Prime Minister Narendra Modi’s successful two-day visit to Dhaka last week saw the signing of a slew of 22 agreements covering the entire gamut of political, economic and cultural relations. Among these agreements, five issues that are part of the 60-point Memorandum of Understanding (MoU) stand out and promise an era of greater cooperative relationship, best reflected in the title of the joint declaration – Notun Projonmo-Nayi Disha (New Beginning-New Direction). These agreements are related to connectivity – a priority area for the Narendra Modi Government – and include grid interconnection and generation of power, improving the balance of trade, better coordination among the border guarding forces and people- to- people contact. While the first two issues are to be advanced within a sub-regional framework, other issues are exclusively bilateral in nature.
Addressing Five Key Issues
For the first time since the 1965 War led to the severing of cross-border connectivity between India and the then East Pakistan, steps have been taken to restore it. After the liberation of Bangladesh, the two countries had signed agreements to restore connectivity but a change of regime in Dhaka after the 1975 coup put paid to that effort. Though both countries periodically renewed the Inland Water Transit and Trade Protocol, the issue of road and rail connectivity remained mired in the debate within Bangladesh whether providing transit rights to India would constitute a ‘security threat’ and a breach of sovereignty. Taking Dhaka’s sensitivities into consideration, the term ‘transit’ was replaced with ‘transhipment’ in 1997. Connectivity within a regional framework has since become the new buzzword. In this context, the Bangladesh, Bhutan, India and Nepal (BBIN) sub-regional framework assumes importance and was rightly emphasised by Modi during his Dhaka visit.
The announcement of a second line of credit worth USD 2 billion, to be used particularly for developing public transport, roads, railways, inland waterways and ports, apart from education and health, is significant. It needs to be mentioned here that the earlier line of credit of $863 million and $200 million in grant was mostly used by Dhaka to improve rail connectivity. Bangladesh has now offered India the use of the Chinese built Chittagong port as well as the Mongla port for trade purposes. Such a facility has already been extended by Bangladesh to Nepal and Bhutan. The BBIN countries are exploring potential road, rail and bus routes using multimodal transport to meet their commercial as well as tourism needs. While the BBIN countries would be meeting this month in Dhaka to sign a multimodal transport agreement, India and Bangladesh are commencing negotiation on a bilateral framework and a Joint Task Force has been proposed in this regard. India has agreed to provide transit to Bangladesh for conducting trade with Nepal and Bhutan.
The second significant issue covered in the MoU is power generation and electricity trade. Both countries have already taken several steps to further bilateral cooperation in this field since former Prime Minister Manmohan Singh’s visit to Dhaka in September 2011. Agreements exist between the Power Grid Corporation of India Ltd. and Power Grid Company of Bangladesh, as does a 400 KV line linking Baharampur in India to Bheramara in Bangladesh with a load capacity of 500 MW. Bangladesh is already receiving 500 MW of electricity. Modi has promised to increase it to 1000 MW using this transmission line. An additional 100 MW is due from the Palatana project in Tripura. It is also worth noting here that earlier, in 2010, the National Thermal Power Company (NTPC) and Bangladesh Power Development Board (BPDB) had signed a MoU to set up a 1320 MW (2×660 MW) coal- based power project in Rampal in the Sunderban area. This project is being implemented by Bangladesh-India Friendship Power Company Private Ltd., a 50:50 Joint Venture owned by the NTPC and BPDB.
What is significant this time around is that private companies have been brought on board to invest capital. Deals worth $5.5 billion were inked between BPDB and Indian companies Adani Power Limited and Reliance Group. Adani Power Limited is planning to invest $2.5 billion in a coal-based power plant with a capacity to generate 1,600 MW power. Reliance Group has signed a $3 billion deal to set up an imported Liquefied Natural Gas-based power plant in Bangladesh with a capacity to generate 3,000 MW power. All these efforts would help fulfil the Sheikh Hasina Government’s 2021 goal of achieving an installed capacity of 24,000 MW power. There is a proposal to connect the grid on the western side of Bangladesh. There is also a consensus to evacuate power from the North- eastern region connecting Rangia/Rowta to Muzaffarnagar in India by constructing bi-pole DC grind line with suitable tapping points in Barapukuria in Bangladesh. Within the BBIN framework , the two countries have decided to discuss grid security, transmission, interconnection and applicable domestic laws in different countries. Already, Bhutan has shown willingness to export power to Bangladesh. For their part, India and Bangladesh have decided to initiate an annual energy dialogue and enhance the already existing cooperation on nuclear and renewable energy.
