‘Trust deficit’ hampering seamless movement of goods between India, Bangladesh: World Bank  

Context: A World Bank Report stated that seamless movement of vehicles between the two neighbouring countries for trade could raise India’s national income by eight per cent and Bangladesh’s by 17 per cent; provide faster and cheaper access to products from Northeast and boost real income in states such as West Bengal, Uttar Pradesh and Maharashtra.

Details:

• Commenting that a “broad trust deficit throughout the region” was a major reason behind lack of seamless transport between the two countries, the report found that it is about 15-20 per cent less expensive for a company in India to trade with a company in Brazil or Germany, than with a company in Bangladesh, despite the two neighbours being party to an international motor vehicles agreement.
• The release of the report, “Connecting to Thrive: Challenges and Opportunities of Transport Integration in Eastern South Asia,” coincided with Prime Minister Narendra Modi and his Bangladesh counterpart Sheikh Hasina inaugurating the Maitri Bridge on river Feni via video conferencing. The bridge significantly reduces the distance between the southern tip of Tripura and Ramgarh in Bangladesh.

Background:

• In 2015, both India and Bangladesh signed the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement.
• For the first time, the World Bank has analysed the pact from the perspective of the two countries and said that a “trust deficit” between the two countries was a major reason why there was, despite the pact, no seamless movement of cargo between the two countries.
• Among the major “gaps” that the two countries need to address in the MVA include inadequate transport infrastructure, protective tariffs and nontariff barriers, and a broad trust deficit throughout the region, it says.
• Without these gaps, free movement of cargo between the two countries could yield a 297 percent increase in Bangladesh’s exports to India and a 172 percent increase in India’s exports to Bangladesh.
• Currently, despite the agreement, trucks from one country are not allowed to enter the other. The cargo is transloaded, adding to transport and trade costs.
• The study makes a case for a shorter route through Bangladesh, instead of through India, for products from Northeast states reaching a port.
• India’s northeast states are connected with the rest of India only through the Siliguri corridor, or the “chicken’s neck”.

https://indianexpress.com/article/india/trust-deficit-hampering-seamless-movement-of-goods-between-india-bangladesh-world-bank-7221737/