Bangladesh wants India to remove all tariff and non-tariff barriers on Bangladeshi garments.Although India granted duty-free access for Bangladeshi readymade garments in September 2011, the volume of trade has not risen to expected levels. Bangladesh feels this is due to various barriers. The main complaint is that despite granting duty free access to Bangladeshi garments, India levies a countervailing duty of 8 per cent on the assessable products and a special additional duty of 4 per cent. A further point is that India does not accept test certificates issued by laboratories in Bangladesh for garments and other products.
In the meantime the neighboring country has urged Indian entrepreneurs to set up their units in Bangladesh and take advantage of the duty-free and quota-free access it has to advanced countries. India and Bangladesh's trade basket of goods and services includes cotton, automobiles, iron and steel, mineral fuels, paper yarn, copper and related products, and organic and inorganic chemicals. Bangladesh is an important trading partner for India. Bangladesh and India have signed the doubletaxation avoidance agreement as well as one on bilateral investment promotion and protection.