Indian traders have alleged that some Bangladeshi commercial banks are refusing to pay some letters of credit (L/Cs).

The allegations coincide with several trade quarrels currently under discussion in a meeting of the Bangladesh-India Joint Working Group.

Non-tariff barriers

The working group began its meeting in Dhaka on 1 August 2005 by discussing bilateral trade issues, with a particular focus on the thorny problem of non-tariff barriers (NTBs).

According to local media reports, the two sides are trying to find out ways to eliminate NTBs, and they are trying to find ways to lower other barriers to bilateral trade, including poor infrastructure, banking and land port facilities.

Slow progress

Bangladesh, which is by far the smaller of the two trading partners, has long complained about NTBs, which they say the Indian authorities keep erecting under a variety of pretexts.

Despite frequent assurances to the contrary from the Indian government, traders in Bangladesh say the barriers remain high and progress towards lowering or dismantling them has been very slow.

L/C allegations

In the run up to the trade talks however, it appears the advance Indian delegation were in no mood to accept all the blame for all of the barriers to trade between the two countries. They said Bangladeshi commercial banks have defaulted on import payments against L/Cs.

Bangladeshi business leaders denied the allegations, saying that there might have been discrepancies in either the goods shipped or the documentation.

Examinations

The president of the Federation of Bangladeshi Chambers of Commerce and Industry, Abdul Awal Mintoo, however, conceded that there might be more substance to the allegations.

"One or two cases need to be examined," he told local media.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.