India-Bangladesh set for CEPA

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India-Bangladesh set for CEPA- Relevance for UPSC Exam

General Studies II-Bilateral, Regional and Global Groupings and agreements involving India.

India and Bangladesh will soon commence negotiations on a Bilateral Comprehensive Economic Partnership Agreement (CEPA).

India is Bangladesh’s second biggest trade partner, and its largest export market in Asia.
Despite Covid-19 related disruptions, bilateral trade grew at an unprecedented rate of almost 44 per cent from $10.78 billion in 2020-21 to $18.13 billion in 2021-22.
In 2021-22, Bangladesh has emerged as the largest trade partner for India in South Asia and the fourth largest destination for Indian exports worldwide.
India’s main exports to Bangladesh are raw cotton, non-retail pure cotton yarn, and electricity, and its main imports from the country are pure vegetable oils, non-knit men’s suits, and textile scraps.

The partnership agreement or cooperation agreement is more comprehensive than a Free Trade Agreement (FTA).
CECA/CEPA also looks into the regulatory aspect of trade and encompasses an agreement covering the regulatory issues.
CECA have the widest coverage. CEPA covers negotiation on the trade in services and investment and other areas of economic partnership.
It may even consider negotiation in areas such as trade facilitation and customs cooperation, competition, and IPR.
India has signed CEPAs with South Korea and Japan.

While informal talks on CEPA have been happening since 2018, officials said that the pandemic has brought urgency.
Chinese investments were an initial trigger for India, but New Delhi and Dhaka want to step up the pace following the economic shock faced by the two economies.
The CEPA is likely to focus on trade in goods, services, and investment, with a key objective being the reduction of the trade gap between the two countries.
As Bangladesh prepares to graduate into a developing nation by 2026 — after which it may no longer qualify for trade benefits that it currently enjoys as a least-developed country — it is keen to clinch the CEPA in a year.

The current institutional frameworks for trade and investment include:

During the visit of Prime Minister Modi to Bangladesh in June 2015, the bilateral trade agreement between the two countries was renewed for a period of five years with a provision for auto renewal.
Under the provisions of the South Asian Free Trade Area (SAFTA), Bangladesh extends preferential tariffs to Indian exports of products outside the ‘sensitive list’ of 993 items.
In 2011, India announced duty-free, quota-free access to Bangladesh for all tariff lines except tobacco and alcohol.
An Agreement on Promotion and Protection of Investments has been in force since 2011.
Joint Interpretative Notes to the agreement were signed during the visit of the Indian Finance Minister to Bangladesh in October 2017.
To facilitate trade and transit through inland waterways, a Protocol on Inland Waterways Trade and Transit (PIWTT) has been in place since 1972. It was renewed in 2015.
Direct sea movement of containerized/ bulk/ dry cargo began after the signing of a Memorandum of Understanding (MoU) on Coastal Shipping in June 2015.
MoUs were signed in 2015 on the use of the Chittagong and Mongla Ports for Movement of Goods to and from India.
The MoU on Border Haats on the India-Bangladesh border was renewed in April 2017 during the visit of Prime Minister Hasina to India. Currently, four Border Haats — two each in Meghalaya (Kalaichar and Balat) and Tripura (Srinagar and Kamalasagar) — are functional.

Students can check the Types of Trade agreements from the link given below

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