India & Bangladesh share a very warm & cordial relationship, based on mutual trust & friendship which goes beyond the arithmetic of economic gains & losses.
India was the first country to recognize Bangladesh as a separate and independent state and established diplomatic relations with the country immediately after its independence in December 1971. India has provided duty-free quota-free access to Bangladesh on all tariff lines except tobacco and alcohol under the South Asian Free Trade Area (SAFTA) since 2011.
Both nations have scaled up trade & economic engagement, besides implementing a number of connectivity & infrastructure projects.
Connectivity for Prosperity
India and Bangladesh this month inaugurated a bridge over the river Feni connecting Tripura to Bangladesh even as a new World Bank study said transport connectivity between both the neighbours would increase the national income by as much as 17% in Bangladesh and 8% in India.
The Maitri bridge is rightly being called the “gateway of Northeast” as it will connect the landlocked region with Chittagong port in Bangladesh, unlocking the untapped markets of other east and south-east economies.
Inaugurating the bridge virtually, PM Narendra Modi said “Agartala will become the closest city in the country to an international sea port.” Describing it as historic, Bangladeshi PM Sheikh Hasina said, “Opening of any bridge is testimony to Bangladesh’s continued commitment to support our neighbour India in strengthening connectivity in the region.
Bangladesh is India’s biggest trade partner in South Asia. Bilateral trade between India and Bangladesh has grown steadily over the last decade. India’s exports to Bangladesh in FY 2018-19 stood at US$ 9.21 bn and imports from Bangladesh during the same period were US$1.04 bn. Given the regional and global economic scenarios and part of SAARC and BIMSTEC, India had offered duty-free access to several Bangladeshi products.
In order to promote cooperation on bilateral trade, the countries agreed to create an India-Bangladesh CEO’s Forum to provide policy level inputs in various areas of trade and investment and also to facilitate exchanges among the business communities of both countries as Indian Foreign Direct Investment (FDI) in Bangladesh reached US$ 88.0 million in 2015-16.
Both nations have decided to expedite their proposed Comprehensive Economic Partnership Agreement and many times sought concessions including withdrawal of anti-dumping duty on jute products.
Development Partnership
Bangladesh is the biggest development partner of India today. India has extended 3 Lines of Credits (LOC) to Bangladesh in the last 8 years amounting to US$ 8 billion for the development of infrastructure in various sectors including roads, railways, shipping and ports.
In addition to LOCs, India has also been providing grant assistance to Bangladesh for various infrastructure projects including the construction of the Akhaura-Agartala rail link, dredging of inland waterways in Bangladesh and construction of the India-Bangladesh Friendship Pipeline.
Cooperation in the power sector has become one of the hallmarks of India-Bangladesh relations. Bangladesh is currently importing 1160 MW of power from India. The meetings of the Joint Working Group (JWG)/Joint Steering Committee (JSC) on power were also held in 2019.
-Many Indian public sector units such as Indian Oil Corporation, Numaligarh Refinery Limited, Petronet LNG Ltd are working with their Bangladeshi counterparts in the oil and gas sector.
- India has agreed to fund the construction of the India-Bangladesh Friendship Pipeline from Siliguri to Parbatipur for the supply of Diesel to Bangladesh from Numaligarh Refinery Limited.
-ONGC Videsh Ltd has acquired two shallow-water blocks in consortium with Oil India Limited and is currently exploring these blocks. The possibility of gas grid interconnectivity for the mutual benefit of the two countries is also being explored.
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