Bangladesh-India informal trade estimated at $11b: NBR official

Despite the growth in formal trade between Bangladesh and India, a substantial volume of informal trade persists, estimated at $11 billion, according to a senior official from the National Board of Revenue (NBR).

"Are you aware of the scale of informal trade between Bangladesh and India? It is estimated at around $11 billion," said Hossain Ahmed, a member of the NBR's customs policy wing, during a discussion organised by the American Chamber of Commerce in Bangladesh (AmCham) at a city hotel on Tuesday. 

He termed the large informal trade a serious concern, stating that it presents a significant challenge for the NBR, particularly in terms of revenue collection.

In the 2022-23 fiscal year, trade between Bangladesh and India amounted to around $16 billion, making it the second-largest trading partnership for Bangladesh. Of this total, Bangladesh imported around $14 billion from India, while its exports to India were only $2 billion.

Bangladesh derives a large share of its import duty revenue from Indian goods. However, informal trade prevents the government from collecting import taxes on these goods.

The NBR official refrained from sharing additional details on the matter.

After the event, The Business Standard asked Hossain Ahmed about the basis for this informal trade estimate. He said that it was an estimate derived from a study.

"I obtained this information at a recent World Customs Organization (WCO) meeting in New Zealand," he said.

Providing examples, Hossain said, "Do you know the quantity of sugar crossing the border? Other products, including textiles, also enter informally."

During the discussion, titled "IPR Protection & Practices: Driving Economic Growth in Bangladesh," both local and international investors underscored the importance of Intellectual Property Rights (IPR).

Calling for proactive preparation, they emphasised that as Bangladesh prepares to graduate from Least Developed Country (LDC) status in 2026, adhering to Intellectual Property Rights (IPR) standards will become increasingly critical for international business and attracting Foreign Direct Investment (FDI).

However, foreign investors highlighted the bureaucratic hurdles in obtaining patents and trademarks in Bangladesh.

Niraj Kumar, managing director of Colgate-Palmolive ACI Bangladesh Pvt Ltd, shared his experience, saying, "We haven't been able to secure a trademark licence in Bangladesh in the past year."

After the event, he told TBS, "Compared to other Asian countries, it takes about 30% more time to obtain a trademark licence in Bangladesh. While the laws are in place, the real issue is in their implementation."

Barrister Hamidul Misbah, the founder of the Bangladesh IP Forum, said that more than 100 intellectual property rights applications are pending approval at customs offices nationwide.

Speakers at the event pointed out that the country's current IPR laws fall short of international standards and that a more robust IPR system is essential for positioning Bangladesh as an appealing destination for global business and fostering sustainable economic growth.

Syed Ershad Ahmed, president of AmCham, and Zaved Akhter, president of the Foreign Investors Chamber of Commerce and Industry (FICCI), participated in the discussion, among others.