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.
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.