How sea trade between Pakistan and Bangladesh was restored
Muhammad Zubair Khan
Office, Journalist
November 17, 2024
Pros:
1. Cost Reduction
Eliminates the need for transshipment through countries like Sri Lanka or Singapore, cutting transportation costs significantly.
2. Time Efficiency
Direct routes reduce transit times, benefiting businesses on both sides.
3. Economic Growth
Strengthens bilateral trade relations, boosting exports in textiles, agricultural products, and consumer goods.
4. Maritime Development
Revitalizes port activities in Karachi, Chittagong, and other terminals, creating jobs.
5. Cultural Ties
Encourages people-to-people connections, fostering goodwill.
Cons:
1. Trade Imbalance
Concerns about one-sided benefits due to differences in export capacities.
2. Political Sensitivities
Historical tensions may affect perceptions of the agreement.
3. Logistical Challenges
Limited port infrastructure or shipping line readiness might initially hinder smooth operations.
4. Competition for Local Producers
Influx of foreign goods could challenge domestic industries.
5. Environmental Impact
Increased maritime traffic could lead to ecological concerns.
A Pakistani cargo ship has reached Bangladesh for the first time in decades, and the development is being seen as important for trade relations between the two countries.
The 2,300 TAU cargo ship from Karachi arrived at the Chittagong port on Wednesday, with the Pakistan High Commission in Bangladesh saying that the new corridor would be effective for the supply chain, save time and “create new business opportunities for both countries.”
Since the 1971 war and the formation of Bangladesh, its relations with Pakistan have been volatile.
A wave of coldness was seen during the tenure of former Bangladeshi Prime Minister Sheikh Hasina Wajid, but after her government fell this year, Bangladesh is currently under the control of the interim government headed by the head of the government, Muhammad Yunus.
A statement from a meeting between Dr. Muhammad Yunus, the chief advisor to the Bangladesh interim government, and Pakistani Prime Minister Shehbaz Sharif during a UN meeting in September said that “Bangladesh and Pakistan reiterated the need to strengthen mutual cooperation at various levels.”
According to the Pakistani embassy in Bangladesh, direct maritime trade links between the two countries have been restored after nearly 20 years.
‘Our goods reached Bangladesh from Pakistan in 10 days with this cargo’
Sima Samu, the chief executive of Soumya Fashion World in Dhaka, is involved in the import-export business. Like other countries, she has contacts with Pakistan.
She says that she exports textile fibers, garments and other items to Pakistan, while she imports women’s clothes, jewelry, and various types of cosmetics from Pakistan to Bangladesh.
She said that ‘I have made business trips to Pakistan many times and business people from Pakistan also come to Dhaka. Some items from both countries are essential for each other and they are in great demand in Pakistan and Bangladesh. Pakistani fashion industry products are quite popular in Bangladesh.’
Sima Samu said that ‘There was no direct cargo between the two countries. This was a big problem in trade between the two countries. The cost of the goods that were ordered or the goods that were sent varied considerably, the prices would increase, while the other major problem was time.
"It took 20 to 25 days to send from Bangladesh to Pakistan and the same amount of time to order from Pakistan."
He said, "Sometimes it would happen that the goods could not reach on time, as happened to me on the occasion of Eid when the goods ordered from Pakistan could not reach."
Seema Samu said, “Now our goods have reached Pakistan in ten days with this cargo, which has also reduced the travel cost. The price of goods has come down and people will be able to get cheap goods. In addition, after the port issues, it will reach the market in a few days.”
She said that now if maritime connections are restored like this, she will order more goods from Pakistan. “I have also told my business friends from Pakistan that they will also order more goods from me now.”
She says, “I hope that trade between the two countries will increase and new opportunities will be available on both sides that will benefit both countries.”
Former president of the Karachi Chamber of Conference, Majeed Aziz, says, “With the start of direct trade between Karachi and Chittagong, a corridor has now opened that will benefit both countries innumerable ways.”
Majeed Aziz already has business and social contacts with Bangladesh. He says that ‘actually, after the fall of the Hasina Wajid government, Indian influence in Bangladesh has decreased, due to which relations between Pakistan and Bangladesh are now returning to some normality.’
Syed Naveed Shah, a businessman associated with the garment business in Bangladesh, said that ‘Bangladesh needs many goods from Pakistan... These goods used to come through other routes.’
