Bangladesh’s PM Sheikh Hasina’s visit to India and her meeting with Indian Prime Minister Narendra Modi has given the much needed fillip to the bilateral foreign economic policy. India reiterated its binding commitment to support the economic development of Bangladesh.
PM Sheikh Hasina’s visit | Highlights
PM Modi reiterated India’s willingness to partner Bangladesh in its endeavour to develop sectors like energy, infrastructure, science and technology, e-governance and other emerging high technology areas. Towards this, India committed a third line of credit of US$ 4.5 billion for development of a number of projects in the areas of port construction, railways, roads, airports, power and energy, telecommunications and shipping. This is in addition to the US $2.86 billion worth lines of credit provided to Bangladesh earlier to augment its capacities in key infrastructural sectors and the fully funded grants-in-aid which India has extended to various public welfare projects.
PM Sheikh Hasina’s visit | Cooperation in energy supply
One of the priority sectors identified was to integrate the power and energy supply networks of both the countries and the two leaders agreed to promote joint ventures in the field of energy. It was decided to explore the possibility of gas grid interconnectivity and build an LPG pipeline that will serve the needs of Bangladesh as well as the North Eastern Region of India. The Indo-Bangla Friendship Pipeline from Siliguri to Parbatipur for supply of High Speed Diesel to Bangladesh is being supported by India as a grant-in-aid project.
PM Sheikh Hasina’s visit | Fostering connectivity
To foster connectivity along the waterways, both countries have decided to operationalize the Coastal Shipping Agreement signed in June 2015, commence trans-shipment of goods through the Ashuganj River Port under the Protocol on Inland Water Transit and Trade (PIWTT) and a MoU on passenger and cruise vessels was inked. The MoU on Development of Fairway from Sirajganj to Daikhowa and Ashuganj to Zakiganj on Indo-Bangladesh Protocol will help reduce logistics cost of cargo movement to northeast India and also reduce congestion through Siliguri’s ‘chicken’s neck’ corridor. The trial run of passenger train between Khulna and Kolkata and the new bus service between Kolkata-Khulna-Dhaka would further people-to-people contacts. These connectivity initiatives apart from providing development dividends, would feed into the new paradigm for sub-regional cooperation.
To further people-to-people contact, it was agreed to revise and revamp the Memorandum of Understanding on Border ‘Haats’ (markets – remember this for Prelims). During the visit of the Bangladesh Prime Minister, the Indian private sector pledged investments of over US$ 9 billion in Bangladesh.
PM Sheikh Hasina’s visit | Participation in multilateral initiatives
Both countries actively encourage these initiatives under the South Asia Sub-Regional Economic Cooperation (SASEC), Bangladesh Bhutan India and Nepal and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). The various transit and connectivity agreements shall facilitate movement of goods from different parts of India to the North-East through Bangladesh and drastically cut down upon the time and costs for such transportation.
PM Sheikh Hasina’s visit | Economic cooperation
Although the current levels of bilateral trade stands at close to USD 6.7 billion, there is potential for massive growth. Both countries have decided to boost trade and ease doing business by removing a gamut of non and para tariff barriers including port restrictions and upgrade the infrastructure of the Land Customs Stations and Integrated Check Posts.
Trade and industry along both sides of the border has evinced interest on the bilateral economic relations. This could lead to joint ventures in niche areas like exploration of hydrocarbons, marine resources and deep sea fishing in the Bay of Bengal. The Indian Prime Minister is of the opinion that Bangladesh should also develop along with India. He shares the same dream for Bangladesh as he has for India.
PM Sheikh Hasina’s visit | Conclusion
Shared economic prosperity and connectivity are the two dominant themes poised to take Indo-Bangladesh bilateral economic relations to a new high. This also holds the promise of accelerating regional and sub-regional economic growth and usher in far reaching welfare benefits for both neighbours. An all-encompassing partnership is a must to accelerate bilateral economic growth. This was succinctly reflected in the joint statement issued during the summit level meeting which labelled the Indo-Bangladesh relations as one of ‘fraternal friendship’ geared to promote regional connectivity and development.
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