Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), comprising seven countries including Bangladesh, has prioritized trade but has not made significant progress in enhancing trade among its members. Since its inception in 1997, BIMSTEC has struggled to reduce tariff and non-tariff measures, streamline regulatory frameworks, and harmonize standards.
The third Bay of Bengal Economic Dialogue 2024, held in Bangkok, highlighted these issues and called for the acceleration of the BIMSTEC Free Trade Area (FTA) finalization. The dialogue recommended that the FTA should be concluded within a year, emphasizing the need for prioritizing trade and transit facilitation, energy, and digital connectivity.
The declaration suggested that productivity enhancement, knowledge exchange, mutual recognition of standards, paperless trade, and currency cooperation would make the BIMSTEC FTA more effective. It also proposed setting up a digital dashboard to monitor trade barriers.
Intra-regional trade within BIMSTEC remains low at around 7% of total trade, although higher than the SAARC region, it lags behind ASEAN’s 25%. A lack of political commitment from member country leaders is seen as a major barrier to BIMSTEC’s progress.
Despite these challenges, the declaration noted BIMSTEC’s unique advantages, such as geographical contiguity, abundant natural and human resources, and shared cultural heritage. BIMSTEC’s strategic location offers high trade potential and economic complementarities, particularly in garments (Bangladesh), digital services (India), maritime services (Sri Lanka), consumer durables (Thailand), and tourism (Nepal and Bhutan). Maritime and digital connectivity were identified as crucial for trade and security, positioning BIMSTEC to bridge South Asia and Southeast Asia.
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