Introduction
1. If the exports of a nation exceed its imports, the nation is said to have a favourable balance of trade or a trade surplus. Conversely, if the import exceeds exports, an unfavourable balance of trade, or a trade deficit, exists. According to the economic theory of mercantilism, in Europe from the 16th to the 18th century, a favourable balance of trade was viewed as an absolute necessity. This was to be achieved by establishing colonies that would buy the products of the country and would export raw materials, particularly precious metals, seen as the certified source of a nation’s wealth and power.
2. The current trade pattern between Bangladesh and India is increasingly becoming a problematic for the fragile economy of Bangladesh. The volume of bilateral trade between the two countries has grown up significantly over the last two decades and a half. But the trade reciprocity between the two trade partners deteriorated severely at a sky rocketing annual growth rate, resulting in a colossal bilateral trade deficit against the country during the recent years.
3. Against the above mentioned backdrop, there is an immediate need for addressing the problem in totality e.g. exploring the unknowns into information and identifying some durable solution of the problem. With this view in mind the broad scope of the paper will be unfolded under the historical development of trade relations between India-Bangladesh, trend of trade imbalance between the two countries, causes and impacts of the trade imbalance and ways to reduce trade imbalance.

Aim
4. The aim of this paper is to study the pros and corns of India-Bangladesh bilateral relationship and way out to mitigate trade imbalance.

Historical Development of Trade Relation between Two Countries
5. Under British Rule. Historical evidences suggest that the British were primarily attracted by the agricultural resources of the region and their efforts were concentrated towards ex...