As talks on a free trade agreement between members of Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) are taking longer than expected, India has proposed a preferential trade agreement (PTA) with them to foster intra-regional trade. The idea of a PTA was proposed by Commerce and Industry Minister Piyush Goyal at the BIMSTEC Business Summit, emphasizing the need to examine the realistic possibility and move forward on a fast-track basis.
BIMSTEC is a grouping of countries in South Asia and Southeast Asia, including Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan, and Nepal. The framework agreement on the BIMSTEC FTA was signed in 2004, and since then, 22 rounds of negotiations have been held without conclusive results. Goyal urged BIMSTEC members to re-examine their priorities regarding trade negotiations to finalize the delayed FTA.
The delay in the FTA calls for a reassessment of the reasons behind it, with members needing to come up with recommendations acceptable to all seven countries. Goyal stressed the importance of introspection on current trading relations, noting the small volume of trade among BIMSTEC countries. He highlighted the need to focus on reducing trade deficits, strengthening trade facilitation measures, and enhancing partnerships in e-commerce and digital infrastructure.
To improve trade relations, Goyal suggested focusing on strengthening supply chains, removing tariff and non-tariff barriers, adopting international norms for trade facilitation, and enhancing transport connectivity. He emphasized the importance of computerizing border controls, expediting import-export processes online, and implementing measures to improve Ease of Doing Business.
India’s total trade with BIMSTEC countries in 2023-24 amounted to $44.32 billion, with Thailand being India’s largest trading partner within the bloc. Goyal expressed concern about the evolving situation in Bangladesh and conveyed best wishes for a smooth transition and bright future for the people of Bangladesh.
In conclusion, the proposal for a preferential trade agreement by India reflects the need for expedited measures to enhance intra-regional trade within BIMSTEC. The focus on addressing trade deficits, strengthening trade facilitation measures, and improving connectivity underscores the commitment to fostering economic cooperation and growth among member nations. By reevaluating priorities and implementing strategic recommendations, BIMSTEC can overcome the challenges in finalizing the FTA and achieve mutually beneficial outcomes for all countries involved.