Vol. 5 Num 1038 Fri. May 04, 2007  

India's non-tariff barriers on Bangladesh cement may go

The non-tariff barriers (NTBs) Bangladesh cement exporters have been facing from India for long are likely to be removed soon as an experts team from the importing country will visit here to ascertain capabilities of Bangladeshi testing labs for certification, said industry insiders.

As per the decision in the fourth meeting of Bangladesh-India Joint Working Group in New Delhi, the four-member Indian team will be here to have ideas of the capabilities of Bangladesh Standard and Testing Institute (BSTI), which has all equipment to test cement quality.

In case of exports of cement, the BSTI certification is not allowed by India, so the local cement manufacturers need to get ISI certificate from the Bureau of Indian Standard (BIS).

These manufacturers have identified such an ISI certification as a major NTB in exporting cement to the Indian market, especially to the north-eastern states of that country.

The certification process made the export a very cumbersome, time-consuming and expensive process, they lamented.

Besides, Bangladeshi exporters have to submit other documents that include their factory plan, design, layout plan, production flow chart, qualification statement of their lab experts, statement of lab equipment, description of production equipment and road map from production factory to export-import interface.

After receiving all these documents with application for ISI certification by Bangladeshi exporters, the Indian BIS officials visit the respective export units in Bangladesh with permission of Indian government, the local cement manufacturers said, adding that they have to bear all the cost relating to such visit and inspection of the importing country team.

In addition, the Bangladeshi exporters have to pay huge amount of money as initial fee for the certification plus one percent to 1.7 percent levies on invoice value of goods.

They will also have to pay US$2000 as annual marketing fee and additional service tax at the rate of eight percent. Apart from this cost on big heads, there are also some other costs for obtaining certification from BIS.

In the context of the imminent visit of the Indian assessment team, a high official of the commerce ministry said it would take three to four months to complete the process of increasing capacity of the BSTI.

The country has 21 cement factories with an annual production capacity of around 70 lakh tonnes.

The local annual demand is about 60 lakh tonnes and the industry reels with an saturated situation, the industry sources said.

"If the local entrepreneurs cannot export cement to the neighbouring countries, some will face extinction due to the saturated situation," Ashiqur Rahman Shipon, production manager of a leading cement factory, said.