Nepal’s trade with Bangladesh, plan to ink power purchasing deal affected

Kathmandu, Aug. 7

The latest political turmoil in Bangladesh has affected Nepal's trade with the country that was the 16^th largest export market of Nepali goods in the last Fiscal Year 2023/24.

About two dozen of trucks and containers carrying Nepali goods to Bangladesh have been stuck at Kakandbhitta (Nepal-India border) and Banglabandh (India-Bangladesh border). Traders are uncertain about the normalcy that they expect to happen only after the new interim government starts to work in Dhaka.

The student protests against the quota system to the families of the war veterans and martyrs of the War of Liberation in 1971 in government jobs culminated in the toppling of the government led by Sheikh Hasina.

Hasina, the daughter of the leader of the liberation movement, Sheikh Mujibur Rehman, fled the country on Monday.

Although the size of Nepal's trade with Bangladesh is of small size, there are fewer risks in the bilateral trade between the two neighbours.

Shiva Agrawal, entrepreneur and President of Nepal-Myanmar Chamber of Commerce and Industry, said that the problem would not be significant, although the traders would face some loss if the crisis did not prolong. "However, it depends on how the new government handles the internal crisis," he said.

Last year, Nepal exported goods worth Rs. 554.6 million to Bangladesh and imported goods worth Rs. 4.22 billion incurring a trade deficit of Rs. 3.67 billion, according to the statistics of the Department of Customs (DoC). Bangladesh was the 25^th largest import source market for Nepal in FY 2023/24.

A year before in FY 2022/23, Nepal imported goods worth Rs. 6.04 billion from Bangladesh and imported merchandise of Rs. 574 million. The trade deficit of that was Rs. 5.47 billion.

Nepal imports raw jute, lead acid, oil cake, toilet paper, juice, food supplements, yarn, chocolate, lubricating oil, sun caps and other textiles from Bangladesh. Likewise, major exports to Bangladesh are lentils, vaccines, wigs, ginger, juice, contact lenses and handicraft items.

Although traders are apprehensive about the ongoing situation in Bangladesh, they have not sought any help from the government.

Spokesperson for the Ministry of Industry, Commerce and Supplies (MoICS), Chandi Prasad Ghimire, said that this was not a crisis like the Russia-Ukraine War, the crisis in Bangladesh was temporary.

"However, the ministry is concerned about the trade obstruction and will put its efforts in facilitating the exporters," he said.

Since the Minister of Industry, Damodar Bhandari and the Division Chief of bilateral and multilateral chief are in New Delhi, India, to attend the BIMSTEC Summit, the MoICS said that it would take further steps after their return.  

Meanwhile, Nepal's energy dialogue with Bangladesh has also been affected. The two countries were making preparations to sign the electricity trading agreement this week, and Bangladesh's minister for state for energy was scheduled to come to Nepal, according to the Ministry of Energy, Water Resources and Irrigation of Nepal. Bangladesh is buying about 40 MW of electricity from Nepal in the first phase.

Likewise, the crisis in Bangladesh has seriously impacted Nepali students pursuing higher studies in various universities in Bangladesh. Of more than 3,000 Nepali students studying in Bangladesh, about 800 have returned to Nepal while others have requested the government here to facilitate their return.

Meanwhile, the Ministry of Foreign Affairs (MoFA) has said that Nepali students in Bangladesh are safe and the Embassy of Nepal in Dhaka is putting its efforts into addressing their grievances.

 

MoFA calls for calm and restraint

Likewise, the MoFA said in a statement on Wednesday that the Government of Nepal is closely following the recent political developments in Bangladesh.

Expressing deep concern about the loss of lives and properties during the protests over the last few weeks in Bangladesh, the government conveyed its sincere condolences and sympathies to the families of those who lost their lives and wished for speedy and full recovery of the injured.

"We call for calm and restraint by all and stress the importance of an orderly return to the democratic process. We are confident that the strong and resilient people of Bangladesh will be able to ensure a smooth transition towards peace and stability," the statement reads. 

Published in The Rising Nepal daily on 8 August 2024.