India’s trade with Bangladesh back on track while continuing to feel the virus heat

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The trade between India and Bangladesh through Integrated Check Post (ICP) at Petrapole, 80 km away from Kolkata recommenced on April 30 after nearly a month’s gap. Media reports revealed that on the Indian side, 231 trucks were stranded at the border point of Petrapole while another 572 were parked at a place near the check post managed by the local municipal authority. Around 1,300 registered for loading-unloading operations but were waiting at different non-registered/private parking lots nearby.

Initially, while responding to the COVID-19 pandemic, the Indian government took measures to cancel almost all but a small set of visas, largely sealing the country’s borders and restricting all types of passenger and vehicle movement for foreigners (except few border points) through all Immigration Land Check Posts at Indo-Bangladesh, Indo-Nepal, Indo-Bhutan and Indo-Myanmar border with effect from March 15, 2020. As a consequence, trade between India and Bangladesh came to a standstill at the busiest border point at Petrapole.

With trade coming to a halt in the third week of March, more than 2,000 trucks carrying essential and perishable items for export had remained stranded near the Petrapole land port. On a normal day, 500-550 trucks cross the border from the Indian side and about 100-150 come from Bangladesh.

Trade via train movement, however, resumed along the Petrapole-Benapole route on May 09, with around 1,000 tonnes of onions exported from India through Gede-Darshana border point at Nadia.

The pressure from exporters was mounting to resume operations at the ICP. Considering the prevailing situation of the pandemic and with a view to resume cross border trade at Petrapole, it has been decided to allow transshipment of EXIM cargo at zero point. As per the decision, the imported goods would be unloaded from Indian trucks at the zero point of the border and stocked on Bangladeshi trucks and vice-versa to avoid spreading of the virus through maintaining maximum social distancing. Normally, Indian trucks are allowed to enter the Bangladeshi side up to the Bangladesh Land Port Authority terminal.

During the ongoing phase of lockdown, Petrapole had witnessed a 10-20% drop in cargo loading. Export cargo arrivals had also slowed down as an impact of the restrictions imposed by the MHA at the outbreak of the pandemic. Later the export and import through this busy gateway stopped for an indefinite period.

Cross-border trade had been suspended for over a month, supposedly due to reservations expressed by the West Bengal government against the backdrop of the pandemic since a large number of clearing agents had been reluctant to undertake the job for fear of contracting the virus. Indian truck drivers were also reluctant to enter Bangladesh for the rules set by the West Bengal government that required them to stay in quarantine for 14 days after coming back.

Wagah of the East

Bangladesh was India’s largest trading partner in South Asia as per total trade in 2018-19. Imports to India occurred majorly through land, followed by sea and air routes. This shift is largely due to an increase in India’s exports to Bangladesh – these increased 26.31% in 2017-18 and 6.96% in 2018-19 -and to India’s imports declining by 2.29% in 2017-18, then increasing extensively by 52.12% in 2018-19.

India’s exports to Bangladesh in 2018-19 largely consisted of cereals, broiler chickens, cotton, vehicles, mineral fuels, nuclear reactors, machinery, plastics, and iron and steel. Total exports from India to Bangladesh were worth US$ 9.210.06 million in 2018-19 – an increase of 6.92% from the previous year yet representing only 2.79% of India’s total exports.

According to Ministry of Commerce and Trade data (2019), India’s imports in the same year consisted primarily of textiles, engineering products and mineral products. Total imports by India from Bangladesh were worth US$ 1,044.80 million – an increase by 52.38% from the year before and representing 0.203% of India’s total imports.

India’s Trade with Bangladesh (values in USD million)

Year2013-142014-152015-162016-172017-182018-19
Imports484.34621.37725.15701.68685.651043.03
Exports6166.486451.476034.946820.118614.359214.22
Total Trade6651.317027.846726.046726.049299.9910257.25
Trade Balance5682.635830.105830.106118.427928.708171.19

Source: Directorate General of Commercial Intelligence and Statistics (DGCI&S)

In this export-import circumstance, ICP Petrapole is the largest gateway to Bangladesh contributing more than 35% of total exports and above 60% of overall imports. Indeed, the trade pattern between India and Bangladesh through land borders differs across states in terms of quantity and variety of product. While only few trade points across the international border are handling the bulk of trade, many of the trade points are yet to be operational. Nonetheless, the fact remains that above 46% of India’s exports to Bangladesh are routed by land through trucks, while 1% through railways and remaining 53% through sea or air routes.

According to the Central Board of Indirect Taxes and Customs (CBIC), the largest import duty payers- Marks & Spencer and VIP Industries are doing business through this border ICP since 2017-18. Other major companies using Petrapole to import goods include Reliance Retail, Raymond Apparel, Aditya Birla Fashion and Retail, and Puma Sports, while among the exporters, companies like Arvind, VE Commercial Vehicles- the manufacturer of Volvo and Eicher trucks, and automobile companies such as Ashok Leyland, Hero Motorcorp and Mahindra and Mahindra use this ICP to export goods. Tata Motors appeared as the biggest import duty payer in the last financial year.

Uncertainty prevails over opening

The country’s Ministry of Home Affairs (MHA) issued an order under the directions of the National Disaster Management Authority (NDMA) on May 01 stating that “No State/Union Territories shall stop the movement of cargo for cross land-border under Treaties with neighbouring countries” (Clause 12). The West Bengal government is unhappy with this decision over not being consulted before resuming trade through Indo-Bangla border at Petrapole.

According to a list released by the West Bengal government on 27 April, four districts, namely Howrah, North 24 Parganas, East Medinipur and Kolkata have been declared as red zones in the wake of the COVID-19 outbreak. Incidentally, the zone wise district list prepared by the central government has also identified 24 Parganas as red zones.

The Chief Secretary of West Bengal, Rajiva Sinha expressed that the state would not like any problem to arise in this situation as India shares a good relationship with Dhaka. The challenge remains how to release restrictions in these red zones at this time when the death toll is increasing day by day.

The state government has been apprehensive towards maintaining social distancing along with other restrictions of movements mentioned in the MHA order issued on May 01. It has been stated in the MHA order that all the mentioned restrictions on movements will remain operative for a period of two weeks with effect from May 04.

Against this backdrop, a large number of cleaning workers have been reluctant to undertake their job in fear of the virus. The Cleaning Agent Staff Welfare Association (CASWA) at Petrapole has welcomed the initiative to re-open border trade as the members of the association put forth the request to do so.

It seems very difficult to maintain social distancing while transferring goods from one truck to another. Under the circumstances, it has become a real challenge to keep a balance between maintaining social distancing and other suggested restrictions on movements of people and cargo and continuing border trade at Petrapole efficiently at a good pace.

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