Sri Lanka and Bangladesh have enormous potential to increase bilateral trade which will grow at a steady pace when the Free Trade Agreement (FTA) between the two countries is inked, Bangladesh High Commissioner to Sri Lanka, Riaz Hamidullah told a forum organised by the National Chamber for Commerce of Sri Lanka (NCCSL) last week.
Trade between Sri Lanka and Bangladesh in 2017 was around US$ 78 million with Sri Lanka exporting to the tune of around US$ 47.80 million worth of goods and importing to the value of around US$ 30.02 million.
“We see there is ample scope for both countries to develop trade. Trade exhibitions, visits by trade delegations of both countries and mutual cooperation will help boost trade and investments between Sri Lanka and Bangladesh,” the High Commissioner said. After the free trade agreement between the two countries is clinched, Sri Lanka will be the first country to have such a pact with three countries, in a potential market population of 1.7 billion people in South Asia. Sri Lanka has FTA’s with India and Pakistan.
Trade between the two countries increased by around 55 percent to US$ 166 million from 2013 to 2017. However, bilateral trade between the two Asian nations declined last year.
Apparels, plastics and petroleum products are some of Sri Lanka’s major export items to Bangladesh while pharmaceuticals, machinery parts, jute yarn and electric accumulators are some of the leading imports from Bangladesh. Bangladesh, a fast growing economy in Asia has been growing at around seven percent since 2015. On the contrary, Sri Lanka’s economy has been growing below mid single-digit levels for the past three years.
“Bangladesh is in the process of completing the Registration of Exporters (REX) system which will be ready by December this year. Over 500 Bangladeshi companies have registered and they have been issued Rules of Origin certificates,” Hamidullah said, adding that what is important is mutual benefits for both countries, rather than to know who exports or imports in both countries.
Sri Lanka and Bangladesh should focus on collaboration in air-freight services, garments, IT and entertainment sectors, an official of the Bangladesh delegation said.
Foreign companies could set up operations either in the Export Processing Zones (EPZ) or in the Special Economic Zones in Bangladesh. A foreign company needs to export a minimum of 80 percent of its products to set up a company in the EPZ.
Many leading Sri Lankan companies have invested in Bangladesh which has investment friendly policies for foreign investors. The LTL Group has invested over US$ 200 million in Bangladesh in the power, logistics and energy sectors. Around 30,000 Sri Lankan professionals are working in Bangladesh. The National Chamber has scheduled a trade delegation visit to Bangladesh this year. The chamber accompanied a delegation three years ago. The NCCSL will hold the Ayurveda and Western medicine exhibition next month and an agricultural exhibition will follow.