Informal Trade in Agriculture Items between India and Bangladesh

Objective:With over US$18 billion volume of India-Bangladesh trade in 2021-22, Bangladesh is India’s largest trade partner in South Asia and India is the second largest trade partner of Bangladesh after China. Bangladesh is also one of the largest markets for India’s agriculture exports. At the same time a large part of the bilateral trade also takes place through informal channels between the two countries. In this context the objectives of the study are to: identify agricultural items being traded informally between India and Bangladesh; explore and identify items in missing trade and identify reasons for prevalence of such trade; examine the bottlenecks and impediments created by domestic policies, regulatory regimes, trade policies and transport policies and protocols; and suggest policy enabling measures to facilitate the shift of informal trade to formal channels.
Scope and Deliverables: 1 Report
The study will gather both quantitative and qualitative information on formal and informal trade in agriculture items between India and Bangladesh since a large part of the cross-border informal trade takes place because of problems and impediments in the formal channel. With regard to informal trade the focus will be on products traded, value, and pattern, functioning of informal markets and networks, information flows about commodities and demand, risk mitigating mechanisms adopted by traders and the reasons why traders prefer the informal route. To identify the impediments and bottlenecks in trading through the formal channel, a detailed analysis will be carried out for 4 to 5 agricultural items which are traded informally but are also traded through the formal channel. A supply chain analysis for each of these products will be carried out whereby the interface of each product with each of the participants/agencies in the supply chain will be examined.
Activities: The following activities are being undertaken under the project:
• Survey in 7 locations
• 5 stakeholders’ consultations