New rail container depot to facilitate India-Bangladesh trade

New rail container depot to facilitate India-Bangladesh trade

A container train makes its way through Dhaka, the capital of Bangladesh. Photo credit: Shutterstock

Bangladesh is building a new inland rail container depot at the Ishwardi rail station, which is the biggest rail junction in the country, to facilitate India-Bangladesh trade.

Bangladesh is India’s seventh-largest trading partner by volume, and total trade between the two countries rose 28.9 percent year over year in 2016 to 16.5 billion kilograms, according to the IHS Markit Global Trade Atlas. Two-way trade through July fell 25.8 percent to 7.5 billion kilograms, but India has offered Bangladesh duty-free and quota-free market access.

“The place is very suitable for a depot. The Indian officials said every day some 350 to 450 TEU will reach here,” additional director general of Bangladesh Railway Habibur Rahman told JOC.com.

One reason the new site was chosen is the proliferation of economic zones in the southwest of Bangladesh on the border with India that import raw materials for processing before export to India. The goal of the new depot is to facilitate that shipping.

The depot will also have rail connections to the Mongla port, which is expanding to take pressure of Bangladesh’s primary and congested gateway at Chittagong.

Rahman said his office is waiting for permission from Bangabandhu Jamuna Multipurpose Bridge to hold a trial run on a container train service between the Bangladeshi capital of Dhaka and the Indian city of Kolkata, which also has its own port. Strong rail connections with Kolkata could make that port an alternative for shippers that need to move goods to and from parts of Bangladesh.

“The container train service will cut cost and time for carrying goods,” Rahman said.

Bangladesh in 2016 exported $723.5 million in goods to India, a decline of 0.14 percent, and imported $6.4 billion from India, an increase of 7.5 percent, according to the Global Trade Atlas.

Bangladesh mainly exports woven garments, knitwear, home textiles, agri-products, frozen food, leather and leather products, footwear, raw jute, jute goods, and bicycles.

On the other hand, Bangladesh imports cotton, cotton yarn, cotton fabrics, vehicles, nuclear reactor, boilers, machinery and mechanical appliances, cereals, edible vegetables, and iron and steel.