DHAKA (Reuters) - India has agreed to lift tariff and quota restrictions on import of garments from Bangladesh, a government minister said on Wednesday, opening the way for an expansion in bilateral trade between the neighbours.
Garments account for over 80 percent of Bangladesh’s annual exports worth of more than $16 billion, and has been a mainstay of the economy.
“India has opened up its markets to Bangladeshi garments for duty and quota-free access that will boost our exports and help reduce a huge gap in trade, in favour of India,” Commerce Minister Muhammad Faruk Khan following talks with Indian leaders in New Delhi.
India earlier did not allow import of ready-made garments from Bangladesh or other countries under pressure from domestic industry.
Faruk said New Delhi also agreed to lift a ban on export of cotton, rice and wheat to Bangladesh. The two sides earlier this year vowed to boost bilateral ties through greater trade.
During Faruk’s trip, the two countries signed a deal to promote border trade along their long frontier. “This sort of legally permitted border markets will promote trade and good neighbourly ties between the peoples, and also reduce smuggling of goods across the borders,” he said.
Bangladesh imports goods -- mainly vehicles, chemicals, food items, fabrics, cotton and machineries -- worth more than $3 billion from India. India buys about $500 million worth of goods from Bangladesh, officials said.