The SAARC (South Asian Association for Regional Cooperation) member countries see the lowest volume of transnational trade among the all regional alliances in the world as cross-border trade is not boosting among the SAARC countries as much as expected due to various political complexities.
Likewise trade relation is also low between Bangladesh and the SAARC countries. Export receipts of Bangladesh from SAARC countries stood only 4.47 per cent of its total export volume while and import payments accounted 15.44 per cent to the total amount in the 2023-24 fiscal year, according a latest report of Bangladesh Bank.
Imports to SAARC countries also decreased since the 2021-23 fiscal.
The central bank released ‘A Report on Export Receipts, Import Payments, Remittances Inflow and Foreign Direct Investment Net Inflow of Bangladesh with SAARC countries’ for the 2023-24 fiscal recently.
The report said Bangladesh’s export earnings from SAARC countries stood over USD 1.74 billion and import payments at over USD 9.76 billion. Overall, SAARC countries carry only of 5 per cent of their total trade among themselves – the lowest among all regional alliances in the world. That is why South Asia is said to be the least connected region in the world.
According to the report, India became the largest export and import destination for Bangladesh among the SAARC countries as about 90 per cent of export receipts of goods of Bangladesh and 92.19 per cent of import payments were made in favour India.
In 2023-24 fiscal, Bangladesh’s export earrings stood approximately USD 1.56 billion from India, USD 62.1 billion from Pakistan, approximately USD 55 million from Sri Lanka, USD 43.3 million from Nepal, USD 14.2 million from Afghanistan, USD 9.1 million from Bhutan and approximately USD 4.1 million from Maldives.
Within SAARC region, Bangladesh exported textile, animal or vegetable oils, raw hides, leather, plastic and rubber, footwear, mineral products, machinery and machinery appliances to India; textile, chemicals, plastic , rubber, base metals and footwear to Pakistan; products of the chemical or allied industries, pulp of wood, plastic and rubber, footwear, machinery and machinery appliances to Sri Lanka; chemical products, textile, prepared foodstuffs, beverages, spirits and vinegar to Afghanistan; prepared foodstuffs, vinegar, mineral products and plastic to Bhutan; prepared foodstuffs, drinking water, textile, products of chemical or allied industries, plastic, rubber, mineral products to Nepal; and prepared foodstuffs; beverages, spirits and vinegar, vegetable products, and textiles and textile articles to Maldives.
In the 2023-24 fiscal, import payments from Bangladesh stood about USD 9 billion to India, about 40 million to Bhutan, USD 11.9 million to Afghanistan, about 630 million to Pakistan, USD 4.23 million to Nepal, about 3.5 million to Maldives and 75.9 million to Sri Lanka.
Remittance, FDI
Bangladesh sends fewer workers to various South Asian countries. “The percentage of remittance inflow from SAARC region out of the total remittance inflow in Bangladesh is approximately less than 1 per cent. In the 2023-24 fiscal, the total remittance inflow in Bangladesh is over USD 2.39 billion while, for SAARC countries, it is only USD 82.98 million,” the report said.
Within SAARC region, the maximum proportion of remittances came from the Maldives and which was 68.6 per cent, while it was 23.1 per cent from India. Remittance inflows from other SAARC countries are considerably negligible.
In the 2023-24 fiscal, Foreign Direct Investment (FDI) net inflow into Bangladesh from SAARC region stood only 16.2 per cent of the total FDI or approximately USD 240 million of the total USD 1.47 billion in FDI.
The data suggests a notable shift in import payments dynamics, with Bangladesh importing less from its neighboring SAARC countries. Various factors, including economic conditions, trade policies, or other geopolitical considerations may be considered to influence this situation, the report said.