How to Export Agro and General merchandise to Bangladesh from India ?

[Kishan Barai]

Article

Agro-industry beholds the benefits of local food needs, economic benefit, and employment opportunities all around the world. Other industries directly or indirectly depend upon agriculture for proper functioning. Bangladesh is well known in the agro market because of its fertile land. Most of the agro-trade of Bangladesh is associated to India at land custom stations through proper custom clearance channels. Agriculture goods are packaged, preserved, stored, and transported through this channel across both countries. There is certain documentation requirement to held out the process and channels strict assessment is secret to fruitful and successful agro trade between India and Bangladesh.

Trend Overview

Agro-trade is a highlight of the economic and employment sector of Bangladesh because of fertile lands, to achieve sustainable development, meet the need for food and self-employment purposes young generation has diverted their professions to agripreneur. Paddy is the main and most cultivated crop in this region and account for 52.6% of independence ratio. It involves post-harvest activities (processing, preservation, consumption).

Trade between India and Bangladesh & among SAARC- (Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka)

Bangladesh trade is 2.4 percent (1.7 dollars) of Bangladesh global trade (72.6 dollars, import being the highlight of this trade (83%). Among all other SAARC countries India is vital agro trade partner of Bangladesh with a total of 93.9% trade, out of which 12.4% is export and 22.2% is import. Trade is a result of formal an informal procedure.

Formal Procedure:

The Bangladesh importer applies to the Department of Agricultural Extension (DAE)/DLS for an 'import authorization' (IP), Gob Books (depending on the plant or animal nature of the imported item). Upon receipt of all the required documents, the importer receives the IP and the letter of credit (L / C). To complete the process a few more certificates are required based on product description. These –

1. SPS certificate, which must include the IP number. According to Gob rules, all agricultural and food products enter Bangladesh must be confirmed by the DAE in terms of its compliance with the requirements of the SPS under WTO rules,
2.  EPB Country Verification (http://www.epb.gov.bd/) Certificate for imported product

A certificate issued by the DAE, which confirms that agricultural products are imported into Bangladesh.

they are suitable for human consumption and do not contain more than 50 by / kg radio (Becquerel / Kilogram). In addition, those who import agricultural products use another certificate called weight analysis certificate (WAC), related to product weight analysis before making final import.  As soon as the products are shipped to Bangladesh a Fumigation certificate is issued by the quarantine unit which means that agricultural and food products are suitable for human consumption.

Informal Procedure

Seed varieties of rice, pulses, vegetables, jute, spices such as tomatoes and onions, Other items are fresh vegetables, betel nuts, seasonal fruits such as mangoes, bananas, apples, guavas etc are traded between India and Bangladesh through informal systems. The informal trade also includes spices such as fresh onions, turmeric, ginger, sugar, salt, etc.

The procedure includes the pursuits:

(a) traders who intend to trade in crop production must apply for registration with the National Seed Board (NSB) of the Department of Agriculture (MoA).

(b) the new variety may be approved by the NSB after passing the Distinctness, Unity and Stability (DUS) (by the Seed Certification Agency) and

(c) following the approval of the NSB Technical Committee on the results of multidisciplinary performance appraisal [Agricultural Value and Use (VCU) tests].

 Only if NSB has issued a consent order – a reported crop seed variety can be exchanged formally. Though, as was informed at KIIs, at the micro-level farmers are less anxious about the type of trade (whether formal or informal). They are rather more concerned to have the seed variation that match their harvesting arrangement. Bangladesh also requires wheat and jute seeds to meet its local demand for which the country is reliant on India.

Trading Routes and land custom stations:

This trade at borders of countries is handled through custom stations where import export goods are handled, packaged, and transported to both countries. For India Bangladesh trade a land custom office is situated at the Agartala, junction of either country borders It provide facility of transit, custom, immigration and cargo services for goods and passengers entering or leaving Bangladesh to northeast India. It costs 1-5 pesos’ depending upon the type and size of goods. Land custom station routes in former countries are.

(I) Chheherte Railway Station and Orient Jute Mill Jetty are selected as Land Customs Stations just for the objective of export of food pellets from India.

(ii) Ghasuapara is retained as Land Customs Station only for the objective of exports of all commodities from India; and

4. Golakganj is hired as a Land Customs Station only for the objective of export of stone boulders, stone chips and coal from India.”.
5. Additionally, Phulbari is selected as Land Customs Station for the objective of import or export by any national of, –

(a) Bhutan in any vehicle of Bhutan, or

(b) Nepal in any vehicle of Nepal, by land from or to Bangladesh.

iv) In regard of Shella Bazar Land Customs Station, the land lane from Pyrkan via Pharangkaruh (near B.P. No. 1231-S) to Bastola in Bangladesh, is chosen simply for the aim of trade of all commodities from India.”

