Bangladesh should focus on expanding its regional trade, particularly with the SAARC member countries, in its efforts to recover from the recent turmoil that ousted the country’s longest ruling prime minister Sheikh Hasina, said SAARC Chamber of Commerce and Industry (SCCI) President Md Jashim Uddin.

He said the South Asian Association for Regional Cooperation (SAARC) member nations are one of the largest population regions in the world.

“We have a huge chance to exploit the regional trade opportunities,” the SCCI president told the Daily Sun in an exclusive interview.

He said, “Regional integration is now very important as Bangladesh will graduate from the Least Developed Countries (LDC) status in 2026. The country needs to sign trade agreements with different countries to expand its exports volume.”

However, he emphasised that Bangladesh should proceed carefully while signing the Free Trade Agreement (FTA) with China as Bangladesh has very fewer product lines than the world’s second largest economy.

Jashim Uddin, also the former president of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), sees opportunities in a tri-party agreement between Bangladesh, Nepal and India.

“For example, Bangladesh can give transit to India if we can use Indian land to import electricity from Nepal. Nepal has huge potential for hydroelectricity which is the cheapest. This is also green and clean electricity,” he explained.

“Bangladesh can also strengthen the relations with China and India through alternative ways without signing the FTA,” Jashim Uddin, also vice chairman of Bengal Group, added.

What type of agreements Bangladesh should sign with other countries?

Bangladesh should protect local industries and maintain reservations in selecting countries for signing FTA.

But, we must strengthen relations with our regional countries, particularly SAARC members. We have to select the countries for exports and imports. We have to think about cost and returns.

Vietnam signed FTAs with 17 countries. The country exports around US$300-$350 billion per annum. Of this, Vietnam exports 50% of its products to countries it signed FTA with.

So, Bangladesh should think about it. Here, our ministries and individuals need good negotiation skills.

If we look at regional trade, the European Union region does 60% of their trade within their own region, the North American Free Trade Agreement (NAFTA) does 46%, ASEAN does 24%. But the SAARC region comprises only 5-6% of their business.

To take the regional trade opportunities, we need to concentrate on using regional infrastructure to reduce export costs.

And, we must ensure the specific sourcing countries. We need to set a target to import the fixed products like sugar, oil, soybean, and cotton. Our government agencies and ministries should be specialised in this.

Why SAARC member countries cannot take proper regional trade opportunities? What are the challenges here? 

There is no official trade between India and Pakistan. Despite a good trade relation between Bangladesh and India, India imposes anti-dumping measures. If Bangladeshi businessmen export more there like jute and jute goods. India should not impose these measures.

Bangladesh imports $14-$15 billion from India where we export only $2 billion. We can report this matter to the WTO (World Trade Organization). We can file a case against India to the WTO for imposing anti-dumping.

During export to India, Bangladesh exporters face many problems. As the sea port is not visible to India, we should use land during export. But infrastructure is not good in India. This is a problem. Infrastructure should be developed in India too for smooth transportation.

Bangladesh must think about a win-win situation before signing any agreement. Talks between politicians are needed. We need government-to-government talks. Negotiation skills must be improved here. Otherwise, we will lag behind.

What is your observation on agreements with China and other SAARC member countries?

It is very difficult for Bangladesh to take trade opportunities for us if we sign an FTA with China as we are the largest importer of China.

After signing the FTA, generally both countries will get access to markets but we do not have enough products to export in China.

On the other hand, China has thousands of items which can be exported to Bangladesh. They will flood our market. So, Bangladesh must go ahead carefully to sign any agreement with China and India.

As per the previous agreement, India will use our deep sea port. If India uses our port, the country must give the chance to use its land for Bangladesh to import the electricity from Nepal.

We must develop our import substitutes to reduce import dependency. Now we import many products which we can manufacture in our country. So, our government should give financial, policy and infrastructural support.

As a president of the SAARC Chamber, what do you do to revive its activities?

The negative relation between India and Pakistan caused some problems in the Chamber’s activities. We try to revive our activities. We recently visited Nepal to attend its business summit, and Sri Lanka for the SAARC Trade Fair. We also try to arrange the SAARC Summit in December in Bangladesh.

Business Research is crucial for export diversification. Why Bangladesh lags behind here?

We have built FBCCI Research and Innovation Centre just seven/eight months ago aiming to focus on sector-based research. We will work on both local and foreign market research. We want to help the government to increase revenues as the tax to GDP ratio is very low here.

We need export diversification but practically it is not done. All exportable sectors should be given the facilities which got the RMG (readymade garment) at an early stage. There are many small sectors that need bonded facilities to go into the export market. So, we need a central bond system.

We have potential in 10 sectors like leather and leather goods, plastic, food and agriculture, ceramic, light engineering, electrical and electronics items. Easily, we can export those if the government gives policy support.

Our research centre has been built to support the sectors. We have already started to work on four sectors such as light engineering, plastic and recycling, circular economy, and electronic and electrical goods. We will go to other sectors in phases.

Now, we should focus on reducing the cost of doing business, and supply energy at reasonable prices. We have a chance to grab the relocation of the Chinese trade as the EU and USA tried to avoid China.

How can local industries be strengthened to overcome current and the challenges after LDC?

Bangladesh will lose many opportunities after LDC graduation. It is a challenge and opportunity as well. Now we export products after importing raw materials. Then, we will have to export after manufacturing the materials in the country to reap proper benefits of the LDC graduation.

Local industries will get opportunity for investments after LDC graduation as it will create a big scope of foreign direct investment (FDI).

So, we should sign an FTA with the selected countries. And we also should select the mechanism to protect local industries.

We need to select some mechanism like a non-tariff barrier. For example, India has an anti-dumping mechanism. The country imposes anti-dumping if someone imports more. The WTO accepts the mechanism too. Now, it is high time to work on capacity building of our commerce and other ministries as well as business associations to apply such mechanisms. Otherwise, we will face big challenges in future.

Why Bangladesh cannot attract more FDIs?

Bangladesh is a good target country for business relocation in the globe but we don’t get FDI due to lack of policy stability. We have many challenges including gas, electricity, bank finance, and business confidence.

We have many economic zones (EZs). But the EZs did not live yet. Land cost is much higher there. Incoherent policy hinders building “new industries”.

In the national budget for FY 2025, 1% duty was imposed on parts imports in the Export Processing Zone. It will discourage FDI and lose our image. Every country gives duty free opportunity, and even gives incentives too in many countries to attract FDI.

What are your recommendations to overcome our current economic challenges?

Now our big challenges are in the banking and energy sectors. High bank interest rates increase loan defaults. The problems in the financial sectors should be resolved soon.

Businessmen are facing tough challenges due to lack of gas, electricity and the dollar crisis. We need policy stability to attract more FDIs.

And we need to work on technology to tackle the 4IR (fourth industrial revolution) impact. Besides, the country’s education curriculum should be reformed as per the industry’s demand.