Stakeholders’ Conference on Assessing
Bangladesh-India Trade Potentiality, 15-16
November, 2013, Kolkata
Major Findings and Recommendations
from Phase I and Plans for Phase II
Prithviraj Nath, Consultant, CUTS International
Nilanjan Banik, Consultant, CUTS International
Phase I: Brief Idea
The overall goal of the study was to frame policy
proposals for improving India-Bangladesh trade
through land route which will in turn generate
welfare outcomes such as new market opportunities
for small-scale manufacturing and agrarian sectors,
especially for border states.
Phase I: Brief Idea
• Primary Research Undertaken at five major Land Custom
Stations (LCS)viz. Petrapole, Ghojadanga, Hili, Mahdipur,
Changrabandha
• Looked at the transportation, infrastructure, regulatory,
process-related, capacity and manpower related
bottlenecks in trade through land route
• Studied Border Haats at Meghalaya and Tripura to
understand potential benefits that can accrue by
replicating them at other locations along the border
Issues identified through
Survey at the Land Custom
Stations
Better, Two-lane Approach Roads Needed
• Absence of Central Warehousing
Corporation (CWC) controlled
parking and warehousing facilities
• Absence of Weigh Bridges
Absence of Plant Quarantine (PQ)
facilities
• Need for e-enabling of documentation
and checking systems to reduce delays
• Need to improve IT infrastructure and
allocate trained Manpower
• Bank Branches with all facilities needed
at LCS
Need for Full time Custom officials and better
infrastructure for offices/quarters
Border Haats are successfully
generating Economic Benefits
for the border villages
Recommendations
• Improve PQ facilities. Alternatively look at harmonising SPS
regulations across the border through a SPS related agreement
between the nations.
• Signing of the Motor Vehicle Agreement
• Better Utilisation of Existing Railway links to ease pressure on
road route and enhance trade volume
• Improving and Regulating Trade Services
• Replication of Border Haats at New Locations
• Reduce the respective Sensitive List
Phase II
The overall objective
recommendations for:
of
the
study
is
to
frame
policy
• Signing and operationalizing of the Motor Vehicle Agreement
and drafting/signing of a SPS Agreement between India and
Bangladesh, hence to benefit and ease the efforts of the traders.
• Replicating Border Haats along the India-Bangladesh border
towards leveraging the economic and social benefits accruing out
of it.
Activities:
• Primary Survey at some of the major LCSs in the states of
West Bengal, Tripura, Assam, Meghalaya and Mizoram
• Focused Dialogues with exporters and export associations
• High level Inter-Ministerial meetings with government for
reviewing draft MVA Agreement and also for proposing
SPS agreement in India
• Track 2 meeting involving government and stakeholders
of both the countries
Data
Primary Survey
Mapping land custom movement of Goods across time
period
Mapping movement of goods before and after SPS measures
Mapping to be done across major export items (HS Code
specific)
Outcome Variable (General)
• Nature of goods exported – perishable vis-à-vis non
perishable
• Red tape at the LCS (paper works and government policy)
• What can be done?
Outcome Variable (Specific)
• Truck movement time between Kolkata and
Petrapole
• Waiting time and cost of waiting at border
• Status of warehouse facilities
• Status of banking facilities
• Bribe payments, extortion and pilferage
• Soft infrastructure (Cargo scanner, IceGate, Internet
facilities, etc.)
• Measures for improvement/ Alternatives?
Analytical Framework
Following, Krueger (1990), Kohli (1991) and Paulino
(2002):
Export Demand Function
Motor Vehicle Act
log X it  a 0i  g log RERX it  rTt  a 0 log(
Pi
Pw
)  a1 d1Tt  a 2 d 2  a3 dist  u it
Sanitary and Phytosanitary Dummy
log X it  a 0i  g log RERX it  a 0 log(
Pi
Pw
)  a1 d  u it
Expected Outcome
• If exports are price elastic then we would expect
positive sign for the coefficient on exchange rate
variable.
• If exports are indeed competitive then expected
sign on relative price variable is negative.
• Effect of Sanitary and Phytosanitary sanction can
be captured through dummy.
• The coefficient on distance variable can be used
for counterfactual evidence to measure impact of
Motor Vehicle Agreement.
Expected Outcomes
• Better understanding by policy makers on issues and concerns with
respect to the present draft of the MVA agreement
• Better understanding and consensus on the elements and components
that need to be further incorporated into the document for better
acceptance by all stakeholders.
• Triggering the process of drafting of SPS agreement and expediting the
signing of the MVA agreement between India and Bangladesh
• Better understanding on the benefits of Border Haats and higher
consensus on replicating of such Haats along other locations along the
India-Bangladesh border
• Removal of barriers to trade and enhanced trade volumes between the
two nations in the long run
Expected Outcomes
• Better understanding by policy makers on issues and concerns with
respect to the present draft of the MVA agreement
• Better understanding and consensus on the elements and components
that need to be further incorporated into the document for better
acceptance by all stakeholders.
• Triggering the process of drafting of SPS agreement and expediting the
signing of the MVA agreement between India and Bangladesh
• Better understanding on the benefits of Border Haats and higher
consensus on replicating of such Haats along other locations along the
India-Bangladesh border
• Removal of barriers to trade and enhanced trade volumes between the
two nations in the long run
Thank You
pn@cuts.org, 91-09830481370
nilanjanbanik@gmail.com,