Custom clearence procedure:

To export or import goods it is necessary to accomplish custom clearence according to section 131 of custom act,1969.

Custom Clearance procedure for Export

A bill or custom clearance declaration is a necessity for the procedure. It must contain flowing.

1. Export L/C (recommended); if there is no export L/C, Export Contract or Buying Order or Trade Guarantee endorsed by the cooperating bank.
2. Industrial invoice including a comprehensive description of goods and signed by the exporter.
3. Sorting list including quantity, weight and packing info.
4. EXP form licensed by Authorized Dealers (ADs) to guarantee the completion of export profits.
5. Certificate of Origin of export goods (issued by EPB or Chamber of Commerce and Industry).
6. VAT listing certificate.
7. Taxpayer Identification Number (TIN) issued by Income Tax Department under the NBR.

For certain types, product-wise added certification/documents are needed for trade.

A Few of them involve:

1. ERC for jute, jute supplies and tea.
   2. Shipment wise export license issued by the Bangladesh Tea Board for export of tea.
   3. Authorization of the Ministry of Industries in the case of export of Urea fertilizer manufactured in all factories excepting KAFCO.
   4. ‘No objection certificate’ from the Ministry of Information in the case of export of entertainment programs, music, drama, films, documentary films etc. in the way of audio cassettes, video cassettes, CDs, DVDs etc.
   5. Consumption Declaration for export of RMG under merged warehouse or Utilization Permission for export of other goods under merged warehouse.
   6. Phytosanitary certificate for agricultural goods (such as vegetables, corns etc.) as per the obligation of the state of export (issued by the Plant Protection Wing of the Department of Agriculture Extension).
   7. Quality control certificate in case of export of products for which such certificate is mandatory (e.g., quality control certificate by the Department of Fisheries is necessary as per the requirements of the country of destination for frozen fish).
   8. NOC from the CCI&E and Bangladesh Bank to allow exports on an export-cum-import or returnable basis.
   9. Bank pledge equaling the cost of goods to be exported on an export-cum-import or returnable basis.

When the export testimony is certified by the Customs authority after documentary check and physical verification of export consignments, exportable commodities are packed into containers and stuffed into the ship/aircraft/truck. Export is completed once the ship/truck/airlines departs the port, and customs officer in command (PO-on-Board/gate division officer in charge) signs on the back of the 2nd copy of the shipment bill (as ‘shipped on board’). It is to be stated that where goods are packed into containers at the private ICDs/exporters’ premises, gate division officer may check the goods.

Customs Clearance Procedures for Import

For imported goods into Bangladesh, transport agents give in their distinct data (containing a description of imported goods by ship) electronically to the Customs authority. In the case of import by truck (through land customs stations), the trucking company/driver submits IGM to the customs authority. Once the Import General Manifest (IGM) is submitted online (In the case of import by truck, manually), the chosen C&F Agent (or the importer himself) finalizes the statement of the goods (popularly known as Bill of Entry or B/E) from their own grounds and submits the goods declaration to Customs systems through ASYCUDA World. The declaration or B/E has to be made in a particular format, known as Single Administrative Document (SAD).

The Prescribed Bill of Entry and Bill of Export Form Order, 2001 published by the NBR outlines the documentary compliance constraints. For release of goods from Customs, following details need to be submitted along with the declaration for all types of imports:

1. Letter of Credit (L/C).
2. Invoice
3. Bill of Lading/AWB/Truck Receipt/Railway Receipt
4. Packing List
5. “Country of Origin” Certificate (except coal and export-oriented garments industries)
6. Insurance policy/cover note.
7. VAT/BIN Certificate

Additionally, records required for different types of goods, are:

1. BDS standard will be compulsory for approval of 55 items, and in case where no certificate from and certified laboratory from the exporting country is accessible, a certificate from the BSTI is required, as per Import Policy Order, 2015-2018 Para 26(28).
2. Radioactivity test report from the concerned authorization of the exporting country for food items (Import Policy Order, 2015-2018 Para 16).
3. Clearance certificate(s) from the Bangladesh Atomic Energy Commission for food items to the effect that the radioactivity level found in the imported foodstuff is within the standard threshold (Import Policy Order, 2015-2018 Para 16(9)).
4. Pre-shipment Examination report for milk food goods and powder milk, coal, and hard coke, Break Acrylic (HS 39.15 and 3915.90), M.S. Billets (7207) and for articles where the value of a single item permitted for import by public district organizations is Taka fifty lac or above.
5. Authorization letter of the Chief Inspector of Explosives of the Ministry of Power, Energy & Mineral Resources for import of explosives (Import Policy Order, 2015-2018 Para 26(1)).
6. Copy of intellectual property certificate (by the IPR holder of the exporting country)  in the case of import of labeled goods recorded under any law related to IP in Bangladesh [Para 5(6)(c) of Import Policy Order, 2015-18]

After the tasks and taxes are evaluated by Customs, the importer (or his C&F agent) pays duties and taxes. On compensation of duties and taxes evaluated, Customs issues release order for clearance and after completion of port procedures, goods are cleared.

