Indian investment seen vital to boost economy

An expert on cross-border trade and regional economic relations has suggested for taking targeted initiatives to attract more Indian investment, which is seen vital to drive the economy to the higher growth trajectory.

‘From Bangladesh perspective, encouraging Indian investors to invest more in Bangladesh should be seen as a key strategic driver of the country’s economic growth’, Professor Mustafizur Rahman, Executive Director of the Centre for Policy Dialogue (CPD), told BSS on Wednesday.

He said foreign direct investment (FDI) in Bangladesh from India has still remained at a low level and limited to a few sectors even though there are lots of scopes for doing good business by the Indian entrepreneurs.

Among the opportunities, Prof. Rahman said Bangladesh’s duty-free access to developed countries offers Indian investors a unique avenue to get good return, with taking advantage of preferential market access to many countries.

Referring to the Indian proposal for setting up two Special Economic Zones (SEZs) in Bheramara, Kushtia and Mongla, Khulna, he said the government should also offer some incentives to the potential Indian investors to attract more FDI in the two proposed SEZs.

He recommended that targeted initiatives should be taken to attract Indian FDI in several areas and increase export to the neighbouring country.

‘These initiatives could include diversifying export basket destined for India, addressing the non-tariff barriers (NTBs), enhancing export to north-east India and promoting greater connectivity with India and the region within a win-win scenario’, Prof. Rahman noted.

He said India already offered Bangladesh duty-free access to its market, but the duty-free market access would have only a limited impact in terms of raising Bangladesh’s exports to India if other complementary steps and measures are not taken.

In this context, he said a comprehensive mechanism; including signing of a framework agreement and improvement of trade-related infrastructure at border and customs points should put in place to deal with the NTBs that severely constrain intra-regional trade with India.