The Assam Chronicle

News and Views from Northeast India

'Deepen Ties with North East'

India-Bangladesh Chamber of Commerce and Industry (IBCCI) and Indian Chamber of Commerce (ICC), Kolkata, jointly organised an India- Bangladesh Business Conclave titled “A New Phase in Bilateral Economic Relations” in Dhaka on August 23-24 with the support of Indian High Commission there. In addition to policy makers and government officials, bankers, economists, business and industry leaders of both the countries attended the conclave. The 31-member Indian delegation led by DoNER Minister General (retd) V K Singh included Meghalaya Chief Minister Mukul Sangma, Tripura Minister of Industries and Commerce Tapan Chakraborty, Meghalaya Parliamentary Secretary Kennedy Khyriem, Indian High Commissioner to Bangladesh Pankaj Sharan, President and Director General of ICC Rajeev Singh, ICC, Kolkata, President Roopen Roy and others. Bangladesh also invited Sikkim Chief Minister Pawan Chamling to attend the conclave as an honoured guest. From the Bangladesh side, Minister for Planning AHM Mostafa Kamal, Economic Advisor to Bangladesh Prime Minister Dr Mashiur Rahman, former foreign minister Dipu Moni, Lead Economist World Bank Salman Zaidi, noted Bangladeshi economist Prof Mustafizur Rahman and Transport Specialist Asian Development Bank Nazrul Islam participated in the two-day conclave.

The delegates discussed ways of further strengthening connectivity and trade ties between the two neighbours. The conclave attached priorities to issues concerning Bangladesh’s trade ties with North Eastern states and Bengal. The government officials, experts and business leaders of Bangladesh and India discussed the challenges and opportunities of connectivity between Bangladesh and North Eastern states and the possible ways of improving infrastructure at land ports, removing non-tariff barriers and increasing investment to enhance bilateral trade between the two countries.

Bangladeshi business leaders and economists demanded that New Delhi should do away with non-tariff and para-tariff barriers to help Dhaka in increasing its exports to India for minimising the trade imbalance between the two nations. They identified a number of impediments including testing and certification, packaging and levelling issues that stood in the way of doing business with India. They maintained that in most cases, India does not recognise certification of Bangladesh Standard and Testing Institution (BSTI) which is hampering exports to the country. President of Federation of Bangladesh Chamber of Commerce and Industry Kazi Akram Uddin said, despite duty-free and quota-free facility for Bangladeshi products, the exporters can not easily penetrate the Indian market due to these problems. Prof Mustafizur Rahman, Executive Director of Dhaka’s think tank, Centre for Policy Dialogue also mentioned that non-recognition of BSTI’s certificate in India is a “great barrier” to bilateral trade. He argued that economic interests of the two neighbouring nations should not be hostage of political boundary.

The Indian side tried to convey the message that New Delhi is keen on forging ties with Bangladesh with special focus on expansion of business with North East because of geographical contiguity. DoNER Minister Singh said at the conclave that there is endless scope for expanding Bangladesh’s trade with seven states and the Union government would provide all possible support to explore the opportunities. He reiterated India’s commitment to ensure prospects of neighbouring countries as it believes that New Delhi’s prosperity lies in neighbour’s prosperity. General (retd.) Singh, who fought Bangladesh’s Liberation War in 1971 along side the Bengali freedom fighters, urged Bangladeshi entrepreneurs to explore his government’s neighbourhood policy for mutual benefit. He said, “Today we have a climate, we have the political will to ensure that things progress in a manner which will be for the benefit of the peoples of both the countries”. Singh said his government had decided that North East must develop in terms of infrastructure which means rail, road and air connectivity and connectivity with neighbouring countries.

The minister noted that despite getting duty-free access in Indian market, Bangladeshi exporters could not fully exploit the opportunity as they failed to “understand the Indian market”. He said Bangladesh has a booming garment industry. Emphasising the scope of cooperation in the garment sector, he said, “If the strength of the two markets combine, no body can beat us….To do so, we need business linkages of both countries and making use of each other’s strength so that we can benefit mutually out of it”. ICC President Rajeev Singh issued a statement saying that Bangladesh with its natural resources has enough potential to broaden trade ties with Bengal and North East India. The statement has listed commodities having “comparative trade advantage” including coal, limestone, stone chips, bamboo, cement, palm oil, wheat, sugar, readymade garments, processed food and drinks.

Meghalaya Chief Minister Mukul Sangma proposed joint investment with his state given its rich deposit of granite and very high quality of limestone. Sangma invited Bangladesh for making joint investments in hydropower projects and agro-forest sector in Meghalaya. He said Meghalaya has huge potentials in hydro-electricity and Bangladesh could get electricity through investment. He also suggested organising a separate conclave focusing on tourism as Meghalaya is well known for tourist spots—at the door step of Bangladesh.

Indian High Commissioner Pankaj Sharan urged Bangladesh’s entrepreneurs to be proactive. He suggested organising road shows, sending business delegation to different Indian states to understand the markets and create linkages with businessmen. ICC, Kolkata, President Roopen Roy also emphasised the need to expand economic and commercial relations between the two neighbouring countries. He said, “We want to revive our historic relationship”. Furthermore, the conclave saw business-to-business (B2B) meetings between Indian and Bangladeshi investors and entrepreneurs.

