Several barriers are responsible for the rise in the informal trade in health services between the two countries.<sup>31</sup> A 2010 survey of patients‘ perceptions about barriers to accessing Indian health services showed a high proportion of similar complaints, from visa issues to medical insurance limitations and high air fare costs (Table 7). To reduce the barriers: (i) the Bangladesh government could allow Indian medical institutions to set up hospitals under mode 3 (India‘s Apollo Group has set up a hospital in a joint venture at Dhaka, but it is too small to meet local demand<sup>32</sup> ); (ii) professionals in health services could be allowed to move freely (under mode 4) between the two countries; and (iii) genuine patients from Bangladesh coming to India for treatment could be granted visas on arrival at Indian land ports or airports. Although both governments have agreed to facilitate the granting of long-term, multiple-entry visas to research scholars and students, and people visiting on medical grounds, the progress on the ground has been slower than what has been targeted.

|**Table 7: Perceptions of Bangladeshi Patients* abo**<br>**Particulars**|**ut Indian Health Services**<br>**Percentage of**<br>**Patients (%)**|
|---|---|
|Complicated visa|77.90|
|Fraud of informal foreign exchange traders|40.00|
|Lack of pan-South Asia medical insurance|80.00|
|High airfare|64.70|

*Sample size: 190 patients. _Source_ : Banik _et al_ . (2010).

# **3.4. Scenario Analysis with the Global Computable General Equilibrium (CGE) Model**

The global CGE modeling framework of the GTAP uses aggregated data on regions and commodities for its objectives.<sup>33</sup> Version 7 is used here, covering 57 commodities, 113 countries/regions, and 5 factors of production––although for purposes of this study the 113 countries/regions are aggregated to 6.<sup>34</sup> Three scenarios are considered: (i) a full FTA for goods between Bangladesh and India, (ii) India‘s unilateral duty-free, quota-free (DFQF) offer to Bangladesh, and (iii) a full FTA for goods and improved connectivity (FTA plus). To capture the improvement in connectivity, a 25 percent drop in the bilateral trade-cost margin between Bangladesh and India is simulated.

An FTA-plus–improved-connectivity option clearly would have the greatest impact on world imports to both countries (Figure 5). In both FTA-only and FTA-plus scenarios, Bangladesh‘s imports would rise more than India‘s because India is Bangladesh‘s primary source and Bangladesh is an insignificant source for India. With the DFQF option, imports into Bangladesh would increase by only 0.29 percent, since Bangladesh would not liberalize its trade regime. With regard to exports (Figure 6), it is notable that Bangladesh‘s increase would be higher with the FTA-only scenario than the DFQF option. This is because the FTA would increase access to cheaper raw materials through tariff liberalization, which would not occur in the DFQF scenario. However, exports from Bangladesh would rise most in the FTA-

> 31 Rahman (2002) found that about 20 percent of the approximately 50,000 Bangladeshis that chose to go to India for treatment in 1999 went without the right visas: in most cases, patients chose touri **s** t visas to avoid the more arduous medical visa process.

> 32

> Another new Apollo Group hospital is being established in Chittagong.

> 33

> See Appendix 2 for explanation of the GTAP model. This study uses the Version 7 database, with 2004 as base. This has been adjusted with some pre-simulations to reflect the base year as close to 2010 as possible.

> 34 See Appendices 3 and 4.

13