The third major issue – balance of trade – has been a major bone of contention between the two countries in the past. Lately, many in Bangladesh recognise that imports from India are helping Bangladesh obtain cheap raw material and use that for competitively exporting high end readymade garments. It needs to be noted that India is providing duty free access to all Bangladeshi goods except for 25 products that are on a restricted list which constitute alcoholic items. Many attribute the lopsided trade to the lack of a level playing field to Bangladeshi manufacturers due to several non- tariff barriers (NTBs) imposed by India. However, India in the recent past has taken steps to facilitate increased bilateral trade. It is helping the Bangladesh Standards and Testing Institution (BSTI) to harmonise the quality control norms. It has also taken steps to test perishable items at the border for early clearance especially of Hilsa fish and fresh fruits. The establishment of state- of- art Land Customs Stations (LCS) at the border and reducing the pressure on Benapole and Akhaura by opening up a new LCS at Phulbari-Banglabandha are going to facilitate easy clearance of goods. However, the roads connecting the LCS need to be improved and decongested in view of the heavy traffic. Both countries have three border haatsthat are functioning and there are proposals to set up a few more in the coming year. The agreement to establish two new Indian Special Economic Zones in Mongla and Bheramara is likely to generate employment, cater to the markets of Bangladesh and India and also contribute to correcting the balance of trade.
The fourth key aspect of the MoU is the effective implementation of a “Coordinated Border Management Plan” that was agreed to earlier. The two sides have agreed to take steps to identify vulnerable areas that are used for criminal activities, irregular movements and smuggling that sometimes have led to loss of life. They have finalised a Standard Operating Procedure, for which a need was felt long ago, to plug the inadequacies that prevent effective management of the border. Coordinated patrols need to be undertaken to make this plan effective. India has agreed to allow the Border Guard Bangladesh (BGB) to use Indian border roads to maintain their Border Out Posts (BOPs). Perhaps, what is most significant is allowing BGB personnel to use Indian medical facilities in difficult areas of the border where no Bangladeshi medical facility is available. This will surely create a better understanding between the two border guarding forces. Bangladesh’s pledge of ‘zero tolerance’ against terrorism and extremism needs to be matched with ‘zero killing in the border ‘ in which the BGB has to play a significant role.
Lastly, the MoU emphasised the significance of people- to- people contact in carrying the relationship forward. Not only two new bus services were flagged off and more bus and train services were agreed upon, India and Bangladesh also announced the opening of new consulates in Sylhet and Khulna for India and in Guwahati for Bangladesh. Bangladesh is planning to upgrade its consulate in Agartala to the Assistant High Commission level. Similarly, since the Dhaka-Kolkata Moitree Express is currently not very popular due to the slow immigration process that unnecessarily delays travel time, India has agreed to construct a modern international passenger terminal to mitigate the grievances of travellers between the two cities.
Taking Ties to a New Level
The high-point of the visit was the exchange of the instrument of ratification of the Land Boundary Agreement (LBA) 41 years after it was signed in June 1972. The jubilation was evident in the enclaves – which were under the notional sovereignty of the two countries – where people celebrated their new identities as citizens with full rights for the first time since 1947. For Bangladeshi intellectuals, the lack of an agreement on Teesta River was a big disappointment, with some attributing it to an Indian conspiracy. But the fact remains that ahead of Modi’s visit, Foreign Minister Sushma Swaraj had clarified that a Teesta deal is not on the cards. For his part, Modi gave the assurance that discussions are in progress among the relevant stakeholders and soon the two countries would reach an understanding on the Teesta and Feni rivers. The presence of the Chief Minister of Paschima Banga at the ceremony that marked the exchange of instruments of ratification of the LBA underlined the important role of state governments in progressing ties with immediate neighbours The Government of Bangladesh also did not hesitate in according due importance to Mamata Banerjee’s visit lest she emerges as a spoiler once again – a lesson well learnt from the 2011 visit of former Prime Minister Manmohan Singh.
On the whole, the Modi visit symbolised the bipartisan consensus among the major political parties in India on enhancing relations with Bangladesh. While heralding a new era in building regional connectivity, the National Democratic Alliance (NDA) government led by Modi has taken what was a warm relationship with Bangladesh under the previous United Progressive Alliance (UPA) government to a new high by sealing the LBA. With settled and demarcated land and maritime boundaries, the two countries are now set for opening a new chapter – Notun Projonmo-Nayi Disha– in their bilateral ties.