Transit to destroy local industries
Steelmakers air such fear
Shihabur Rahman
Iron and steel rod manufacturers fear that the transit facility offered to India will badly affect Bangladeshi industries, particularly theirs, in different ways.
They think the facility will 'destroy' the present market of their products in the seven northeastern states of India -- Arunachal, Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura -- and mar the potential of further export.
Leaders of three associations of rod manufacturers -- Bangladesh Auto Re-rolling and Steel Mills Association (BARSMA), Bangladesh Steel Mill Owners' Association (BSMOA) and Bangladesh Re-rolling Mills Association (BRMA) -- discussed their concerns at a joint meeting Saturday.
They have decided to take up the matter with the government shortly.
The transshipment of Indian goods to the landlocked northeastern states, called Seven Sisters, through Bangladesh territory began in mid-June this year under the Protocol on Inland Waterways Trade and Transit (PIWTT) between the two next-door neighbours.
The first consignment, comprising iron products, arrived at port of call at Ashuganj in Brahmanbaria from Kolkata on board an Indian ship on June 17 and it was then taken to Agartala, the capital of Tripura.
Bangladesh levies a fee of Tk 192.22 per tonne for such transshipment.
The country gets another Tk 50 per tonne for providing security to the consignment from Ashuganj to Akhaura and Tk 10 for shipment of per-tonne goods through two channels -- Mongla-Ghosiakhali and Gabkhan.
The transit has reduced the distance between the eastern and northeastern parts of India to almost one-third as currently goods travel through Siliguri corridor to the northeastern states.
BARSMA Chairman Sheikh Masudul Alam Masud said Bangladesh will fail to tap the potential market worth billions of dollar in the Seven Sisters only for the meagre fees from India.
Bangladesh currently exports cement, rod, ceramic, beverage, garments, plastic goods, melamine, cosmetics, etc to India's northeast.
"The volume of rod export to the northeastern India is still not significant. But we had the potential to raise it substantially. However, the transit facility has destroyed it," he said.
According to exporters, India allows duty-free access of many Bangladeshi products to its market but the governments of the northeastern states have now imposed 15 per cent VAT on sale of those, blunting the competitive edge of the Bangladeshi goods.
"Now the state governments are urging Bangladeshi entrepreneurs to invest there, but we are not in a position to do so to maintain our market," said BRMA Vice President Sirajul Islam.
Re-rolling and steel-mill owners also fears penetration of Indian goods, meant for transshipment, into Bangladesh market.
"There is every chance that the Indian products bound for the Seven Sisters will end up selling on Bangladesh market," said Masud.
He referred to the smuggling of a huge amount of contraband Phensedyl syrup from India into Bangladesh every year to substantiate the fears.
"Phensedyl made in India is illegal in Bangladesh. But can we stop it from coming in here," he questioned.
Rod manufacturers will advise the government to raise the transshipment fee substantially so that the prices of Indian products increase and come at par with Bangladeshi goods in the northeastern states.
They will also request the government to check penetration of Indian goods, destined for the seven states, into Bangladesh market.
Shipping Minister Shajahan Khan told an event that marked the beginning of the transshipment that the fee would increase to Tk 700-800 per tonne when the 'system would be automated' and other facilities ensured.
It may be mentioned here that CPD recommended tariff at around Tk. 1000 per tone for transshipment. The rate being paid is around one fifth of that amount.
This will create huge issues locally in business circles and cannot be ignored.
