India-Bangladesh Economic & Political Relations:
Teesta River Dispute
main obstacle between India and Bangladesh diplomatic relations
Economic diplomacy has played a
significant role in the bilateral relations between India and Bangladesh.The relations between the
two countries have been multifaceted,embracing trade transactions,credit-arrangements,joint-ventures,transit
facilities and transport development.These relations have continued and
expanded even in situations of adverse political relations.Closer economic ties
benefit both countries and have an overall stabilising effect on political
relations between them.On the other hand,economic relations are influenced by
the climate of political relations.According
to one Bangladesh observer based in New Delhi: Indo-Bangladesh relations
are,therefore,likely to hold greater prospects if they are anchored within the
broader framework of political and strategic relationship.India jumped first
position among exporters to Bangladesh,with China being a distant second.India
maintained the first rank until 2005-06 after which it was overtaken by
China.In 2011-12,India’s total exports to Bangladesh reached the level of 5.84
billion dollars.In spite of the impressive performance in the trade front rTecently,the
full potential of economic cooperation between the two countries remains to be realised,periodic
trade review meetings,joint economic commission,joint rivers commission and
inland water trade and transit agreement.Besides,there are several momoranda of
understanding covering cooperation in specific areas
With the new regionalism since
many years,large number of mega trade groupings have come to be established in
different parts of the world.The South Asia.these relations have,by and
large,grown on their own,dictated by the logic of the market forces.Bilateral
trade agreement n countries tentative journey towards a free trade agreement
began towards the end of 1991 with the signing,under the SAARC,of the South
Asian Preferential Trading
Arrangement-SAPTA.The vision of South Asia moving within the next 20 years to
an economic union via a free trade arrangement and customs union.The datelines
for achieving these landmark objectives were fixed and a roadmap was drawn up
for moving from one stage of integration to the higher stage.Bangladesh has
contended over the past several years that high levels of Indian tariffs on
products of exports to India.Because of India’s competitive advantage in
exporting to Bangladesh,India can proceed on the assumption that a substantial
part of an increase in Bangladesh’s earnings from trade with India will be
devoted to imports from the latter.Extension of unilateral free trade
preferences by India is also likely to help in reducing the trade gap between
the two countries which will have a benefical spill-over effect on the
political relations between the two countries.It is very unlikely that if India
establishes a unilateral free trade regime for Bangladesh’s products,there will
be a flooding of exports from Bangladesh to India and thereby a disruption of
the domestic industry in India.This is because of the numerous problems that
Bangladesh faces in mobilsing export supplies,mounting an effective export
promotion drive and over-coming the transport and other infrastructural bottlenecks.India’s proposal for an FTA with
Bangladesh still remains under the latter’s consideration.Bangladesh’s lukewarm
attitude towards an FTA with India could be partly because of its expectations
that under international pressure and its own enlightened self-interest,India
would,in any case,extend duty free access to imports from Bangladesh without
reciprocity.This has in fact come to materialise to a considerable extent as a
result of India’s successive reductions of its negative list under the
SAFTA,which is of interest only to Bangladesh,as the other least developed
countries of South Asia already enjoy duty free access to the Indian market.
An FTA is no panacea for deaking with trade problems,including that of
trade imbalances between the two countries.Besides,designing an FTA between two
countries placed in a highly asymmetrical
economic position as India and Bangladesh are,is by no means going to be
an easy task.At the same time,there are obvious advantages in an FTA which
cannot be ignored and which the extension of unilateral tariff concessions
cannot ensure.An FTA between India and Bangladesh should be part of a wider
arrangement for cooperation in other related areas,management of water
resources,science and technology,energy,environment and natural disastersThe
two prime ministers agreed to put in place a comprehensive framework of
cooperation for development between the
two countries,which would include cooperation in water
resources,power,transportation,tourism and education.Under the framework
agreement on cooperation for development,the two countries can,if and when they
muster the necessary political will,negotiate an FTA or CEPA which,apart from providing for free trade,can include the
measures of deeper integration described above.If and when a CEPA is negotiated
between the two countries,it must include provisions for cooperation for the
optimal utilisation of the waters of the common rivers,including for a more
effective functioning of the joint rivers commission.On the other hand,India
has extended credits to Bangladesh since many years for their economic development.A
major initiative taken by India in this direction was its announcement,during
the Bangladesh Prime minister visit to India years back,of the extension of a
credit of one billion dollars to Bangladesh.It was the single largest amount of
credit extended by India to any country.It has been granted under very soft
terms and conditions with 1.7% rate of interest,20 years of maturity and five
years of grace period.India would develop a huge stake in the railway,roadway
and riverine infrastructures of Bangladesh.An amount of one billion dollars
committed for the development of transport infrastructure in Bangladesh.
