India urged to closely monitor progress of Bangladesh-Japan EPA talks

23 Apr '24

2 min read

India urged to closely monitor progress of Bangladesh-Japan EPA talks

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An Indian think tank has advised New Delhi to 'exercise caution and closely monitor' the progress of the Bangladesh-Japan EPA talks as the pact can hit India's exports to Bangladesh if the latter offers zero duty on all products to Japan.
It called for assessing the impact of Bangladesh's textile-apparel-footwear sector, which is gaining a relative advantage

An Indian think tank has advised New Delhi to ‘exercise caution and closely monitor’ the progress of the Bangladesh-Japan economic partnership agreement (EPA) negotiations as the pact can affect India’s exports to Bangladesh if the latter offers zero duty on all products to Japan under the pact.

"Several products in sectors such as automobiles, metals, electricals and textiles may be largely impacted by the Bangladesh-Japan FTA [free trade agreement]," according to a report by CUTS International (Consumer Unity & Trust Society).

India may need to strengthen its existing trade ties with Bangladesh, diversify its export markets, enhance its competitiveness and explore partnership opportunities to navigate the changing trade dynamics effectively, the report, a quarterly analysis, noted.

While India has a preferential trade agreement (PTA) with Bangladesh and there is the Agreement on South Asian Free Trade Area (SAFTA), addressing these concerns is crucial to maintaining India's export performance in this market and neutralising the shocks posed by future FTAs that Bangladesh may engage in, the report said.

The report called for a comprehensive economic cooperation agreement between India and Bangladesh, according to media outlets in Bangladesh.

India should assess the possible impact of Bangladesh's fast-growing textile-apparel and footwear sector, which is gaining a comparative advantage over time, it noted.

Though the CUTS International analysis suggests that India is unlikely to experience significant market share loss for textile and apparel products in Japan, it will be better to take some precautionary measures, the report cautions.

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