Bangladesh Strength­en­ing Ties

Bi­lat­eral trade be­tween Bangladesh and In­dia could prove fruit­ful, not only for the two coun­tries, but also for the re­gion at large.

Southasia - - CONTENTS - By Raza Khan

The trade re­la­tions be­tween Bangladesh and In­dia can prove fa­vor­able for the South Asian re­gion.

Trade re­la­tions be­tween Bangladesh and In­dia were re­cently in­creased af­ter the two coun­tries de­cided to de­velop the ex­ist­ing land ports and build a num­ber of new ones at their com­mon bor­der for cost-ef­fec­tive means and an ef­fi­cient ex­change of goods. The agree­ment, if it sees the light of day, would be a harbinger of a new era of bi­lat­eral trade and would have whole­some ef­fects on re­gional trade and pol­i­tics be­sides in­creas­ing the in­tra-re­gional South Asian trade man­i­fold.

The agree­ment for en­hanc­ing the vol­ume of trade be­tween Bangladesh and In­dia was ar­rived at in a meet­ing of the Joint Work­ing Group of both coun­tries in June this year. Ac­cord­ing to the agree­ment, trad­ing in­fra­struc­ture in the shape of land ports and roads would be de­vel­oped and built. In this con­nec­tion Bangladesh would build four new land ports to fa­cil­i­tate trade ship­ments to and from In­dia. Th­ese new land ports would be built at Jiban­na­gar in Kush­tia, Me­herpur, Chi­la­hati in Nil­phamari and Teghamuk in Chit­tagong Hill Tracts.

In­dia would spend Rs4.67 bil­lion to de­velop seven im­port tax sta­tions at dif­fer­ent bor­der points at Agar­tala, Pe­trapole, Dhoki, and Sa­mas­tipur. The ac­tual plan is to up­grade the ex­ist­ing land cus­tom sta­tions to in­te­grate check posts with both cus­tom and im­mi­gra-

tion fa­cil­i­ties. In or­der to make the agree­ment prac­ti­ca­ble the two sides have also set time­lines for de­vel­op­ing and rais­ing the trad­ing in­fra­struc­ture. The in­fra­struc­ture would be de­vel­oped within 150 feet of bor­der ar­eas which is a sig­nif­i­cant de­vel­op­ment in it­self, for Delhi had ear­lier put a ban on the con­struc­tion of in­fra­struc­ture, what­so­ever, in the 150 feet of bor­der ar­eas for se­cu­rity con­sid­er­a­tions.

Most of the bi­lat­eral trade be­tween Bangladesh and In­dia takes place through land ports. De­spite their con­ti­gu­ity both the coun­tries could not sig­nif­i­cantly im­prove mu­tual trade for var­i­ous rea­sons. The most im­por­tant causes of in­signif­i­cant trade be­tween the two key South Asian coun­tries are poor in­fra­struc­ture at land ports and po­lit­i­cal ten­sions. Now when both coun­tries have vowed to im­prove and build land port in­fra­struc­ture, a key ob­sta­cle in the en­hanc­ing of trad­ing vol­ume would be re­moved. How­ever, much would de­pend on the fi­nan­cial, tech­no­log­i­cal and hu­man ca­pac­ity of Bangladesh. Al­ready out of the to­tal 18 land ports which Bangladesh has had, only half are fully op­er­a­tional. Re­al­is­ti­cally speak­ing the Bangladeshi govern­ment could im­ple­ment its part of the agree­ment with In­dia if it in­volves the coun­try’s pri­vate sec­tor in de­vel­op­ing and rais­ing the in­fra­struc­ture.