‘Due to the lack of direct cargo, it took time for goods to reach Pakistan, which was causing losses to traders of both countries. Now, cargo reaches Chittagong from Karachi in a maximum of 10 days.’
How was maritime connectivity restored between Pakistan and Bangladesh after decades?
Trade between Pakistan and Bangladesh is ongoing, but experts say there is considerable scope for improvement in its volume.
According to official Pakistani data, imports from Bangladesh to Pakistan increased by about 1.8% from 2017 to 2022. Exports from Bangladesh to Pakistan were $67.7 million in 2017, while in 2022 it had increased to $74 million.
On the other hand, Pakistani exports to Bangladesh have increased by five percent annually. Pakistan’s exports in 2022 were $838.67 million.
However, if we look at the exports in 2017, they were $646 million.
Bangladesh exports various types of textile fibers and garments to Pakistan, while Pakistan exports pure cotton, construction materials, textiles, various types of chemicals, vegetables, fruits, rice, agricultural commodities and other goods.
In 2023, 17,000 containers arrived in Bangladesh from Pakistan, while 16,000 containers had left by July 31 this year.
But this import and export between Pakistan and Bangladesh was not taking place directly, but via Sri Lanka or Dubai. Air links between the two countries have also been cut off since 2018.
According to Bangladeshi media, former Prime Minister Sheikh Hasina Wajid had imposed various restrictions on trade between Pakistan and Bangladesh since 2009 and had included some products in the ‘red list’.
Due to the ‘red list’ label on Pakistani products, Pakistani products were subjected to special checks. Sometimes, goods going directly from Pakistan took several days to clear. This was reducing the export of Pakistani products to Bangladesh.
Officials of the Pakistani embassy in Bangladesh say that after the government of former Prime Minister Sheikh Hasina left, traders from both countries had started trying to somehow get Bangladesh to remove the ‘red list’ label from Pakistani products and they succeeded in this in September this year.
According to the embassy, when the Bangladesh government issued a notice to remove the ‘red list’ label from Pakistani products, traders from both countries saw that there were many opportunities.
Embassy officials say that in view of this favorable environment for trade, a “private company has started a service from Karachi to Chittagong to take advantage of this opportunity.”
According to the embassy, this is actually a success for traders and will now improve further with time.
How important is this development for Pakistan and Bangladesh?
Rafi-uz-Zaman Siddiqui, Pakistan’s former ambassador to Bangladesh, said that the change in relations between Bangladesh and Pakistan at that time was “dramatic.”
He said, “I have also seen the period when I was serving as the High Commissioner in Bangladesh and there was Sheikh Hasina’s government in Bangladesh and there were very limited contacts with Pakistan.”
“Even for normal diplomacy, there were few contacts with people in the Bangladesh government.”
He said, “Pakistan was facing a lot of problems with Bangladesh during that period. Indian influence in Bangladesh was quite high. Apparently, it seemed that the Indian government had a lot of influence on Sheikh Hasina.”
Rafi-uz-Zaman Siddiqui said, “The matter was not limited to Pakistan alone. As far as I know, Sheikh Hasina had made some agreements with India during her tenure which were not directly in the interest of China.’
Former Pakistani Ambassador to China Naghmana Alamgir Hashmi said, ‘China cannot reach any country directly. They do diplomacy through trade and business. That is their biggest interest.’
She said, ‘China has interests in this region, especially Bangladesh. For a long time, America has been a close ally of India in this region, while India's influence on Bangladesh was not hidden from anyone until some time ago.
He said that 'America has been warming up in this region through India, which was against China's interests.'
According to Naghmana Alamgir Hashmi, 'Now even in the new government, China is not directly interfering, but now it is able to protect its economic and trade interests in the region more easily.'
At a time when Bangladesh is also reorganizing its foreign policy, it is also 'taking advantage of it if it gets some options other than India.'
However, Rafi-uz-Zaman Siddiqui said that 'the initial contacts between Pakistan and Bangladesh have just begun. This is an important stage. Both Islamabad and Dhaka should establish better relations and contacts. For this, sports, exchange of artists, and youth contacts can play an important role.
He further said that “there should be no bitterness in these contacts... interference in each other’s internal affairs should be avoided.”
Related Topics
#Bangladesh #Business_and_Management #Pakistan #Trade #Business
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