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India and Bangladesh: Needs diversification at economic level

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India and Bangladesh have long shared a warm relationship. Bangladesh shares a 4,095 (4,096) km international border with five Indian states of West Bengal, Tripura, Assam, Meghalaya and Mizoram. The two countries share 4,095-km-long border of which Tripura shares 856-km border, West Bengal 2,216 km, Meghalaya 443 km, Mizoram 318 km and Assam 262 km.

The two neighbours share 2,979 km of land border and 1,116 km of riverine boundary and also share 54 rivers, including eight rivers flowing from Tripura. A large portion of the India-Bangladesh border is now fenced with barbed wire. A large portion of the India-Bangladesh border remains unfenced, porous, mountainous and riverine. India is attaching greater importance to its ties with Bangladesh as a strategically and economically key element in the furtherance of its “Look East” policy. It also believes Bangladesh can become a hub for its Northeast region. India intends to help develop ports, waterways and alternate roadways to boost trade and investment.

The sharing of waters in the common Teesta River and the Land Boundary Agreement are the two major outstanding issues in the bilateral ties while a proposed treaty over the river was postponed on the last minute in 2011 when former Indian Prime Minister Manmohan Singh visited Dhaka due to opposition from West Bengal Chief Minister Mamata Banerjee. The two countries, however, signed a landmark Land Boundary Agreement in the same year but it still awaits the endorsement in Indian parliament.

 

CII has suggested addressing non-tariff barriers (NTBs) such as harmonisation and classification issues and non-recognition of Technical Standards to enhance trade, beside alleviation of infrastructure bottlenecks related to power, ports, energy, and telecommunication. Improving the investment climate by developing single window clearance for new business proposals; repatriation of profits; setting up an Industrial Park for India in Bangladesh outside Export Processing Zone (EPZ) with all the needed infrastructure facilities; among other things will further strengthen the India-Bangladesh economic partnership.

Positive Aspects

  1. Indian and Bangladeshi security forces are planning to carry out simultaneous raids against Islamist militants along the porous border and the two countries have exchanged lists of terror operatives active on both sides of the frontier. National Investigation Agency (NIA) wrapped up a four-day visit to Bangladesh as part of probe into recent Burdwan blast, allegedly carried out by Jama’atul Mujahideen Bangladesh (JMB) militants. NIA and Bangladesh’s elite anti-crime Rapid Action Battalion (RAB) exchanged lists of JMB operatives and Islamist militants believed to be hiding in the two countries.
  2. Both sides are working on several projects to improve trade infrastructure and connectivity. Border Management is developing 7 Integrated Check Posts (ICPs) on India – Bangladesh Border viz; Petrapole, Agartala, Dawki, Hili, Chandrabangha, Sutarkhandi and Kawarpuchiah. Both the countries in principle have accepted the need for opening up of more such border haats along the 4096 km border they share. Target is to increase the border trade to Rs 500 crores by 2016 to 2017 and it is quite possible with coming up of new industries from Bangladesh.
  3. Exports from Bangladesh to India have risen significantly since 2010 when New Delhi took products from Dhaka off of its negative list. Bilateral trade between India and Bangladesh stood at USD 6.6 billion in 2013-14 with India’s exports at USD 6.1 billion and imports from Bangladesh at USD 462 million, representing more than double the value of USD 2.7 billion five years ago. Bilateral trade between India and Bangladesh could almost double to USD 10 billion by 2018, provided trading irritants like non-tariff barriers and infrastructure related-issues are resolved.
  4. India and Bangladesh are expected to sign an agreement to enhance bilateral cooperation between the two countries in the areas of traditional medicine and homoeopathy very shortly. The MoU will provide a structured frame work for cooperation between the two countries for the promotion of Indian traditional systems of medicine and homeopathy in Bangladesh.
  5. Bangladesh government has announced to create ‘Special Economic Zone’ (SEZ) for the Indian investors as the bilateral relations between the two countries have improved remarkably.

