Bangladesh trade gap with India-China rises 57 pct

Bangladesh's trade deficit with neighbouring India and China rose 57 percent
to $4.35 billion in July-April of 2007/08 financial year from the same
period of previous year, a central bank official said on Sunday.

Economists and business leaders said impoverished Bangladesh should try to
penetrate markets in those two countries more to narrow the yawning trade
gap.

"They are also very big importers in international markets and we must try
to access them by diversifying and improving the quality of our exportable
products," said Mustafizur Rahman, executive director of the Centre for
Policy Dialogue, a private thinktank.

He said the import bill from those countries had risen sharply in recent
years because of both rising prices and growing volumes.

"Earlier Bangladesh used to import machinery and industrial raw materials
mainly from Japan, the USA, European countries and South Korea, and now
those are being imported principally from India and China for the cheaper
prices," he told Reuters.

As a least developed country Bangladesh enjoys duty-free market access in
India, Pakistan, Japan, Thailand, Korea and European countries for a number
of products.

"Though there is a huge trade gap with India and China, we are also enjoying
a healthy and comfortable trade surplus with the USA and European countries
by using raw materials imported from our giant neighbours," Mustafizur said.

Bangladesh enjoys a $2.4 billion annual trade surplus with the U.S., while
annual export earnings from Europe are more than $5 billion, with a
"handsome" surplus in favour of Bangladesh, he said.

Bangladesh mainly imports cotton, machinery, mechanical appliances, fabrics,
fertiliser, vehicles and organic chemicals from China.

China imports jute and jute goods, leather, frozen foods and chemicals from
Bangladesh.