A report by Indian think-tank CUTS International has highlighted potential concerns for India regarding the proposed Bangladesh-Japan Free Trade Agreement (FTA) and its impact on trade dynamics. The report suggests that if Bangladesh offers zero duty on all products to Japan under the FTA, it could adversely affect India’s exports to Bangladesh, particularly in sectors such as automobiles, metals, electrical, and textiles. To address this, the report recommends that India closely monitors the progress of the FTA negotiations and takes proactive measures to safeguard its trade interests.
Additionally, the report underscores the importance of strengthening existing trade ties with Bangladesh, diversifying export markets, and enhancing competitiveness to navigate changing trade dynamics effectively. While India currently enjoys tariff advantages in Japan, the report warns of potential challenges posed by Bangladesh’s growing textile and apparel sector. However, it suggests that India is unlikely to experience significant market share loss in Japan for textile and apparel products.
Nevertheless, precautionary measures are recommended to mitigate potential risks. The report also highlights the importance of ongoing negotiations between Bangladesh and Japan, particularly in light of Bangladesh’s scheduled graduation to a developing nation in 2026. As Bangladesh pursues preferential trade agreements with major trading partners, including Japan, the report emphasizes the need for comprehensive trade deals to secure long-term benefits.
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