
scopes for undergoing detailed study on agreements on above-mentioned issues
 A detailed analysis on those issues will provide
 Better understanding on concerns related to standards and SPS related issues
 Detailed information about practice of SPS related standards followed by India
 Understanding as regards differences between the two countries in terms of
following standards and SPS related requirements
 Mutual recognition agreements currently in practice /discussion in other bilateral,
sub-regional and regional trade agreements and major focus of those agreements
 SPS agreements currently in practice in other bilateral, sub-regional and regional
trade agreements and their major focus
 Better understanding on MVAs currently in operation in other bilateral, subregional and regional agreements
 A detailed analysis will help to understand
 Preparedness of both the countries in terms of requirement of infrastructure,
institutional set up, requirement of resources
 Assessment of resources, time, and institutional aspects necessary for the
improvement and changes in rules and regulations and its implementation
38
4.How to/why push the agenda for cross-border transport
facilitation and mutual recognition of standards
 Need to identify offensive and defensive interests in case of issues and concerns
related to the possible agreements to be prepared
 Discussion with key stakeholders including BSTI, ministries and departments




monitoring the SPS standards, traders, border authorities, logistic providers
 Discussion with key stakeholders with regard to MVAs including ministry of
transport and communications, road transport authority, private transport
organizations, border authorities, logistics providing agencies
Discussion with the experts on concerning issues
 To better understand contextual issues, in-depth understanding technical issues
Consult with similar agreements signed by other countries at bilateral, regional and
sub-regional levels
 To appreciate the framework issues, contents and concerns
 Challenges faced after signing such agreements (e.g. narcotics, illegal movement)
Interact with the counterpart institute (CUTS)
 To get more information about rules and regulations related to standards, SPS
and MVAs followed
Discussion with the official of ministries/departments involve in SPS, standards and
MVA related issues
 To get their feedback regarding the possible issues and concerns to be addressed
in the agreements
39
5. The Expected outcomes/benefits
 A draft framework on SPS agreements based on the information to be
collected from different sources through interviews and FGDs to be
carried out
 A revised draft on MVA based on the analysis to be undertaken
 Provide inputs for relevant policies of the government of Bangladesh
through dialogues and policy influencing activities
 Provide a plan of actions for enforcement of the agreement
40
6. Outline of a Model to Quantify the Benefits Accruing from
Cross-border Transport Facilitation
Static benefit
 Reduction of trade cost due to MVA
 CUTS (2013): Potential savings in MVA reforms
Dynamic benefit
• ?
41
Thank you
42