India and Bangladesh to initiate discussions on comprehensive economic relations.

More on the news:

  • Prime Minister Sheikh Hasina arrived in India on a two-day visit. It is the first state visit by a foreign leader since Prime Minister Narendra Modi took charge for the third term.
  • It is her second visit to India within 10 days. She had attended the swearing-in ceremony of Mr Modi on June 9.

Key Highlights

  • Agreement on Economic Partnership: India and Bangladesh have agreed to initiate discussions  on a Comprehensive Economic Partnership Agreement (CEPA) to enhance their economic ties.
  • Connectivity and Energy Cooperation: India highlighted the focus on improving connectivity and energy cooperation, noting that trade between the two countries is now being conducted in Indian Rupees.
    The launch of the sixth India-Bangladesh cross-border rail link between Akhaura and Agartala and new cargo facilities for India’s northeastern states through the Khulna-Mongla Port.
    Both countries signed multiple MoUs (Memorandum of understanding) covering various areas, including maritime cooperation, rail connectivity, oceanography etc.
  • New Diplomatic Office in Rangpur: India announced the opening of an Assistant High Commission in Rangpur, located strategically between West Bengal and Assam.
  • Teesta River Conservation: A technical team from India would visit Bangladesh to discuss the conservation and management of the Teesta River, a project that has garnered interest from both India and China.
  • Introduction of E-Medical Visas: Introduction of e-medical visas to address the high demand for medical treatment in Indian hospitals from Bangladeshi citizens, aiming to reduce visa processing delays.
  • Other Discussion: The Rohingya crisis was also a significant topic of discussion, given the large number of refugees in Bangladesh from Myanmar’s Rakhine province.

About the India-Bangladesh Relations

Historical Underpinnings:

  • Shared Legacy: Deep-rooted cultural and linguistic ties originating from a common historical past of undivided India.
  • 1971 Liberation War: India’s support for Bangladesh’s independence laid a strong foundation.

Strategic Importance:

  • Neighbourhood First Policy: Bangladesh is crucial for India’s Act East Policy and regional security.
  • Connectivity: Bangladesh serves as a gateway to Southeast Asia, promoting regional trade.

Economic Interdependence:

  • Trade: Bilateral trade flourishes with duty-free access for Bangladeshi goods (SAFTA). In Financial year 2022-23, the total bilateral trade amounted to $15.9 billion, with a surplus in India’s favour,
  • Development Assistance: India has extended 4 Lines of Credits (LOC) to Bangladesh in the last 8 years amounting to around $ 8 billion for development of infrastructure in various sectors including roads, railways, shipping and ports.

Challenges in the India-Bangladesh Relations:

  • Water Sharing Disputes: Unresolved issues regarding Teesta River and other common water resources.
  • Border Demarcation: Outstanding land and maritime border disputes create friction.
  • Immigrant Issue: Illegal immigration from Bangladesh to India is a complex and sensitive issue that strains relations between the two countries
  • Non-Tariff Barriers: Trade imbalances and Indian restrictions can hinder Bangladeshi exports.
  • Infrastructure Bottlenecks: Lack of robust infrastructure limits smooth economic exchange.
  • Balancing Act: Bangladesh’s growing ties with China necessitate a nuanced Indian approach.

Way Forward:

  • Dialogue and Cooperation: Addressing challenges through open communication and collaborative efforts.
  • Strengthening Economic Partnership: Expedite negotiations on CEPA to boost trade and investment. Expand duty-free goods under SAFTA and encourage joint ventures.
  • Enhancing Connectivity and Energy Cooperation: Complete rail links and port projects; develop transport corridors. Explore renewable energy projects and strengthen grid connectivity.
  • Addressing Shared Challenges: Resolve water disputes with joint committees and sustainable practices. Enhance security cooperation and border infrastructure and collaborate on humanitarian assistance and sustainable solutions.

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