New Delhi, Feb 21: As India and its neighbouring countries now focus on speeding up economic recovery in the post Covid 19 pandemic phase, timely implementation of the much awaited Bangladesh-Bhutan-India Nepal (BBIN) Motor Vehicles Agreement (MVA) would be critical. South Asia is one the least integrated blocs in the world but reducing red tape will help in boosting regional trade.
For India, it is more cost effective to trade with the US or even Brazil than with the neighbours.
"Talks on this issue are being regularly held but now the authorities need to implement the pact in a time bound basis. Discussions need to effectively conclude," an analyst told India Narrative.
Once the BBIN MVA is in place, the cost of trade in the region could easily come down by over 35 per cent-something that will push economic recovery in the region even as global uncertainties continue.
The MVA once implemented will facilitate seamless cross border movement of trucks with less regulatory and paperwork requirements. Though the customs and tariffs would be decided by the individual countries, the aim is to make the transport facility seamless and efficient, which in turn would boost trade.
Currently, trade among the BBIN countries is just 6-7 per cent of the total trade though the potential is "much higher."
"The Covid pandemic has highlighted the need to expand regional cooperation, especially countries that share borders. It has given us a chance to revisit our regional strategy.. how effectively we fight back in the post pandemic phase will largely depend on our cooperation and even flexibility," Nazneen Ahmed, Country Economist at United Nations Development Programme (UNDP), Bangladesh told India Narrative.
A World Bank blog said that World Bank analysis finds that under the MVA, a truck traveling from Agartala in India's north east to Kolkata port will take 65 percent less time and be 68 percent cheaper.
At present, plethora of documents and approvals are required to trade between India and Bangladesh. In Bhutan, importers need to submit their documents to different authorities 86 times on an average while exporters need to so 74 times, leading to unnecessary and long delays which also add to the costs," the World Bank blog noted. It further added that these measures could bestow enormous benefits on the countries of the sub-region. In Bangladesh, for instance, seamless connectivity with India can raise national income by as much as 17 per cent, while India would gain by 8 per cent. "Bhutan and Nepal can be expected to see similar results, spurring robust, resilient, and sustainable growth across the region," it said.
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