India pushing economic diplomacy with Bangladesh to counter China influence

Photo: India’s railway minister Piyush Goyal (3rd from left) and Dr S. Jaishankar (2nd from right) with foreign secretary Harsh Vardhan Shringla (extreme right) handing over 10 broad gauge locomotives to Bangladesh today.

By Amit Agnihotri

New Delhi: India is taking the economic diplomacy route to Bangladesh as a counter to the ChinaPakistan combo’s desperate attempts to create a troubled neighbourhood for the South Asian giant.

While India is locked in a bitter border dispute with China along the Line of Actual Control in eastern Ladakh, Pakistan has been trying to disturb the western border by violating ceasefire along the Line of Control in Jammu and Kashmir.

India, which played a key role in the dismembering of Pakistan and the liberation of Bangladesh (erstwhile East Pakistan) in 1971, believes that fostering trade and cultural ties is a better way to demonstrate the ‘Neighbourhood First‘ policy.

“Very few countries in the world share such close fraternal ties as those of ours. Our partnership today stands out as a role model in the region for good neighbourly relations,” India’s Minister of External Affairs Dr S. Jaishankar told his Bangladesh counterpart Dr A. K. Abdul Momen on a day India handed over 10 broad gauge locomotives to the eastern neighbour.

“Our two countries continue to script a relationship of ‘Shonali Adhyaya‘, guided by the progressive vision of Prime Ministers Narendra Modi and Sheikh Hasina.”

The delivery of locomotives was committed when Sheikh Hasina had visited New Delhi in 2019. On its part, China has also been trying to increase its influence in Nepal and Bangladesh to prick India.

Beijing has recently offered huge tariff concessions to Dhaka‘s exports. Bangladesh’s Ministry of Foreign Affairs said on June 19 that while the country already received tariff-exemption for 3,095 items under the Asia Pacific Trade Agreement (APTA), a total of 8,256 goods would be exempted from the Chinese tariffs.

Interestingly, the China-Bangladesh trade heavily favours Beijing, while the New Delhi-Dhaka trade is much more balanced. China’s exports to Bangladesh in 2018 were $17.8 billion and the imports were below $1 billion. Against this, India’s imports from Bangladesh were over $1.2 billion in financial year 2019-20, while exports reached $7.5 billion. Bangladesh’s exports to India crossed the $1 billion mark in 2019 — a remarkable 43 percent growth over the previous year.

Further, the signing of the Second Addendum to the Protocol on Inland Water Transit and Trade in May 2020 has increased the number of Protocol routes from eight to 10 and the number of Ports of Call from six to 11, besides including two extended Ports of Call.

Add to this the successful completion of the trial run of the container cargo from Kolkata to Agartala through Chattogram in Bangladesh. This landmark development not only reinvigorates the traditional waterway connections between the two neighbours but brings mutual economic benefits as well.

During the COVID-19 pandemic, the business community of the two countries started utilising freight trains for transporting commodities and raw materials for manufacturing industries.

The movement of freight via rail has also ensured that the supply of essential commodities continued undisrupted particularly in the holy month of Ramzan, as trade through land borders faced many challenges. Parcel and container train services have recently been introduced between the two countries.

These cost-effective, time-efficient and environment-friendly modes of connectivity will strengthen the supply chains and open up new opportunities for business between India and Bangladesh.

Besides trade, India remains a committed development partner of Bangladesh and this is demonstrated by its concessional lines of credit worth $10 billion, the largest the South-Asian giant has extended to any country.

“These projects will help in the infrastructure development of Bangladesh, a pre-requisite for its economy to leapfrog to the next level. We need to work together to expedite many of the ongoing projects,” said Dr Jaishankar.

Modi had earlier congratulated his Bangladesh counterpart Sheikh Hasina, as the eastern neighbour is commemorating 50 years of its liberation.

India’s partnership with Bangladesh will be key to building a prosperous and peaceful South Asia, Dr Jaishankar noted, as he pointed out that it will be a befitting tribute to the vision of Bangladesh’s first President and later first Prime Minister Sheikh Mujibur Rehman, fondly remembered as Bangabandhu.

India has invited Bangladesh businessmen to invest in the country particularly in the north-eastern region, which shares boundary with the eastern neighbour and trades in several commodities.

NOTE: Defence.Capital is available on Telegram. Please click here to subscribe

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.