Framed with the reported objective to check inbound shipments of low-quality products and dumping of goods by a third country routed through an FTA partner country, India’s new rule to determine the country of origin of a product would have an adverse impact on exports from Bangladesh to India.
According to media reports, both the Export Promotion Bureau (EPB) and the Bangladesh Trade and Tariff Commission (BTTC) have underlined this while adding that the rules of origin (RoO) – the Indian authority issued a notification termed Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 in August, in this regard – are not consistent with the trading agreements, particularly the treaty on the South Asian Free Trade Area (SAFTA).
As per these Government agencies, India’s new customs rules stand to undermine efforts to narrow the trade imbalance between the two countries.
The BTTC reportedly found that some of the provisions contradict with those with the SAFTA RoO – Under the SAFTA, most of the exports from the least developed countries (LDCs), including Bangladesh, get duty-free entry to India based on a document termed as the certificate of origin (CoO) – and Operational Certification Procedures or OCP.
Coming into force in January 2006 to increase intra-regional trade in South Asia which accounts for about 5 per cent of the total trade of the region, SAFTA comprises eight members of the South Asian Association for Regional Cooperation or SAARC namely Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
According to the reports which cited unnamed Commerce Ministry officials, BTTC scrutinised the new rule in light of SAFTA’s RoO and the OC.
Following the issuance of the said notification by India, the Commerce Ministry reportedly sought opinions from the BTTC and the EPB in this regard.