If Bangladesh and In­dia are able to de­velop the whole range of in­fra­struc­ture en­vis­aged in their re­cent agree­ment, a new era of in­dus­tri­al­iza­tion in the shape of fac­to­ries and mills in the en­tire bor­der re­gion is ex­pected thus cre­at­ing a lot of em­ploy­ment op­por­tu­ni­ties. The de­vel­op­ment of trad­ing in­fra­struc­ture in the bor­der re­gions of Bangladesh and In­dia and the an­tic­i­pated in­crease in the trade vol­ume would be mu­tu­ally ben­e­fi­cial, how­ever, Delhi would gain a stronger ad­van­tage out of it. In­dia has a boom­ing econ­omy and re­sul­tant colos­sal in­dus­trial out­put. The im­proved trad­ing in­fra­struc­ture over land would re­sult in a man­i­fold in­crease in In­dian goods land­ing at the Bangladeshi mar­kets.

From an In­dian point of view, good neigh­borly ties with Bangladesh have been of crit­i­cal im­por­tance. Af­ter the

If Bangladesh and In­dia are able to de­velop the whole range of in­fra­struc­ture en­vis­aged in their re­cent agree­ment, a new era of in­dus­tri­al­iza­tion in the shape of fac­to­ries and mills in the en­tire bor­der re­gion is ex­pected thus cre­at­ing a lot of em­ploy­ment op­por­tu­ni­ties.

two re­gional ri­val pow­ers—Pak­istan and In­dia—Bangladesh is the largest coun­try in South Asia. Thus hav­ing Bangladesh on its side has been the de­sire of both Pak­istan and In­dia. But due to the bit­ter past and his­tor­i­cal is­sues be­tween Bangladesh and Pak­istan and the role, which the In­dian mil­i­tary played in Bangladesh’s in­de­pen­dence from main­land Pak­istan, Dhaka has tilted to­wards In­dia. Against this back­drop, In­dia’s har­bor­ing of Bangladesh through en­hanced trade is one of Delhi’s for­eign pol­icy aims. Al­though In­dia’s para­mount ob­jec­tive in agree­ing with Bangladesh to build and de­velop land ports in­fra­struc­ture is eco­nomic, in or­der to sus­tain its ex­cel­lent eco­nomic growth rate in re­cent years, Delhi has had to ex­plore new av­enues for ex­ports. South Asia, where In­dia is by far the dom­i­nant po­lit­i­cal and eco­nomic power, is the most suit­able and cost-ef­fec­tive av­enue for In­dian goods. Bangladesh with a sta­ble econ­omy and a ris­ing mid­dle class is the nat­u­ral des­ti­na­tion for In­dian traders.

For Bangladesh, forg­ing po­lit­i­cal and trad­ing ties with In­dia is ex­tremely im­por­tant. Bangladesh has been peren­ni­ally struck by po­lit­i­cal tur­moil, with sev­eral mil­i­tary in­ter­ven­tions. For an elected govern­ment, the big­gest guar­an­tee of sta­bil­ity and keep­ing the mil­i­tary and even ju­di­cial in­ter­ven­tion at bay is a vi­able econ­omy. This very rea­son seems to be the big­gest mo­ti­va­tion for Hasina’s govern­ment that en­deav­ors to en­hance trade ties with In­dia.

En­hanced trad­ing ties be­tween Bangladesh and In­dia would not only be mu­tu­ally ben­e­fi­cial but would also in­crease the vol­ume of in­tra-re­gional South Asian trade sig­nif­i­cantly. Trad­ing ties be­tween and among states re­sult in mu­tual de­pen­dency which leads to re­duc­ing po­lit­i­cal dis­putes and the same would re­sult in re­solv­ing or re­duc­ing the in­ten­sity of dis­putes be­tween In­dia and Bangladesh, where dis­putes over wa­ter re­sources reign supreme. See­ing Bangladesh and In­dia en­hance trade ties and reap mu­tual ben­e­fits would mo­ti­vate other South Asian coun­tries to pri­or­i­tize im­prov­ing trad­ing ties with their re­spec­tive neigh­bors. Raza Khan is a po­lit­i­cal an­a­lyst and re­searcher on the po­lit­i­cal econ­omy and the AF-PAK re­gion. He has served in sev­eral se­nior po­si­tions in the Pak­istan govern­ment and is cur­rently writ­ing his doc­toral the­sis on re­li­gious ex­trem­ism-ter­ror­ism in Pak­istan.

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