Gazi Anowar :
Bangladesh’s trade deficit with India has seen a marked reduction over the past six months, from November 2024 to April 2025, driven by a combination of policy adjustments, moderated imports, and evolving bilateral trade trends.
While official figures for this six-month period are yet to be released, data from July to November 2024 suggest a noteworthy improvement in Bangladesh’s overall trade position.
The trade deficit declined to $6.68 billion from $9.86 billion in the corresponding period of the previous fiscal year. This improvement was primarily attributed to a 12.3 per cent increase in readymade garment (RMG) exports and a modest 1.2 per cent decrease in imports.
Nevertheless, the bilateral trade relationship with India remains heavily skewed. In the 2023-24 fiscal year, Bangladesh’s exports to India amounted to approximately $1.85 billion, while imports reached around $11.07 billion, leaving a trade deficit exceeding $9 billion.
The key factors driving the imbalance are mainly energy imports, non-tariff barriers (NTBs) and export concentration.
A major contributor to the widening trade gap has been electricity imports from India’s Adani Group’s power plant in Godda, Jharkhand. In FY24, Bangladesh’s power import bill from India totalled Tk 194.12 billion.
Bangladeshi exporters continue to face market access constraints in India due to stringent non-tariff barriers, particularly around health, hygiene, and technical compliance.
Bangladesh’s export basket remains overly reliant on the RMG sector. Notably, in FY24, knitwear exports to India dropped by 34.05 per cent, while woven garment exports declined by 11.79 per cent year-on-year.
Dr Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), noted that “the trade deficit with India is not merely a statistical issue but a reflection of structural limitations in export diversification, quality assurance systems, and market entry challenges.
” He stressed that for long-term balance, Bangladesh must transition from low-value to higher-value exports, particularly in sectors such as pharmaceuticals, agro-processing, and ICT.
M Zakir Hossain Khan, Chief Executive of Change Initiative, told The New Nation that “reducing our dependency on Indian imports-especially consumer goods and intermediate raw materials-is critical.”
He advocated for strategic sourcing from alternative partners such as the United States, China, the European Union, and ASEAN countries to mitigate dependency and bolster global integration.
Experts have proposed several strategies to reduce the bilateral trade imbalance such as export diversification, standards compliance, improved market access and import substitution.
Expanding the export portfolio include pharmaceuticals, leather products, agro-goods, and ICT services. Strengthening the institutional capacity of the Bangladesh Standards and Testing Institution (BSTI) to meet Indian regulatory requirements and secure mutual recognition agreements.
Engaging with Indian counterparts to negotiate duty-free access for a wider array of Bangladeshi products, similar to provisions extended to other SAARC Least Developed Countries (LDCs) and reducing reliance on Indian imports by sourcing high-value goods from alternative countries such as the US, thereby rebalancing trade flows and reducing strategic vulnerabilities.
While recent data signals progress, analysts agree that ensuring a sustainable and equitable trade relationship with India will require long-term structural reforms, investment in value-added sectors, and greater diplomatic engagement.
