The Indian government is learnt to have linked the duty free access of RMG products to lifting total ban on yarn import through land ports.

The Bangladesh government has repeatedly requested the Indian government through its high commission to allow the Bangladeshi RMG a duty free access, a high official of the National Board of Revenue (NBR) said.

"But New Delhi wants total withdrawal of ban on yarn import through land ports," the official said, adding that the Indian government is yet to notify its customs department to free Bangladeshi RMG products from duty.

Bangladesh is seeking the facility to minimise huge trade gap with her neighbour and improve bilateral trade relationship, a high official of the Ministry of Foreign Affairs said.

The Indian officials assured Bangladesh of giving its RMG products a duty-free access on the sidelines of the 12th meeting of the committee of experts on Safta, which was held in Kathmandu on November 29 -December 1 last year.

India agreed to give duty-free access up to six million pieces of RMG products from Bangladesh every year. But, of the total quantity, Bangladesh will have to outsource the required fabrics for 3 million RMG products from India.

For the remaining 3 million RMG pieces, fabrics should be of either Bangladesh or India origin.

The country's readymade garment (RMG) exporters earlier urged the Indian authorities to allow duty-free access for apparel items to their market in the interest of reducing the existing huge trade gap between the two countries.

Benapole land port was opened for yarn import from December 15, 2005 as the government eventually lifted a longstanding ban on it "in the interest of knitwear export".

Yarn import has been opened for 100 per cent export-oriented knitwear-manufacturing firms having customs bond licenses," an official announcement said.

Land ports were closed for import of yarn following allegations of influx of the knitting thread by way of false declaration at the customs stations.

Bangladesh Textile Mills Association (BTMA) has opposed the re-opening of the land ports for import of yarn before evolving effective mechanism to check smuggling.

The government imposed a ban on import of yarn and some other products through the land ports on March 9, 2002 because of infrastructure weakness, smuggling and tax evasion at the ports by the traders in connivance with some dishonest government officials.

Meanwhile, exports to India marked a rise by 68 percent, fetching $241.96 million in the 2005-06 fiscal. In the preceding year, the earning from exports to that country stood at $143.66 million only.

On the other hand, imports from India dropped by around 8 percent, totalling $1,868 million in the last financial year from $2,025.78 million in FY 2004-05, according to the Export Promotion Bureau (EPB).

The trade deficit with the neighbouring country ballooned to a record $2,003 million in FY 2003-04. However, it came down to $1,882 million the following year and $1,626 million in FY 05-06.