During Prime minister Sheikh
Hasina’s visit to India,a number of far reaching measures were announced by
Bangladesh to provide transit facilities through its territory to India,in its
turn,announced that it would assist Bangladesh in the upgradation and expansion
of its transport infrastructure.During
Sheikh Hasina visit,by far the most important decision taken was Bangladesh’s
agreement to allow the use of Mongla and Chittagong ports for movement of goods
to and from India through road and rail.Another important move in the direction
of providing transit facilities to India was Bangladesh’s agreement to the
construction of the proposed Akhaura-Agartala railway link,to be financed by a
grant from India.When the construction of this railway link is completed,at
least passenger journey between Kolkata and Agartala through Bangladesh would
become possible.The two countries decided to designate new ports of call India
would try to provide dredgers to Bangladesh on an urgent basis for facilitating
the movement of cargo along the waterways.It has also agreed to make the
necessary investment for the assessment of the improvement of infrastructure and
the cost of transportation for enhanced use of the waterways.The one Billion line of credit India agreed
to extend to Bangladesh was to be devoted to range of projects,mostly for the
improvement of transport infrastructure including the railway network,supply of
locomotives and pass-anger coaches,rehabilitation of the Saidpur work-shop and
procurement of buses and dredgers.India also agreed to consider Bangladesh’s
request for asistance to construct the road infrastructure in Dhaka,including
flyovers.However,the withdrawal,at the last minute,of the agreement reached
between the two countries on the sharing of the waters of the Teesta and feni
rivers,turned out to be a big setback.In response,the Bangladesh government
postponed the signing of the MoUs for operationalising the transit facilities
granted for India for the passage of its goods from the Chittagong and Mongla
ports and the agreement on the construction of the Akhaura-Agartala railway
link.The prolonged delay on the part of India’s parliament in enacting the
required constitutional amendment in order to implement the land boundary
agreement reached between the two countries on the eve of Indian prime minister
visit to Dhaka,has turned out to be another constraintto giving effect to
the measures already announced by Bangladesh on the transit issues.
Indian external affairs minister Salman Khurshid has conclued his trip to Bangladesh in last
months where he participated in the second India-Bangladesh joint commission
meeting,which ,as expected ,has culminated in a set of agreements within the
ambit of the framework agreement on cooperation for development concluded
during the visit of Indian prime minister Manmohan singh to Dhaka.The backdrop
of Salman trip is very significant,with Bangladesh in the throws of an upsurge
and mass mobilisation of young people demonstrating against the Bangladesh
communalist collaborators of the erstwhile Pakistani regime in an attempt to
suppress the Bangladesh freedom movement.
In the conditions prevailing now
in Bangladesh,India has to play a very cautious role,while new Delhi should
continue its high-level of engagement with the Awami league
government,encompassing cooperation in different spheres including the building
up of bilateral linkages in the realms of infrastructure,water-sharing and its
composite management,mutually accepted norms of border guarding and security
matters,etc,there is a need to promote deep political links and dialogue
involving the mainstream and regional political parties of India those which
have influence in the east and north-east,on one hand and Bangladesh political
parties like the Awami League,BNP and the Jatiya party of General Ershad on the
other.This tier of links will help maintain a favourable orientation towards
India in the political milleu of Bangladesh.In this regard,the agreement to set
up a Bangladesh-India foundation to promote multifaceted exchanges is a step in
the right direction and will help in the neturalising of anti-India sentiments
which periodically bilateral relations.Sources in Bangladesh indicate that the
Sheikh Hasina government is keen to arrive at some in-principle agreement on
Teesata water sharing with India by this year before the Bangladesh national
elections.This may be feasible,provided Mamata On the Banerjee and her
government is handled very sensitively at a discreet political level,which
Salman Khurshid may be capable of given the personal rapport he enjoys with
her.The agreement on Farakka was broadly achieved in this manner.An agreement on Teesta would give a major
political boost to the secularist forces and the Awami League in Bangladesh in
the run-up to elections and help consolidate the anti-communal forces in the
Bangladesh political radar.The involvement of West Bengal in India’s policy of
active engagement with Bangladesh is a sine qua non for broad-based substantive
India-Bangladesh relations.Apart from Teesta river,there are other areas such
as control of arsenic poisioning and working on related remediation measures
where India-Bangladesh relations could be developed impacting upon the lives of
the distressed people of both countries.Nearly 90 million people in 59
districts of Bangladesh and 9 million people in six districts of West Bengal
are affected by this scourge.On the economic front,there is adequate scope for
trade across West Bengal Bangladesh border on the Assam-Meghalaya-Bangladesh
border and Tripura-Bangladesh border portions.Therefore in the present
situation,India should grasp the opportunities which are discernible in the
political horizon in Bangladesh and deepen relations through engagement at the
track two tier diplomacy involving India’s political parties as well as by
involving West Bengal as major partner.
This report prepared by
Anil Kumar Upadhyaya
Freelance journalist
India
Date-12/8/13
