A large number of Indian firms have queued up with investment proposals worth millions of dollar, taking advantage of zero-duty exports facility offered by India for goods produced in the least developed country.
The Indian companies both from private and public companies showed interest in the sectors include power, transmission lines, telecom, textiles, chemicals and pharmaceutical, glass, plastics and engineering.
The investment facilities and current political scenario to the potential investors have encouraged Indian entrepreneurs to put funds on many key areas, according to officials and business people.
A number of direct and joint venture proposals from India constituting more than $100m worth of investment in the major sectors including agro-based chemical industries, engineering and service sector which in turn will create 51,653 jobs in Bangladesh, according to the Board of Investment.
“A number of Indian companies have evinced interest to do business in Bangladesh, while some others are in the process of partnering with Bangladeshi firms,” Matlub Ahmad, President, India-Bangladesh Chamber of Commerce and Industry (IBCCI), told the Dhaka Tribune.
He said, “Indian investment in Bangladesh currently stands at $2.5bn. However, we expect this to grow two-fold and touch $5bn in the next three years.”
According to the country’s foreign investment policy, a company can export 80% of its total produces.
“This combined with cheap labour cost have attracted many Indian entrepreneurs to do business here,” said Matlub.
Indian investment in Bangladesh, with the possibilities of re-export to India, would help in diversifying the exports of Bangladesh and thereby reduce the trade gap between India and Bangladesh, he said.
The total import by Bangladesh from India in six months of the fiscal year 2012-13 was $2316m while total export by Bangladesh to India was $267m, making trade gap of $2049m, according to the Federation of Bangladesh Chamber of Commerce and Industry.
Eight MoUs worth $75m were recently signed between Indian firms and Bangladesh companies in Chennai, according to Matlub.
MoU worth an initial sum of $5m was signed for joint partnership between ARD Group and Nittol Center for three wheelers, one worth $20m was signed between Arma Group of companies and UBE industries for Infrastructure, $12.5m was signed between Euro India Cylinders Limited and Dhaka Cotton Company for the Manufacturing Industry.
Similarly $2.5m was signed between Nittol plastic Industries and Container seals and Industries for the Plastic Industry, $5m was signed between Good Lift tyre and FAS Finance and Investment Limited for tyre, $30m was signed between Arvind Limited with Nittol Motors Limited for the textile sector.
Param Projects signed an MoU with Aamra Technologies Limited for global outreach in the market for e-commerce as an expression of Interest and Novel Soft Pvt Ltd signed an MoU with Aamra Technologies for Software Development.
Bangladesh exports goods including raw jute, jute goods, frozen food, agri-products, woven garments, knitwear, leather and chemical products and imports goods including automobile, textiles and textile articles, products of the chemical or allied industries, machinery and mechanical appliances and etc.