India is to allow the duty-free import of previously barred goods from Bangladesh, including a number of textile and garment items.

Prime Minister Dr Manmohan Singh announced the news while on a visit to Bangladesh, during which he said the Indian government was “fully alive” to the issue of trade imbalance between the two countries.

He added that India had undertaken a number of measures to facilitate Bangladesh’s exports to India, giving it greater access to the market and to other neighbouring countries.

The easing of the barriers comes after Bangladesh lobbied for the removal of 61 items from the list of protected goods kept by India under the South Asian Free Trade Agreement (SAFTA), 46 of them textile and garment-related.

Bangladesh has also complained about difficulties with exporting to India because of testing, delays and bureaucracy at border crossings.

However, India’s textile industry is concerned about the impact of the easing of the restrictions, especially because Bangladesh typically enjoys lower production costs.