Bangladesh Commerce Minister Tipu Munshi will conclude a visit to India today. Munshi’s two-day trip centered around negotiations with his
Bangladesh Commerce Minister Tipu Munshi will conclude a visit to India today.
Munshi’s two-day trip centered around negotiations with his Indian counterpart over the proposed India-Bangladesh Comprehensive Economic Partnership Agreement (CEPA). CEPA plans to harmonize the countries’ trade rules, increase cooperation in developing cross-border transportation infrastructure and lay the groundwork for future bilateral trade agreements.
In June, Bangladesh’s central bank projected a 2022 trade deficit of $33 billion due to growing imports and falling exports and remittances. The trade imbalance has fueled inflation, with Bangladesh’s consumer price index hitting 8.85% in November, 2.87 percentage points higher than the same time last year. In response, Bangladesh has aggressively pursued foreign investment and trade deals with India and other major trading partners such as China, Saudi Arabia and the U.S.
The Bangladeshi government will likely promote CEPA negotiations as proof of Bangladesh’s commitment to closer relations with India—messaging aimed towards India and its other trading partners. CEPA and increased India-Bangladesh trade may help equalize Bangladesh’s large trade imbalance with India in the coming years. Nevertheless, Bangladesh will likely continue to seek investment and trade deals with other countries such as China due to the sheer size of its economic problems and its export-centered economy.