Distressing trends:

  1. West Bengal’s porous 2,200-km border with Bangladesh makes it a convenient passage point into India for militants associated with several organisations. Not just this, it has also emerged as a major channel for the smuggling of fake Indian currency notes (FICN). Both countries need to evolve concrete steps to check such dangerous activities. The CPI-M has sought a central government probe into allegations that the Saradha Group scam money was channelised to Bangladesh to fund terror acts against India.
  2. According to one report, officers investigating the Burdwan blast found several consignments of bombs were moved from Bengal to Bangladesh to destabilise the government there in the last two years. A breakaway faction of the Indian HuJI-SIMI-LeT network that sheltered terrorist mastermind Abdul Karim Tunda was aiding the Jammat-ul-Mujaihideen Bangladesh module in Bengal, say central intelligence sources. What’s more scary, the aim was not only to smuggle IEDs to Bangladesh, but also in India.
  3. The arrest of Myanmar national Khalid Mohammad in connection with the Burdwan blast has raised major security concerns. Khalid's arrest links the Rohingya Muslim militancy in Myanmar with Pakistan-based Lashkar-e-Toiba (LeT) and Jamat-ul-Mujahideen Bangladesh (JMB). The arrest of another operative from Bangladesh's Cox Bazaar revealed Rohingya militants transferred funds to Bangladesh from Karachi for these activities.

Potential and prospects

  1. India’s North-East, Bangladesh and Myanmar should think of creating a tourist circuit that will help in popularising historical places. Now Indian relation with neighbouring Bangladesh is very cordial. With the given situation, we need to boost tourism between our north eastern region and Bangladesh. The people of the two countries have lingual and cultural affinity.
  2. India has asked Bangladesh to open direct sea routes to boost bilateral trade, hampered by congestion at the land customs stations. At present, goods shipped from the two are sent through the ports of Singapore or Colombo, very expensive. As a result, the cargoes turn to Petrapole-Benapole land customs stations. Because of this, both the border posts face massive congestion. The logjam at the Petrapole and Benapole (Bangladesh side) has emerged to be one of the biggest trade barriers. These handle half the bilateral trade. There is not enough cargo moving between Chittagong (Bangladesh) and Kolkata, so it is not profitable for a big vessel to ply. The charges for Paradip port are very high so it is much better to run it through the Colombo port.
  3. The Tripura government has proposed Indian Prime Minister Narendra Modi to persuade Bangladesh to provide access to its water and land routes to transport men and goods for India’s north-eastern states. Chittagong and Ashuganj ports are around 70 and 40 km from Tripura respectively.
  4. Enhanced cooperation between India and Bangladesh on trade in rice seeds would help farmers of both the sides increase the yield of the commodity. Sourcing of seeds is through unregistered traders and middlemen. Informally traded seeds are often found to be of low quality, impacting rice yields. There is also lack of formal trade and knowledge sharing between the two countries are further impacting the farmers of both the sides.
  5. Bangladesh might restore the abandoned railway connectivity that existed before the partition of India to boost trade and people-to-people contact. With the help of Indian investment preliminary works have started to lay a 15-km railway track to link Tripura’s capital Agartala with Bangladesh’s (south-eastern city) Akhaurah. Of the 15-km line, 5 km of tracks fall in India and the rest in Bangladesh. The Agartala station came up on the country’s rail map in October 2008. The projects include Dhaka-Tongi and Khulna-Mongla railway line extension and manufacturing of 120 coaches for Bangladesh railways.
  6. India would develop a river port in Bangladesh to ferry essentials, foodgrain and heavy machinery to northeast region from different parts of the country and abroad. India has taken the first steps to construct an Rs.70 crore ($11.5 million) bridge over the Feni River in Tripura to access Bangladeshi ports for transporting goods and heavy machinery from other parts of the country to the landlocked northeast and to boost trade and tourism.
  7. An economic corridor comprising Bangladesh, China, India and Myanmar (BCIM) will benefit the region’s economy and help resolve contentious issues of these countries with neighbours. India should agree to open the BCIM highway starting from Kolkata and passing through Bangladesh and Northeast Indian states of Assam and Manipur.