India export of Coal, MS Ingot, MS Billet, Pig Iron and Sponge Iron to Bangladesh may get affected if SAFTA agreement doesn’t continue.
Economics has played a significant role in the bilateral relations between India and Bangladesh. As SAFTA agreement expires between SAARC nations on 31st Dec’16. Member States of SAARC are India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan, Afghanistan and the Maldives.
Presently there is no renewal heard till now as the 19th SAARC Summit talk this year couldn’t happened yet. “It will largely affect the export of many industrial products including products like sponge ore, MS ingot, and pig iron” stated an exporter located in Kolkata.
SAFTA came into effect on 1 January 2006, with the aim of reducing tariffs for intraregional trade among the seven SAARC members. As per present agreement there is no duty on coal, MS Ingot, Pig Iron and Sponge Iron. However MS billet attracts a duty of USD 150/MT.
Indian DRI, MS Ingot and Pig iron is exported to Bangladesh. India DRI export increased around 87% in Nov’16 and Bangladesh’s share is near to 100% in Indian DRI exports that is around 1,65,000 MT from April’16 till date. Similarly MS Ingot export to Bangladesh from April’16 till date is 72,920 MT.
Indian billet exports decreased from june’16 as Bangladesh Importers prefers to import MS ingots due to nil duty as against billet at USD 150/MT. MS Billet export from April’16 till date is 3,70,950 MT.
“If SAFTA agreement expire the export of MS Ingot and sponge will be limited that will indirectly affect steel prices in east India” said another exporter based in Kolkata. He added presently there is logistic congestion in Benepole port for 5-7 days as duty will expires on 31st Dec’16. “
India exported coal to Bangladesh just the beginning of this month with Adani Enterprises initiated its first shipment for Dec’16 delivery at Chittagong port.
The economic relations between the two countries have been multifaceted, embracing trade transactions, credit arrangements, joint ventures, transit facilities and transport development.
This is mainly because of the operation of objective factors like geographical proximity, common language, similarity of consumption pattern, common development needs and experience, and commonality of the inherited infrastructure.
India Steel Commodity Export to Bangladesh in FY17* till date:
|
Particulars/Months |
MS Ingot |
MS Billet |
Sponge Iron (DRI) |
Pig iron |
Coal |
|
April’16 |
– |
20,890 |
14,760 |
|
|
|
May’16 |
– |
131,130 |
16,790 |
3,200 |
|
|
June’16 |
– |
19,910 |
26,300 |
|
|
|
July’16 |
1,050 |
73,650 |
33,550 |
|
|
|
August’16 |
17,260 |
52,380 |
15,360 |
20,000 |
|
|
September’16 |
13,830 |
54,380 |
10,480 |
33,750 |
|
|
October’16 |
16,550 |
17,850 |
14,400 |
17,900 |
|
|
November’16 |
24,230 |
760 |
27,340 |
|
|
|
December’16 |
– |
|
|
|
28,950 |
|
Total |
72,920 |
370,950 |
158,980 |
74,850 |
28,950 |
Source: SteelMint Research, Custom data
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