Bangladesh is to resume talks after five years on a Free Trade Agreement (FTA) with India that it hopes will allow greater access to the Indian market.

Commerce Ministry officials are to begin the exercise on Wednesday and an inter-ministerial meeting is scheduled to be held end of this month to work out the details.

A major objective of the agreement is to narrow Bangladesh’s widening balance of payments deficit against India, worth more than $3 billion a year in formal trade.

India has for long offered FTAs to all South Asian neighbours while simultaneously trying to work out a regional arrangement called South Asian Free Trade Agreement (SAFTA) under the aegis of the South Asian Association for Regional Cooperation (SAARC).

However, neither has worked out.

Dhaka now prefers signing a bilateral agreement with New Delhi to ensure easy access of Bangladeshi goods to the Indian market, so far denied by tariff and non-tariff barriers, officials say.

After signing the free trade agreement with New Delhi, Dhaka will resume negotiations with Colombo and Islamabad to strike similar agreements, Commerce Minister Faruk Khan said.

Following broader understanding on market access issues between India and Bangladesh during the visit of Prime Minister Sheikh Hasina to Delhi in January, Khan asked officials to make necessary preparations in this regard.

“We will go ahead with the high-level decision to make arrangements for market access for Bangladeshi items. We are planning to make bilateral agreements alongside multilateral arrangements,” said Commerce Secretary Golam Hossain.

Officials said Dhaka would initially focus on item-based arrangement before bringing the services sector under the coverage of the planned bilateral free trade regime.

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