India is the biggest trading partner of Bangladesh. Following New Delhi’s decision in November 2011 to allow duty-free and quota-free access for Bangladeshi items, Dhaka’s exports to India registered an upward trend. In the last fiscal, Bangladesh’s $563.9 million exports to India were highest ever against India’s exports of over $4.5 billion. Currently, Bangladesh is India’s largest trading partner among the SAARC member nations. According to IBCCI, Indian investment stood at $2.5 billion in 2013-14. A recent study notes that India’s exports to Bangladesh have witnessed a growth of over 9% annually since the 1990s while Bangladesh exports to India have grown at a low 3% annual rate. The trade deficit between the two countries has been persisting over the years despite taking several corrective measures. In its efforts to reduce trade imbalance, Bangladesh submitted a list of 61 more items for duty-free access to Indian market during the business conclave.

On August 23, the Indian delegation led by DoNER Minister met Bangladesh Prime Minister Sheikh Hasina on the sidelines of the conclave and submitted seven proposals for connectivity, including access to Chittagong port. During her talks with the visiting Indian minister Singh, Hasina reiterated Bangladesh’s primary demand to sign the much-awaited Teesta water sharing agreement. Prime Minister’s Press Secretary AKM Shameem Choudhury quoted her as saying Singh, “Teesta water sharing deal should be inked as soon as possible as Bangladesh needs more water in the lean period”. The other major demand of Bangladesh, ratification of Land Boundary Agreement too figured in the bilateral discussions. Hasina also urged India to provide transit to Bangladesh with Nepal and Bhutan through Indian territory. She reported to have told Singh, “We also want transit from you, as we are already providing that facilities to you”.

The Indian minister reassured Dhaka of providing the transit facility and added that a railway line should be built along the existing road that connects Bangladesh with Nepal and Bhutan. Singh said, “We want to create an environment for increasing trade and investment between North Eastern states of India and Bangladesh”. He noted that the existing “border haats” have expanded people-to-people contacts between the two countries to a considerable extent. He also met Bangladesh Foreign Minister AH Mahmood Ali and stressed on further widening and deepening of relationship between the two nations, especially between North East and Bangladesh. The other key issues covered in the bilateral talks were cooperation in the energy sector, Teesta water sharing agreement, the proposed Agartala to Kolkata via Bangladesh bus service and the use of Chittagong port for Indian goods.

Following the formation of NDA government at the Centre, India has been consistently engaged with Bangladesh. Singh is the second Indian minister to visit Dhaka since the tour of External Affairs Minister Sushma Swaraj in June. Singh said that Prime Minister Narendra Modi is also keen to visit Bangladesh in future. The Home Secretaries of both the countries are scheduled to meet in Dhaka on September 2-4. During her visit, Swaraj assured the Bangladesh side that the Modi government was trying to reach an “internal consensus” in India on the Teesta deal. The Teesta water is important for Bangladesh, particularly in the leanest period from December to March when the flow of water often comes down to less than 1000 cusec from 5000 cusec every year as one report says.

Another North Eastern state, Tripura will be largely benefited from improved trade ties and connectivity with neighbouring Bangladesh. This small state is surrounded by Bangladesh from three sides. The Manik Sarkar government which enjoys a warm relationship with the Awami League regime of Sheikh Hasina has been seeking transit facilities through Bangladesh and access to Chittagong port. After meeting Hasina, Tripura Minister said the Bangladesh government has decided to allow its neighbours to use both Chittagong and Ashuganj sea ports to strengthen economic integration among South Asian countries. The minister stated, “She told me that Bangladesh has already taken a policy decision to allow its neighbouring countries to use its sea ports for multi-modal transit, but now it is waiting for development of infrastructure in dealing with consignments”.

It may be noted that the Indian government is providing financial and technical assistance for the construction of a bridge on the Feni river, building a 70-km road from Sabroom in South Tripura district to Chittagong port and laying railway tracks between Agartala and Akhaura. The minister observed, “After the completion of the bridge, the distance between Chittagong port and Sabroom would be reduced to just 75 km and then Tripura would become gateway to the North East”. The minister also urged the Bangladesh prime minister to expedite survey works on the Bangladesh side for laying tracks to connect Akhaura and Agartala. Besides, he requested Bangladeshi leaders to open more “border haats” to enhance trade ties, construct a warehouse at Ashuganj port to facilitate transhipment of goods to India and develop the connecting road of Akhaura-Viswa Road in Bangladesh.

Economic Advisor to Bangladesh Prime Minister Dr Mashiur Rahman maintained that both the countries should institutionalise the existing river and road transit facilities between them as a “multi-modal” one. He suggested that a new warehouse should be built in the Chittagong port to handle export and import of Indian goods through port. Dhaka on its part has taken some initiatives for reaching out to India’s North East. The Hasina government has already sought New Delhi’s permission to open its Deputy High Commission in Guwahati and upgrade Agartala Visa Office to an Assistant High Commission to boost diplomatic and commercial presence in the North East.