Professor Sunanda Sen, for the first time, dealt with this aspect in an essay "India-Bangladesh Trade" : Problems and Prospects" published in the Economic and Political Weekly, of April 8, 1972, in which she discussed in detail the problems and possibilities of establishing economic relations between India and Bangladesh. The problems highlighted by Professor Sen twenty-seven years ago are yet to be solved, on the contrary some more areas of darkness have cropped up resulting in the development of socio-economic problems. Professor Sen concluded her dissertation suggesting in-depth empirical studies of the demand and the comparative cost patterns of the two countries for a firm prediction of the future trade developments between India and Bangladesh. This study has not been undertaken even after the lapse of twenty-seven years.

In a research project entitled "Economic Cooperation in the SAARC region" published in 1990, by the "Research and Information System" for the Non-Aliged and Other Developing countries (RIS)", Delhi, an analysis was done on the Indo-Bangladesh economic relations for the period 1980-1987. Two pertinent points may be mentioned here.

1. The volume of trade of a particular SAARC country with other SAARC countries during the period under investigation is nominal compared to the total trade of that particular SAARC country.
2. It has been revealed that, during the period 1980-87, trade complementarity i.e., export supply and import demand correspondence between pairs of countries seemed to be not quite favourable. However, when export supplies and import demands are pooled regionally, a high degree of complementarity is obtained between region’s demand and supply. This points to the need for cooperative strategy to allocate regional production capabilities to meet the requirements of both he regional and extra-regional markets.

India, has no long term policy on the issue of economic relations with Bangladesh, though on an emergency basis some short-term arrangements have been made. The total aid provided by India to Bangladesh after the liberation war in the form of grant was 25 crores of rupees on account of articles, and in the form of loan was 10 crores of rupees and five million pound. After this period India offered loan purely on business terms. Since the terms of loan provided by other countries were more liberal than that of India, Bangladesh preferred loan from other countries. Consequently, Bangladesh did not seek any (long term) loan from India after 1975. Very recently (June 1999), Indian Prime Minister declared in a press conference in Dhaka that India would provide loan to the tune of Rs. 200 crores during the coming three years, in the shape of transport parts, equipment and improving the infrastructural facilities. It is hoped that this loan will be released soon without the shackles of bureaucratic interference and needless technical formations. There exists at present a trade pact between India and Bangladesh, with the provision of review at regulated intervals. There is a Joint Committee at the ministerial level and four subcommittees under it to monitor trade, services, technology and agriculture. Over and above there are arrangements on economic cooperation and understanding. Strangely enough, none of these committees is found to be active, for example, the joint economic committee formed after the advent of the Independent and sovereign Bangladesh became gradually dormant. A new joint committee on economic cooperation was formed in 1982, which met for the first time in 1986 and thereafter in 1990. The third meeting was held in 1993. Thus the functioning of this newly formed committee is no better than the old one. During this period the only fruitful agreement between the two countries is the Ganga Water Sharing Treaty of 1996 which has created an atmosphere of cooperation.

The trade Profile between Bangladesh and India (1973-1997)

Bangladesh's Import from India

During 1973-97 the quantum of import from India of Bangladesh has increased manifold. A new dimension has been reached in the rate of growth since 19992-93. The total import of Bangladesh from India during 1973-74 was 479 million Taka, in 1990-91 it was 7,199 million Taka. In 1991-92 the import from India was a bit less but in 1992-93 it exceeded 10 thousand million Taka (to be precise it was 10,140). In 1996-97 it rose to 57,079 million Taka. India tops the list of exporters to Bangladesh. India's share in the total import of Bangladesh was 6.09% in 1973-74 and it rose to 19.6% in 1996-97. India has a wide market for the goods in Bangladesh. There is still scope for further widening of market, but the Indian business community paid little attention to this big market, their main thrust has been the market of developed countries. They consider Bangladesh market as an item of perquisite. The business community of Bangladesh complains of inadequate response at the time of need and secondly of inferior quality of Indian goods. There may be some exaggeration in their complaints but this kind of attitude is certainly an impediment to expand the trade relationship.

Bangladesh's Export to India

The import to India from Bangladesh is nominal. The total import from Bangladesh in 1973-74 was 75.1 million Taka. After a crest and fall the import in 1994-95 was 1085 million Taka. During the span of 22 years, between 1973-74 and 1994-95, India's share of import was less than 1% for as many as 16 years. During the rest six years it rose upto 3%, (it exceeded 3% in the year of 1984-85 only). Total export from Bangladesh during this period, however, enhanced considerably. In 1973-74 the total export from Bangladesh was 2.983 million Taka. In 1994-95 this reached a figure of 136.970 million Taka, a rise of nearly 4491.69%.

Consequently, the trade gap between India and Bangladesh was staggering. In 1973-74 the gap was 400.9 million Taka, which increased to 23.632 million Taka in 1994-95. In this span of 22 years the rate of increase of Bangladesh's trade gap with India was 5794.74%. Compared to the total trade gap of Bangladesh India's share was 8.21% in 1973-74 and 32.7% and 28.96% in 1993-94 and 1994-95 respectively.

For a developing country the ever-increasing trade gap is not a dangerous trend though. The target of a developing country should be to strengthen economic development by increasing import from comparatively cheap sources. The trend of economic development and its weak areas of Bangladesh is, however, a matter of in-depth study primarily by its government and people. The ever-increasing trade gap with India may become a source of psychological apathy towards India which is likely to create a hurdle to the establishment of a sound economic cooperation between the countries. This is our primary concern.