The Rail Board has approved a proposal allowing Container Corporation (CONCOR) to run container trains to the Bangladeshi capital of Dhaka. This is part of a bilateral initiative to reduce logistics cost which is hindering trade growth. Bangladesh is ninth-largest importer of Indian goods. However, exports have been falling over the last three years.
According to trade statistics published by the Indian High Commission in Dhaka, Indian exports to its eastern neighbour touched $6 billion in 2013-14 (July to June), up from $4.77 billion in the previous year. Exports declined to $5.8 billion and $5.4 billion respectively in 2014-15 and 2015-16 and; stood at $4.3 billion during July 2016 and March 2017. Bangladeshi exports to India steadily grew from $456 million to $689 million between 2013-14 and 2015-16.
The current trade logistics between India and Bangladesh is largely road-based and non-containerised. This, coupled with restrictions on vehicle movement between the two nations and axel-load restrictions in Bangladesh, leads to manual loading and unloading in the border, increasing both congestion and trade cost. Rail movement is the ideal solution to reducing trade costs. The two countries have three operational rail links.