Regardless of being next-door neighbors separated by only a slender 21-kilometer stretch throughout India’s Siliguri Hall, famously referred to as the “hen’s neck” which Aman Pant, a Senior Fellow at Nepal Financial Discussion board (NEF), aptly compares to working a half marathon to succeed in Bangladesh, Nepal and Bangladesh proceed to be surprisingly unfamiliar with each other. For a lot of Nepalis, Bangladesh is usually decreased to medical school, clothes, site visitors, and floods. Equally, for a lot of Bangladeshis, Nepal is barely Everest, trekking, Buddha, and earthquake. The 2 nations share a standard sample of a younger inhabitants, aspirational center courses, a ardour for cricket and enduring legacies of medical scholar exchanges and educational ties. The connection between Nepal and Bangladesh requires extra consideration and exploration as a result of each international locations face the dual challenges of diversifying their economies and graduating from the Least Developed Nation (LDC) standing by 2026. In right now’s more and more disordered world, bilateralism and regional integration have turn into ever extra crucial and essential.
The commerce relationship between Nepal and Bangladesh reveals nice promise however stays minimal. Nepal’s exports to Bangladesh peaked at USD 66.5 million in 2008[1] however have since declined, reaching barely USD 3.3 million in 2023/24[2] — a drop of practically 20% from the earlier 12 months. The import information reveals an analogous sample with USD 27.7 million[3] in the identical 12 months representing a 36% lower. Geographic proximity between the 2 has did not translate right into a tangible commerce relationship.
In recent times, power cooperation seems as a promising alternative backed by the trilateral settlement between Nepal, India, and Bangladesh. Nepal exported its first 40 MW of electrical energy to Bangladesh in 2023 and has plans to develop the settlement for a further 40 MW.[4] Bangladesh wants clear energy to inexperienced its readymade clothes sector due to its massive demand, and Nepal has surplus hydro throughout the moist season, which makes it seem to be an ideal match. The idea of “inexperienced clothes,” which refers to Bangladeshi clothes produced by means of Nepali hydroelectric energy, has been proposed as a possible branding technique for each nations. The scenario in items commerce seems extra regarding than in different areas. The export prospects of black cardamom, yarn, and lentils, which had been as soon as promising merchandise for Nepal, have vanished from the export basket of Nepal. The mix of excessive tariffs and complex procedures and particular remedy for Bhutan’s comparable merchandise have decreased Nepal’s aggressive edge, which has resulted in a weak export of those merchandise, which is very delicate to market adjustments.
The symbolic agreements fail to resolve the core structural points which persist within the system. The continued Free Commerce Settlement (FTA) negotiations between the 2 nations are engulfed in its personal complexities, as any tariff concession to Bangladesh mechanically extends to India beneath the India-Nepal Commerce Treaty. The scenario creates a real problem as a result of preferences designed for Bangladesh may find yourself offering undue benefits to India. This case ought to play down our expectations relating to the FTA, and we must always work on establishing sectoral partnerships that keep away from these structural obstacles.
Wanting Past the Conventional Sectors
Unlocking bilateral commerce between Nepal and Bangladesh must be explored by means of newer and extra resilient areas of complementarity as a substitute of awaiting the outcomes of a FTA that’s caught up in complexities and seeks to develop a standard export basket with restricted alternatives for enhanced commerce.
Tourism: Journey, Wellness, and Youth Enchantment. Bangladesh contributes considerably to vacationer arrivals in Nepal, however the potential is far bigger. With a youthful and aspirational inhabitants and rising curiosity in journey journey, nightlife, and wellness getaways, Nepal could be a premier vacation spot for Bangladeshi vacationers. Equally, within the tourism sector of Bangladesh that continues to develop, Nepalis can select to go to Sunderbans, Cox’s Bazar, and St. Martin’s Island, exhibiting the potential for two-way tourism.
The present flight schedule consists of round 12 weekly direct flights between Dhaka and Kathmandu, which serves as the primary entry level as a result of street journey stays restricted for Bangladeshi guests. The air connectivity ought to be utilized by means of improved packages and aggressive fares and bundled journey experiences to make tourism a strong drive for strengthening bilateral relations.
