India to relax commodity export restrictions for Bangladesh, Modi assures Hasina

New Delhi will relax export restrictions for Dhaka to stabilise the market for key staples such as sugar, onions, rice, and wheat, Indian Prime Minister Narendra Modi has assured his Bangladesh counterpart Sheikh Hasina.

"Prime Minister Sheikh Hasina spoke to the Indian prime minister. India will relax export restrictions on onions and other consumer goods for Bangladesh. The prime minister conveyed this message to me," said State Minister for Commerce Ahsanul Islam Titu on the first day of his office.

In a briefing at the Secretariat on Sunday, he said Sheikh Hasina passed on the information during an informal cabinet meeting held in Tungipara, Gopalganj, on Saturday.

On 8 January, Narendra Modi called Sheikh Hasina and congratulated her on her historic fourth consecutive term victory in the national elections held the day before.

During the telephone conversation, the two leaders also discussed various bilateral issues.

"Various consumer goods, including onions, are imported from India. I will personally hold a meeting with the Indian commerce minister to stabilise the domestic market. I will discuss the regular import from India to maintain the normal market situation in Bangladesh," he said.

Bangladesh is heavily dependent on India for the import of various consumer goods, including rice, wheat, onions, and potatoes. Around 80% of these products are imported from India. At various times, if India imposes a restriction on the export of any of these products, the price of the product in the Bangladesh market immediately increases.

Therefore, Bangladesh aims to continue importing from India regularly to maintain stability in the country's consumer goods market. As part of this, Bangladesh has requested a quota of 1.5 lakh tonnes of rice, 20 lakh tonnes of wheat, 10 lakh tonnes of sugar, 6 lakh tonnes of onions, 1 lakh tonnes of ginger, and 50,000 tonnes of garlic from India every year.

Although India has assured Bangladesh about quotas on these products, the neighbouring country has imposed restrictions on the export of wheat, rice, sugar, onions, and potatoes to stabilise its own domestic market.

Bangladesh imports an average of 6 lakh tonnes of onions from India every year. Additionally, before the export ban in May 2022, 62% of Bangladesh's total wheat demand was met through imports from India.

Last fiscal year, Bangladesh imported rice worth $513 million, with 63.8% of it sourced from India.

In 2019, onion prices in Bangladesh crossed Tk250 per kg due to India's immediate stoppage of exports. Since then, the prime minister and commerce minister have requested that the Indian government inform Bangladesh before imposing a ban on the export of any product. However, India did not comply with that request.

On Saturday, the prime minister directed ministers to stabilise the consumer goods market and ensure a normal supply of goods ahead of Ramadan. To achieve this, she has instructed the ministries of finance, commerce, food, agriculture, and industries to work together.

Despite the Awami League's pledge in its election manifesto to reduce food prices, including rice, its price has increased by at least Tk5 per kg in both wholesale and retail markets in the first week after the polls held on 7 January.

Traders attribute the price hike to syndicates and the recent national elections' aftermath, impacting prices at all levels.

Referring to one of the prime minister's instructions to maintain normal product prices during Ramadan, Finance Minister Abul Hassan Mahmood Ali told reporters on Sunday that the finance ministry will work in coordination with the commerce ministry to ensure product prices remain stable.

Ahsanul Islam Titu said the freight charge is increasing due to the Ukraine-Russia and Israel-Hamas conflicts. Besides, commodity prices are also rising due to the depreciation of the taka against the dollar and the increasing prices in the international market.

"We will try our best to keep the market stable by increasing the supply of products in the market," he asserted.

"We want to control inflation through proper market management. Traders have nothing to fear. However, if anyone hoards or tries to artificially increase the price of goods, immediate action will be taken against them," he warned.

A few large traders and big corporations import various products, including edible oil and sugar, he said, adding, "These big players will be brought under transparency and accountability."

To reduce the prices of goods, Titu said, the delivery time will be shortened, and efforts will be made to ensure a seamless supply system from producers and importers to consumers.

"Providing relief to consumers will be our main task. Unscrupulous traders will be dealt with firmly. There will be no syndicate in Bangladesh," he asserted.

Pointing out that the government has ample tools to stop syndicates and manipulators, he said, "We will visit big producers and big markets. If they encounter any problems, initiatives will be taken to resolve them."

He said earlier letters were sent from the commerce ministry to various ministries and government organisations to keep the supply of goods normal. "From now on, the letter will either be accompanied by the commerce secretary, or I will go in person and do the work hand in hand," he added.

He said earlier letters were sent from the commerce ministry to various ministries and government organisations to keep the supply of goods normal.

"From now on, the letter will either be accompanied by the commerce secretary, or I will go in person and do the work hand in hand," he added.

The state minister said, "I have sought the help of the finance minister and other ministers in front of the prime minister on Saturday to provide relief to consumers through market management."

He also said a team will be formed with the ministries of commerce, agriculture, finance, food, and industries to control product prices.

On Sunday, the first working day after taking the oath as the state minister, he said the commerce ministry would compare the prices of various commodities with the daily market rates. Through this, the state minister will analyse his own success and failure.

Besides, he said the Bangladesh Securities and Exchange Commission will give permission to start the commodity exchange by next June. He hopes that once this exchange is launched under the leadership of the commerce ministry, a proper idea of the quality and price of the products will be obtained.

Meanwhile, Bangladesh Bank Governor Abdur Rouf Talukder mentioned the existing high inflation as a major problem in the monetary sector in a meeting with the finance minister, a meeting source told The Business Standard.

"The finance ministry and the Bangladesh Bank are working to control the economic side of inflation. The non-economic side of high inflation has become much more problematic. The non-economic side players, including the commerce ministry, should be active. Because the non-economic side has become more of a problem, becoming the main cause of inflation," the source quoted the governor as saying.

On the non-economic side, the governor meant market manipulation. He emphasised increasing the activity of the related ministries and departments of the government, including the commerce ministry, to stop this manipulation.

"If inflation increases once, it will decrease, but slowly. Hopefully, it will decrease. We will take the necessary steps until the rate of inflation reaches 6% on a point-to-point basis," the governor told Abul Hassan Mahmood Ali.