In the last SAARC summit the Heads of States emphasized implementing a number of agendas, many of which had been conceived earlier on. Shahab Ullah, Vice-Chariman of Export Promotion Bureau says this was the most significant outcome of the summit. "In particular, emphasis was placed on three areas-physical connectivity through building infrastructure projects, economic connectivity through free movement of goods and connectivity of ideas through exchange of people."

Bangladesh is a net importer of goods from other SAARC countries. Shahab Ullah is particularly anxious abont the huge trade gap between India and Bangladesh, in favor of the former. "If SAFTA is implemented effectively, Bangladesh will get duty free market access to India. We are a Least Developed Country and therefore it is very important for us to get such access to the Indian market."

There are already some positive signs. The government of India has proposed to provide duty free access for six million readymade garments produced from Bangladesh. It has also shown interest to provide market access facilities to Bangladeshi toiletry products such as soap, which are in demand in some parts of India.

But more needs to be done. "It will not be enough to just increase the number of items under tariff concessions. We have to urge the Indian authority to remove non-tariff and para-tariff barriers. Both countries should recognize the testing and certification authorities of each other." Shahab Ullah stresses the importance of frequent exchange of trade delegations among the countries and informs ET that EPB will soon organize single country trade fairs in Kolkata and Guwahati and both exporters and importers from Bangladesh will participate in those fairs.
There is also the need for improving physical infrastructure, like establishment of warehouse, power supply, telecommunications and cold storage on both sides of the borders and for increasing correspondence between the banks of the two countries. "Banks in Northeast India having foreign currency transaction and retention right should be allowed to make direct correspondence with banks in Bangladesh."

For FY 2006-2007, the Bangladesh government has set an export target of US$ 12.50 billion, which is 18.75% higher than the export (US$ 10.5 billion) of the previous FY. Although the target appears to be ambitious, EPB Vice-Chairman remains confident.

Already, the total export earnings during the first eight months of the current FY (July-February, 2006-2007) have crossed US$ 8 billion. "This is 64.19% of the total export target. We are hopeful that we will be able to meet the target, especially given both knit and the woven sectors continue to clock healthy export growth." And the healthy growth in readymade garments comes even after the withdrawal of quota on textile products worldwide and fall of unit price of readymade garments. The sector alone accounted for 75% of the total export earnings during the first half of FY 2006-2007.

But mission-wise, earnings from export to SAARC countries have fallen behind expectations. Bangladesh's missions in all the five SAARC countries-those in Colombo, Islamabad, Katmandu, New Delhi and Thimpu-all have failed to achieve export targets for the first half of FY 2006-2007.

Dissecting Sector-wise Performance

Data from EPB shows that for the first half of FY 2006-2007 export of woven, knitwear and frozen foods grew at more than 20% compared to export of the same products in the corresponding period of FY 2005-2006. At the same time, export of some products-notably tea, electronics, chemical fertilizers, melamine and vegetables-has suffered.
The frozen food sector is the second largest export sector of Bangladesh but contributes only 4.70% of the total export. Nonetheless, its growth in export in the first six months of the current fiscal was 18% higher than the target for the period.

The major importing countries of frozen foods are U.K, India, Saudi Arabia, U.S.A, China, Hong Kong, Kuwait, Canada, Thailand, Singapore and U.A.E.
Shahab Ullah says there are a number of reasons for the strong growth in frozen foods. Demand for frozen foods in world markets is rising as more and more people are becoming health conscious;