Data Expertise and Digital Companies. The IT sector is one other space which demonstrates robust potential for future development. The Authorities of Nepal has prioritized and designated 2024–34 as its “IT Decade” to attain export targets of USD 25 billion.[5] The monetary sector of Bangladesh operates with power but it has not achieved full digital transformation. Collaborations just like the current Filps partnership with Bangladeshi banks illustrate how corporations promoted by Nepalis can present agility and world connections whereas Bangladesh provides scale and a big home market.
The digital platforms working in Bangladesh, together with Daraz for e-commerce and Pathao for ride-sharing and logistics, reveal how consumer-facing apps can facilitate cross-border commerce and companies. If Nepali IT corporations have interaction with these platforms to enter Bangladesh’s market by implementing backend options and digital fee integration and growing cross-border companies, they might leverage Bangladesh’s scale whereas creating regional pathways for development.
The collaborative work between Nepal and Bangladesh reveals how the 2 nations can construct their digital economies by means of expanded digital market entry for regional entrepreneurs.
Processed Meals and Pickles. Nepali corporations have already began exporting their merchandise similar to noodles, snacks, and pickles to international markets with Wai Wai going world and Yashoda Meals coming into the border cities of India and Bhutan. Analysis reveals Nepali merchandise will succeed available in the market when provide chains and branding methods are correctly aligned. The rising pickle business in Nepal reveals potential to enter the city market of Bangladesh. Moreover, the introduction of halal-certified dry meat and processed meat merchandise to Bangladesh is feasible as a result of these merchandise have already got export markets in Gulf international locations the place halal certification is obligatory for shoppers.
Cosmetics and Life-style Merchandise. The Nepali cosmetics and natural merchandise market which use ayurvedic and pure elements present promise for enlargement into Bangladesh’s rising middle-income inhabitants. Natural and pure model recognition amongst shoppers creates an opportunity for Nepali merchandise to distinguish themselves from commonplace imported items. The rising way of life business, if paired with branding round purity and authenticity, may discover important uptake amongst younger Bangladeshi shoppers.
Hospitality Companies and Gastronomy. Hospitality companies are additionally rising as vibrant connectors. The upscale neighborhoods of Dhaka together with Baridhara, Banani, and Gulshan expertise rising demand for high-end eating and way of life companies from each the prosperous native center class and expatriate communities. This creates house for Nepali restaurant ventures, lodge chains, and repair companies like Himalayan Java, Dalle, and Jimbu Thakali to ascertain themselves not as informal eateries however within the upscale eating and way of life section.
Bridging Past the FTA
If Nepal-Bangladesh relations are to evolve right into a extra trade-driven and true financial partnership, either side should act with pragmatism. The FTA negotiations encounter regional obstacles, however Nepal maintains entry to present sectoral market alternatives in hydropower, IT, meals processing, tourism, and training. The development of logistics and connectivity stands as equally essential as a result of buying and selling by means of Banglabandha and Mongla continues to be costly and impractical even after transit agreements had been established thereby requiring rapid motion to optimize customs procedures for SMEs. The Bangladesh, Bhutan, India, Nepal (BBIN) and Bay of Bengal Initiative for Multi-Sectoral Technical and Financial Cooperation (BIMSTEC) regional frameworks function testing grounds for cross-border power grid tasks in addition to the event of digital fee programs and tourism routes. The combination course of doesn’t must rely solely on tariff schedules as a result of entrepreneurs and shoppers, together with shared aspirations, can drive it. Each international locations share a twin connection to their historic previous and their potential for improvement as a result of they at present face an identical challenges of their quest to depart the LDC class behind. The commerce statistics point out poor efficiency, however the will to diversify and deepen ties is widespread. As neighbors who’ve too usually regarded previous one another, that is the second to look throughout — past the hen’s neck, past the slender baskets of lentils and textiles — and begin creating a brand new partnership.
