Bangladesh’s trade with the South Asian Association for Regional Cooperation (SAARC) countries is declining, as reported by Bangladesh Bank. Total export earnings from SAARC countries fell from $1.93 billion in FY22 to $1.91 billion in FY23, marking a nearly 1% decrease. SAARC includes Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka.
In FY23, SAARC countries accounted for 3.44% of Bangladesh’s total exports, with Europe and the United States being major destinations. Despite a 6.28% year-on-year growth in overall exports, reaching $55.55 billion in FY23, exports to SAARC countries underperformed. Imports from SAARC nations also declined, making up only 15% of Bangladesh’s total import payments.
Total import payments to SAARC countries dropped from $14.93 billion in FY22 to $10.34 billion in FY23, a 31% decline. Central bank restrictions to address the dollar shortage led to an overall import decline of 15.76%, with imports from SAARC countries falling faster.
Fahmida Khatun, executive director of the Centre for Policy Dialogue, attributes the decline in trade to the dollar crisis and low comparative and competitive advantage. SAARC countries produce similar products, limiting trade opportunities. Additionally, Bangladesh lacks specialized products in demand within these markets.
Factors such as ease of doing business, port facilities, and laboratory capabilities also hinder trade growth. Export trends within SAARC are mixed: exports to India and Sri Lanka rose, while those to Nepal and Pakistan fell. Import payments to India, the largest trading partner within SAARC, decreased significantly by about 32% from $13.94 billion in FY22 to $9.49 billion in FY23.
Abdul Matlub Ahmad, chairman of Nitol Motors and president of the India-Bangladesh Chamber of Commerce and Industry, noted that reduced overall imports due to the dollar crisis and decreased domestic demand contributed to this decline. Additionally, India’s intermittent import bans on products like onions have impacted total imports.
Overall, import payments to Pakistan, Sri Lanka, and Afghanistan also fell, while Bhutan showed an upward trend and the Maldives saw a slight increase in import payments.
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