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India-Bangladesh ties headed for a 'golden phase', with enhanced connectivity creating new opportunities

The two countries’ leaders have brought Delhi and Dhaka closer and can together bring economic prosperity to South Asia, writes Pathik Hasan for South Asia Monitor

Pathik Hasan Dec 20, 2021
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Indian Defence Minister Rajnath Singh spoke at Bangladesh High Commission at an event to mark Armed Forces Day of Bangladesh (Photo: Twitter)

Bangladesh’s stable economic development is creating new opportunities for India’s northeastern states. Work on a Comprehensive Economic and Partnership Agreement (CEPA) is underway. The two countries are celebrating 50 years of friendship. Indian President Ram Nath Kovind just ended a trip to Bangladesh. 2021 also marks the golden jubilee of Bangladesh’s liberation and half a century of diplomatic ties between the two South Asian neighbours.

Indian Defence Minister Rajnath Singh has said that India-Bangladesh relations are going through a "golden phase". As Bangladesh attains a “developing nation” status (from a “less developed country”), New Delhi has reiterated its commitment to deepen trade and economic ties with Dhaka as partners rather than competitors.

Bangladesh’s holistic development is viewed positively by New Delhi with new opportunities arising along India’s northeast region. Bangladesh and India share a 4,096-km (2,546-mile) border, the fifth-longest land frontier in the world, including 262 km (163 miles) in Assam, 856 km (532 miles) in Tripura, 318 km (198 miles) in Mizoram, 443 km (275 miles) in Meghalaya, and 2,217 km (1,378 miles) in West Bengal.

Bilateral trade

Bangladesh is India’s biggest trade partner in South Asia and India is the second biggest trade partner of Bangladesh. Bilateral trade has grown steadily over the last decade. Exports of Bangladesh have tripled over the last decade to cross $1 billion in 2018-19. In FY 2019-20, India’s exports were $8.2 billion and imports $1.26 billion. Bangladesh is the central pillar of India's Neighbourhood First policy. Bilateral trade grew at an unprecedented rate of 14 percent during the Covid-19 period -- from $9.46 billion in 2019 to $10.78 billion in 2021.

The two countries should now concentrate on people-to-people contacts, trade, business and connectivity as these have become increasingly important for both sides. A deeper economic and trade engagement becomes all the more relevant, given the success of phenomenal and uninterrupted supply chains during the pandemic. Augmented connectivity infrastructure is imperative to actualize bilateral trade and investment potential.

India’s Commerce and Industry Minister Piyush Goyal has recognized five focus areas to bolster bilateral economic ties – technology, connectivity, entrepreneurship, health and tourism. Bangladesh is also important for aiding India’s connectivity in the Southeast Asian region through Chittagong and Mongla ports.

India Bangladesh CEOs

India and Bangladesh are working towards holding the first meeting of the India-Bangladesh CEOs Forum to provide policy-level inputs in various areas of trade and investment and to facilitate exchanges among business communities. Additionally, a bilateral textile industry forum has been set up to facilitate cooperation in the textile sector.

India’s and Bangladesh's electricity grids are interconnected from east and west. A Rs 346 crore pipeline project, signed in 2018, will connect Siliguri in West Bengal in India and Parbatipur in Dinajpur district of Bangladesh. Work on the India-Bangladesh Friendship Pipeline, a project that will enable the two countries to integrate their energy needs, is progressing well and could be inaugurated next year.

Despite Covid-19 restrictions, trade between India and Bangladesh crossed $10 billion. India sent over one crore anti-Covid vaccines to Dhaka and extended concessional credit lines of about $8 billion, the highest for any single country. India is also developing two Indian economic zones at Mirsarai and Mongla.

Prime Minister Narendra Modi’s invitation to 50 young entrepreneurs from Bangladesh will further augment the ties. Over 350 Indian companies are now registered in Bangladesh. The India-Bangladesh CEO Forum will meet soon for the first time, even as the two countries work towards finalizing a CEPA. India stands “shoulder to shoulder” with Bangladeshi leadership and people in their development journey.

Better connectivity

Improving connectivity is imperative for expanding and realizing the potential for bilateral trade and investments. The two countries’ leaders have brought Delhi and Dhaka closer and can together bring economic prosperity to South Asia. 

India and Bangladesh have signed an MoU for the construction of a high-speed diesel pipeline from Assam to Parbatipur in Bangladesh, a joint venture between Numaligarh Refinery Ltd and Bangladesh Petroleum Corp. As a sign of goodwill, an initial consignment of 2,200 tonnes of diesel has been transported from Siliguri in West Bengal to Parbatipur.

India-Bangladesh cooperation in the power sector has become an important aspect in bilateral relationships. Bangladesh is currently importing 1,160 MW of power from India. The Joint Working Group (JWG)/Joint Steering Committee (JSC) on power provides an institutional framework to promote bilateral cooperation in the cross-border trade of electricity.

Developmental assistance

Over the past eight years, India has extended three Lines of Credit to Bangladesh amounting to $8 billion for the development of infrastructure in various sectors including roads, railways, shipping and ports. Additionally, India has been providing grant assistance to Bangladesh for various infrastructure projects.

Further, High Impact Community Development Projects (HICDPs) form an important part of India’s developmental assistance to Bangladesh. India has funded 68 HICDPs, including the construction of, academic buildings, cultural centers, skill development and training institutes, student hostels and orphanages in Bangladesh.

(The writer is a Dhaka-based NGO activist and researcher-writer on international relations. The views expressed are personal. He can be contacted at pathikhasan1141@gmail.com)

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