India and Bangladesh agreed to start negotiations for a free trade agreement (FTA) to improve economic prospects and boost bilateral trade.

In early date, India and Bangladesh commissioned a joint feasibility study on a Comprehensive Economic Partnership Agreement (CEPA). According to the agreement, the two countries can reduce or eliminate customs duties on the maximum number of goods traded between them. Also, it can ease norms for promoting trade in services and attracting investments.

The bilateral trade in the fiscal year of 2022 between India and Bangladesh increased by 69% year on year to US$18.2 billion.