Unlocking Bangladesh-India Trade : Emerging Potential and the Way Forward

The primary objective of this study is to analyze the impact on Bangladesh of increased market access in India, both within a static production structure and also identifying dynamic gains. The study shows that Bangladesh and India would both gain...

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Bibliographic Details
Main Authors:	De, Prabir, Raihan, Selim, Kathuria, Sanjay
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	ADMINISTRATIVE PROCEDURES AGRICULTURE AIR AIR TRANSPORT AIRPORTS ANTI-DUMPING MEASURES APPAREL AUTOMOBILES BARRIERS TO TRADE BASE YEAR BASKET OF GOODS BENEFITS OF TRADE BILATERAL COOPERATION BILATERAL FREE TRADE AGREEMENT BILATERAL TRADE BILATERAL TRADE BARRIERS BONDS BORDER CROSSINGS BORDER INFRASTRUCTURE BOTTLENECKS CASE-BY-CASE BASIS CONGESTION CONSUMER PROTECTION CONSUMERS CONTROL OF CORRUPTION COUNTERVAILING MEASURES COUNTRY OF ORIGIN CROSS-BORDER TRANSACTIONS CROSSING CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CUSTOMS CUSTOMS AUTHORITIES DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT POLICY DRIVERS DRIVING DUMPING ECONOMIC COOPERATION ECONOMIC POLICY ECONOMIC RELATIONS ECONOMIC SIZE ECONOMIES OF SCALE EFFICIENT TRANSPORTATION EXOGENOUS VARIABLES EXPORT BASKET EXPORT DYNAMISM EXPORT PRICES EXPORT PRODUCTS EXPORT STRUCTURES EXPORT SUPPLY EXPORTERS EXPORTING COUNTRY EXPORTS FACTOR ENDOWMENTS FACTORS OF PRODUCTION FINANCIAL SERVICES FOREIGN CAPITAL FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN FIRMS FOREIGN INVESTMENT FREE ACCESS FREE MARKET ACCESS FREE TRADE GDP GDP PER CAPITA GENERAL EQUILIBRIUM MODEL GLOBAL COMPUTABLE GENERAL EQUILIBRIUM GLOBAL ECONOMY GLOBAL EXPORTS GLOBAL TRADE GLOBAL TRADE ANALYSIS GRAVITY ESTIMATES GRAVITY MODEL GRAVITY MODELS GROWTH POTENTIAL IMPACT OF TRADE IMPORT COMPETITION IMPORTING COUNTRIES IMPORTING COUNTRY IMPORTS INDUSTRY TRADE INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INSPECTION INTEGRATION OF TRANSPORTATION INTERNATIONAL BANK INTERNATIONAL TRADE INVESTMENT FLOWS JOINT VENTURE LDCS LETTERS OF CREDIT MARKET ACCESS MARKET STRUCTURE MEASURE OF TRADE METAL PRODUCTS MINISTERIAL MEETING MOTOR VEHICLES MULTILATERAL LIBERALIZATION MULTILATERAL TRADE MUTUAL RECOGNITION NON-TARIFF BARRIERS PATTERNS OF TRADE POLICY MAKERS POLICY RESEARCH PORT SERVICES PREFERENTIAL TRADE PREFERENTIAL TRADE ARRANGEMENTS PRODUCT DIFFERENTIATION PRODUCTION PROCESS PROTECTIONIST PROTECTIONISTS RAIL RAILROADS RAILWAY REAL INCOME REGIONAL INTEGRATION REGIONAL TRADE REGIONAL TRANSIT REGIONALISM REGULATORY BARRIERS ROAD ROAD HAULAGE RULES OF ORIGIN SCALE EFFECTS STATIC ANALYSIS TARIFF BARRIERS TARIFF CONCESSIONS TARIFF PREFERENCES TARIFF QUOTAS TARIFF REDUCTION TAX TECHNICAL BARRIERS TECHNOLOGY TRANSFER TERMS OF TRADE TOURISM TRADE BARRIERS TRADE COMPETITIVENESS TRADE COSTS TRADE CREATION TRADE DATA TRADE DIVERSION TRADE DIVERSION COSTS TRADE DIVERSION EFFECT TRADE EXPANSION TRADE FACILITATION TRADE FLOWS TRADE IN GOODS TRADE IN SERVICES TRADE INTENSITY TRADE LIBERALIZATION TRADE LOGISTICS TRADE PARTNERS TRADE PATTERNS TRADE POLICIES TRADE REFORMS TRADE REGIME TRADE RELATIONSHIP TRADE REMEDIES TRADE TRANSACTION TRADE VOLUME TRADING SYSTEMS TRAM TRANSFER OF TECHNOLOGY TRANSIT TRANSIT SYSTEM TRANSPARENCY TRANSPORT TRANSPORT COSTS TRANSPORT EQUIPMENT TRANSPORT FACILITATION TRANSPORTATION NETWORKS TRANSPORTATION OPTIONS UNILATERAL LIBERALIZATION UNILATERAL TRADE UNILATERAL TRADE LIBERALIZATION VEHICLES VERTICAL SPECIALIZATION WELFARE GAINS WELFARE LOSS WELFARE LOSSES WORLD MARKET WORLD PRICES WORLD TRADE WTO
Online Access:	http://documents.worldbank.org/curated/en/2012/08/16563734/unlocking-bangladesh-india-trade-emerging-potential-way-forward http://hdl.handle.net/10986/11996

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Summary:	The primary objective of this study is to analyze the impact on Bangladesh of increased market access in India, both within a static production structure and also identifying dynamic gains. The study shows that Bangladesh and India would both gain by opening up their markets to each other. Indian investments in Bangladesh will be very important for the latter to ramp up its exports, including products that would broaden trade complementarity and enhance intra-industry trade, and improve its trade standards and trade-handling capacity. A bilateral Free Trade Agreement would lift Bangladesh's exports to India by 182 percent, and nearly 300 percent if transaction costs were also reduced through improved connectivity. These numbers, based on existing trade patterns, represent a lower bound of the potential increase in Bangladesh's exports arising from a Free Trade Agreement. A Free Trade Agreement would also raise India's exports to Bangladesh. India's provision of duty-free access for all Bangladeshi products (already done) could increase the latter's exports to India by 134 percent. In helping Bangladesh's economy to grow, India would stimulate economic activity in its own eastern and north-eastern states. Challenges exist, however, including non-tariff measures/barriers in both countries, excessive bureaucracy, weak trade facilitation, and customs inefficiencies. Trade in education and health care services offers valuable prospects, but also suffers from market access issues. To enable larger gains, Bangladesh-India cooperation should go beyond goods trade and include investment, finance, services trade, trade facilitation, and technology transfer, and be placed within the context of regional cooperation.

Unlocking Bangladesh-India Trade : Emerging Potential and the Way Forward

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