regulations, procedural issues, lack of regulatory convergence and information asymmetry act as major barriers for the T&C manufactures on both sides. The existing NTBs indicate that both countries need to put due emphasis on promoting the convergence of trade and technical standards, certification requirements, and testing requirements through mutual recognition agreement (MRA). This can help both countries assuage the high cost of compliance and can improve the cost competitiveness of small T&C manufacturers.

# **4.3 Trade Facilitation and T&C Value Chains between India and Bangladesh**

Importance of effective trade facilitation has increased with the growth of global supply chains. Approximately one-third of global trade takes place in intermediate goods. Goods are largely produced in different countries and cross international boundaries several times before reaching their final destinations. Therefore, quick export and import clearance is critical to GVC operations. GVCs require efficient production processes which include efficient export-import clearances at each stage of the supply chain, so that all firms operate at real-time production and supply schedules. Any delay at port or customs clearance can disrupt the efficient functioning of the entire supply chain.

Functioning of global supply chains depends on two important factors, viz. the state of infrastructure and the trade regulatory framework. Quality of infrastructure is critical for the seamless movement of goods in a rapid, reliable and cost-efficient manner. Robust logistical support enables the smooth flow of inputs and outputs between local production sites and transportation modes (i.e., road, water and railway; land, sea and airports). Efficient administrative, regulatory and customs clearance procedures have positive effects on the operation of value chains, which are produced in spatially dispersed networks. Any additional cost due to cumbersome trading procedures and inefficient border infrastructure creates uncertainty, which in turn hinders the ability of firms to engage in highly sophisticated production networks or respond quickly to demand shifts when intermediate inputs travel through multiple countries. This underscores the importance of effective trade facilitation policies to reduce such costs and delays in the movement of intermediate inputs. Developing countries are making consistent and collective efforts to address regulatory and administrative impediments to make value chains more efficient at both regional and global levels.

The current state of trade facilitation between India and Bangladesh is sub-optimal. The World Bank report (2019) – Trading Across Borders – calculates the time (excluding tariffs) related to the export and import of standardized cargo. India and Bangladesh ranked at 80 and 176 out of 190 countries. On the other hand, Malaysia, Vietnam and Cambodia ranked at 48, 100 and 115 respectively in 2019 (Table 11). It is pertinent to note that India has made substantial progress on various parameters of trading across borders in 2019. However, it will be interesting to see how this impacts the efficacy of export-import operations at ports and facilitates the integration of Indian T&C firms in GVCs.

17