Samples priced up to US $100 and weighing up to 5 kg is cleared (through manual system) same day (in Dhaka Air freight) if the consignee authorizes duty and tax to be allocated to the shipper on the Air Waybill. Samples priced over US $100 and weighing more than 5 kg will require formal clearance through ASYCUDA WORLD system.

It is to be noted that for the customs clearance of imported animals, plants and plant products, quarantine requirements (such as certification from the quarantine department, fumigation etc.) shall have to be observed. As per Import Policy Order, 2015-2018 Para 26(60), fumigation is compulsory in case of import of raw cotton manufactured and packed in the Western Hemisphere.

If an import shipment is not cleared within 21 days (of the date of unloading at a Customs airport) or 30 days (of the date of unloading at a customs-port or a land customs station or customs-inland container depot), or within the prolonged time as the suitable officer may allow, the shipment may be disposed of through public sale [Section 82 of the Customs Act 1969].

In cases, where it is not likely to evaluate customs duty that may be billed on any imported goods for the cause that the goods need chemical or other test or a further query for purposes of assessment, or that all the documents or complete documents or full information relating to those goods have not been equipped, Customs authority may assess the shipment tentatively. In such cases, the importer (except goods entered for warehousing) needs to provide an absolute bank guarantee/security deposit of an amount (as deemed sufficient by Customs) from a listed bank for the payment of the excess amount of duty that may be allocated after the final assessment. In this case, the final assessment must be done within a time of 120 working days from the date of conditional assessment.

Need for the imports in Bangladesh.

Major crisis like flooding, earthquake or drought resulted in a fall of food count of Bangladesh on several occasion. One example is the drought of 1998 that resulted in famine and a major fall in rice and wheat availability to public of Bangladesh that was unable to cop up although there was major funding. in such time imports of agriculture products helped in coping up the loss and averting the crisis. More broadly such crisis highlighted the benefits of imports for Bangladesh.

Method to find Importers (buyers) in Bangladesh:

The best way to access buyers in Bangladesh is through import-export directories available online. These are best tools for the purpose as they contain complete information regarding:

Buyer agencies

Product (for buying)

Contacts

Import methods.

Such information you can accquire from websites like https://www.thedollarbusiness.com/ , https://www.volza.com/ or https://panjiva.com/

Social media

 is a key to finding importers for startups or business purposes.

Facebook groups providing information regarding import and export also provide potential customers.

Google Ads is another way.

Google search console

A profile of Indian exporter profile attracts potential customers.

To attract customers online one must create an advertising website. Invest in search engine marketing.

Induce search engine optimization for the product.

Trade fairs and exhibitions

Trade fairs are platform to meet and attract potential importers to your products. It is a direct platform to meet international buyers, companies, and organizations. These fairs are held on national and international level.

Administration bodies like Export Marketing Committees

Administration bodies like Service Boards and Export Marketing Committees, and even Governments, can be a great resource of info when it comes to exploring for buyers for export. These companies are tasked with expanding the country’s exports and helping exporters and will be more than happy to provide details like names of possible buyers, locations where you can meet them, etc. You can also gain access to trade data and statistics on the export of various products in your sector, apart from data on existing buyers. As stated earlier, events and commissions arranged by these bodies are the best way to meet potential buyers and sign them on.

Legations

Whilst not usually trade-centric institutions, legations nevertheless can be a good source for trade-related info. India has consulates and delegations in many countries, with close to 200 embassy missions global. They have log on to local news and market fashions, and you can approach them to ask for names of reliable buyers in that country in your sector. APEDA, FIEO and other Export Promotion Council can also reach out to these tasks on your behalf to seek info on buyers and pass it on to you. Nevertheless, it must be noted that in all such cases, the obligation of due conscientiousness about the reliability of the buyer lies with the exporter and not the EPC or the legations.

Market Inquiry Firms

Plenty of firms offer trade-related skilled services to exporters and traders, including global directories of importers in various countries, market investigation and studies, shipment-related info, etc. You can purchase information specific to your product and sector from these firms; however, do note that the cost may sometimes be quite steep. You can search for Bangladesh Business Consultants from Google for specific market-related help in Bangladesh

Conclusion

For trading purposes, proper product, market, customs procedure and buyer finding is some of the key necessities. In case of Bangladesh and India trading practices land custom station (LCS) fulfil the duties of custom clearance....