Piyush Goyal Pushes For Faster BIMSTEC FTA Talks

Union Commerce and Industry Minister Piyush Goyal on Wednesday called upon the Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation (BIMSTEC) members to introspect on the current trading relations and noted that the trade among them is small. 

While speaking at the BIMSTEC business summit 2024, he said that member nations should re-examine the priorities of trade negotiations so that the delayed Free Trade Agreement (FTA) can be finalised. Goyal stated, “There’s a long way to go before we can achieve its full potential.” 

The minister called for deeper integration amongst the member nations to provide honest feedback and help strengthen trade facilitation and cross-border movement of goods. He said, “There should be a focus on reducing trade deficit, strengthening of trade facilitation measures to strengthen partnership in ecommerce, digital public infrastructure and better integration of custom borders with the aid of technology.”

Goyal noted that there is a need for computerisation of border controls and faster clearances of the import-export online application processes which will help in ease of doing business. The minister said that there should be a focus on strengthening supply chains, removal of tariff and non-tariff barriers and strengthening trade facilitation measures by adopting international norms and seamless transport connectivity, he mentioned.

The minister expressed hope for greater integration of startups and entrepreneurs of the seven member countries to assist in investment, trade and tourism. He also urged the member nations need to encourage technology and foster agricultural cooperation to secure food security, healthcare and human resource development among each other.

Much Needed Free Trade Agreement
Talking about BIMSTEC FTA, Goyal added that the members need to come up with a set of cogent recommendations that are acceptable to all seven countries. He called for the Trade Negotiating Committee and the business community to consider a preferential trade agreement, to begin with to foster intra-regional trade and investment and enhance regional competitiveness.

With a total population of 1.7 billion, or 22 per cent of the world's population, BIMSTEC countries have the potential to contribute to the global economy and each other, as per a report by the Confederation of Indian Industry (CII). Their total gross domestic product (GDP) is currently about USD 4.5 trillion but the region can achieve faster future growth rates through better economic integration. 

Notably, BIMSTEC’s primary focus is economic and technical cooperation among the countries of South Asia and Southeast Asia that are geographically around the Bay of Bengal. BIMSTEC is a grouping of countries such as Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal.

Industry body CCI in its BIMSTEC business summit report recommended that BIMSTEC must together add more areas of cooperation to its ambit. It emphasised expanding skill development to leverage the young workforce, evolve methodologies for ecommerce cooperation, boost digital public infrastructure and digital access, and foster women-led development. 

“All of these can be disseminated via best practices followed by member countries, such as women’s participation in economic development in Bangladesh, ecommerce in Thailand, and digital public infrastructure in Indi,” according to the report.

It also urged the industry members of the region to engage with partner BIMSTEC members through strengthening regional value chains which will feed into global value chains. Given that many of the regional economies have similar export baskets and competencies, enhancing trade and strengthening economic cooperation will be achieved with the establishment of multinational joint production facilities along the border zones.

Conflict-ridden Bangladesh
Speaking on the situation in Bangladesh, Goyal expressed deep concern over the developments and wished for a bright future and a smooth transition of governance for the nation. Notably, on August 5, Bangladesh Prime Minister Sheikh Hasina resigned from her position. Nobel laureate Muhammad Yunus has been appointed as the head of Bangladesh's interim government.

As India's neighbour Bangladesh continues to face unrest across the nation, experts noted that the Indo-Bangladesh trade is facing challenges. Both nations have been crucial trading partners, involved in a major exchange of goods and services. In FY 2023-24, total trade between nations was Rs 1,35,285 crore. India's exports to Bangladesh totalled Rs 91,614 crore, while imports from Bangladesh stood at Rs 15,268 crore, resulting in a trade surplus of Rs 76,346 crore in India's favour, according to the Ministry of Commerce.

Blue Economy And Trade
On the blue economy, the minister said the member states have a thriving blue economy or demand of ocean products enhancing livelihoods and job creation while preserving marine and coastal ecosystems. He further said that regional value chains can add to agricultural and mineral produce to become a developed region.

Notably, BIMSTEC enjoys unique development opportunities due to its interconnected landscapes of mountains, rivers and sea. The Bay of Bengal, linking several member states, has served as a central hub for trade, commerce, and culture for centuries and is the gateway to the Indian Ocean for most BIMSTEC countries. 

Additionally, Nepal, Bhutan, Myanmar and India have extensive mountainous regions. “Therefore, the potential of the blue economy and mountain economy should be optimally harnessed. The private sector can play a key role in exploring specific sectoral opportunities,” CCI added in its report.

Abhishek Sharma

BW Reporters The author is a senior correspondent at BW Businessworld