They said both the countries should try to resolve the problems relating to cargo movement and quarantine with Indian involvement, as the countries need to use Indian soil while transporting goods by road.

"The bilateral trade, which amounted to US$ 13 million in fiscal year 1994-95, decreased to US$ 2.56 million in FY2004-05," said Mir Nasir Hossain, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), according to a report appeared in Kathmandu Post yesterday.

He was speaking at a seminar on 'Bangladesh-Nepal Economic Relations: Prospects and Problems' held in Kathmandu on Friday.

Bangladeshi embassy in Nepal and Export Promotion Bureau (EPB) of Bangladesh organised the seminar on the sidelines of the five-day 'Bangladesh Single Country Fair 2005' that began Thursday at the Birendra International Convention Centre (BICC).

Fifty-one Bangladeshi companies are displaying handicrafts, cosmetics, ceramics, clothes, jute products, melamine, stationery, furniture and satellite communication products at 55 stalls in the fair.

The FBCCI president pointed out that both the countries should initiate serious steps to start the Dhaka-Kathmandu direct bus service to promote bilateral trade.

"There are many potential business areas where the two countries can cooperate more extensively to up the volume of bilateral trade. Bangladesh can export pharmaceuticals, jute, fertilizer, frozen foods, handicrafts, woven garments and dry cell while Nepal's export potential lies in carpets, woolen clothes, dairy products, handicrafts and fresh fruits," he said.

Humayun Kabir, Bangladeshi ambassador to Nepal, said the governments and the private sectors should work together to remove the roadblocks that have come on the way to strengthen economic relations.

Mostafa Mohiuddin, acting vice chairman of the EPB, Dhaka, said Bangladesh was eyeing East Asian and Saarc markets in lieu of western ones. "The agreement on Safta will be a milestone to boost regional trade," he added.

Claiming that the joint venture projects set up in Nepal are successful enterprises, Chandi Raj Dhakal, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), stressed the need for expanding the areas of joint venture.

Dr Dev Bhakta Shakya, executive director of the Agro-Enterprises Centre of FNCCI, said higher tariff and special duty on Nepalese agriculture products were affecting the Nepal's export to Bangladesh.

Bangladesh has imposed 25 percent tariff on most of the Nepalese agricultural goods while Nepal has imposed only 10 percent tariff on the same category from Bangladesh, he added.