A meeting between Prime Minister Narendra Modi and Bangladesh Prime Minister Sheikh Hasina was held recently in New Delhi. Both leaders decided to commence the negotiations on a Bilateral Comprehensive Economic Partnership Agreement (CEPA). The leaders believe that by taking lessons from the COVID pandemic and recent developments in the global order, the economies of each country need to accumulate strength.
A Comprehensive Understanding of CEPA
Talks on CEPA began formally in 2018. The proposed CEPA agreement between India and Bangladesh has three dimensions that incorporate trade in goods, trade in services, and investment. The proposed agreement aims to minimize the huge gap that exists between India and Bangladesh and manifests in new economic potentialities including new markets, connectivity, cooperation, and partnership. Moreover, CEPA is planning to settle the issues and challenges of anti-dumping duties and rules of origin with the help of the perspective of multi-nodal connectivity and is intensifying cooperation in the backdrop of sub-regional cooperation.
Based on an official statement released by the Ministry of External Affairs of India, CEPA would integrate multiple issues of mutual interest, including the expansion of railway infrastructure, port infrastructure, border haats (trading ports), connectivity at the regional level through multi-modal transportation, harmonization standards, and mutual recognition agreements. Furthermore, the agreement aims to cooperate in the sectors of green technologies, IT, renewables, and digital platforms. It also aims to strengthen the scope of investment as it incorporates new areas and various ways of collaboration. This cooperation would lead to a significant boost in trade for both nations. Moreover, the agreement aims to strengthen the India-Bangladesh partnership in four areas, including connectivity and maintaining an uninterrupted supply chain; exploration of potential areas of investment; joint production of defense equipment, and collaborative manufacture of vaccines and other medicines.
The agreement would lead to the creation of new venues for partnership and cooperation and have accessable opportunities for the creation of joint production hubs and consecutive supply chains. Special economic zones are already being set up by Bangladesh for Indian investors, and Indian companies have started their investments in various sectors, including telecommunications, pharmaceuticals, automobile manufacturing, and consumer goods in Bangladesh.
Beneficiary Effects of CEPA
CEPA has great potential for prospects. First, under this circumstance of growing partnership in trade between India and Bangladesh, incorporating import, export, and related issues of rules and regulations will lead towards a new momentum, as this joint venture has instruments to work collaboratively on trade, production, and supply chains. After India withdraws from the Regional Comprehensive Economic Partnership (RCEP), it is trying to settle for FTAs with its neighboring countries. Second, CEPA will ameliorate the bilateral and sub-regional connectivity, which Bangladesh has championed in its policy initiatives. A cluster of connectivity will be produced by CEPA, shaping the future trade via the Asian Highway Network Routes (AH-1 and 2), Bangladesh, India, China, and Myanmar economic corridors; the Bangladesh, India, Nepal, and Bhutan Initiatives; and BIMSTEC (the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation).