Dhaka for Inclusion of Border-Hat Deal with Delhi

By Nazmul Ahsan

Dhaka, Aug 9 : Bangladesh has set a couple of conditions for signing of the Border Haat agreement with India.

It wants the border hat trading be exempted from local tax levied by the Indian state government and establishment of bank branches or money changer booths to check smuggling, a top official in the Ministry of Foreign Affairs (MoFA) said.

The MoFA has asked the Indian government last week to include the provisions concerned in the final draft of the Border Haat agreement, sources said.

"We have asked the Indian government to include clauses like non application of local tax of Meghalaya State on border haat trading and establishment of either bank branches or a moneychanger's booths in the proposed haat to check possible smuggling," a top official in the MoFA said.

"The government will not proceed further for signing the proposed agreement with India until the latter addresses our concerns in the final draft agreement," he added.

The MoFA has contacted the Indian High Commission in Dhaka in this respect following a directive from the Prime Minister's Office (PMO), it is learnt.

Commerce ministry officials of the two nations prepared the draft deal in mid May last in Dhaka, agreeing to impose caps on trading and making the bazaars accessible only for the people who live in and around the area.

However, the PMO raised objections to the negotiated draft agreement as it missed the issue of local tax.

According to the negotiated draft of the proposed agreement, trading at the border markets will not be taxed or levied, and will not fall under purview of foreign trade policies and laws of the two countries.

"We now want the draft agreement say the border haat trade is exempted from both central and state taxes to avoid any uneven trading system as Bangladesh has no local tax compared to those of Indian states," a top official in the PMO said.

Presently, the Meghalaya State of Indian government has 6 to 8 per cent local tax imposed on trading that takes place within the state, sources said.

Two bazaars will be set up in the first phase - one in Sunamganj and another in Kurigram along India's Meghalaya frontier. The trading will be held once a week, said the negotiated draft agreement.

Besides, the draft said an individual will not be able to trade goods valued above $50 at the bazaar and the trading should be conducted in currencies of the two nations.

Officials in the MoFA said a meeting is required between central bankers of two countries to clarify the transaction modalities to prevent possible smuggling under the proposed haat as the draft agreement did not say anything about establishing bank or money exchange outlet to deal with the currencies of two countries.

Furthermore, the negotiated draft agreement said a committee comprising government officials and officers of border security forces of the two nations will manage the markets and will sit periodically to review its operation. The committee will be headed by the local administration.
"We have asked the Indian authority to keep provision for bank or money exchange outlet to deal with currencies in the proposed haats, while we have proposed Deputy Commissioner to head the committee," a top foreign ministry official said.

Farm and home made items produced in 10 kilometer radius of border bazaar will be allowed to trade in the bazaar, which will be set up within five kilometers of the frontier, instead of 10 kilometer as agreed earlier.

Dhaka and New Delhi agreed to set up border markets in January, 2009 when Prime Minister Sheikh Hasina made her first visit to India.

India has been pressing the government to ink the deal as early as possible. Earlier, it asked the government to start the markets on the first day of the Bengali new-year - on April 14, 2009-- but the attempt fell through after concerns were raised that the proposed deal on the border bazaars did not adequate steps against smuggling.