Bangladesh-India Relations: Past, Present and Future | 2018-01-26 |

Bangladesh-India Relations: Past, Present and Future

Tariq Karim

    26 January, 2018 12:00 AM printer

Bangladesh-India Relations: Past, Present and Future

Tariq Karim, Former Bangladesh High Commissioner to India

Bangladesh’s relationship with India commenced in 1971 with the critically important Indian assistance, whether political, diplomatic, military, or economic, to Bangladeshis struggling for liberation from the Pakistani yoke. Bangladesh’s unique geography makes it virtually India-bound on three sides except a small stretch of boundary with Myanmar. This makes India loom large in her political psyche, making it inevitably a critical factor in foreign policy, in terms of defining national security and economic interests. Additionally, being crisscrossed by numerous rivers large and small, practically all of Bangladesh’s rivers - the lifeblood of her economy - having their catchments in India and beyond, Bangladeshis are gripped by the “lowest-riparian syndrome”, feeling constantly vulnerable, both from a surfeit of waters, as well as, ironically, a deficit of waters.

While the old Cold War alignments have reconfigured considerably in the last two decades, politics within Bangladesh struggles still to find equilibrium between the different competing external forces and stimuli emanating from some of the principal players of the previous Cold War rivalry, with India-China competition and rivalry remaining still largely unchanged.  A new dimension has been added by China’s “Looking West” policy, now sought to be implemented through its robustly well-defined Belt and Road Initiative (BRI) and India’s “Act East” policy, which seeks to connect India with Southeast and East Asia. In this new strategic rivalry, Bangladesh straddles the crossroad between South Asia and South East Asia - the two fastest growing regions of the world, forming the eastern end of the bridge that straddles these two regions, with Myanmar straddling the western end. While this is to her advantage, her location also has a downside, as it impinges directly into the continuing power play and competition for strategic advantage by India and China. Additionally, both ends of this critically important bridge between the two regions could well be engulfed in flames lit by the Rohingya refugee crisis, burning the land-bridge down on both ends.

India’s main concern for decades had been its perception that Bangladesh had, wittingly or otherwise, been providing haven for, or even abetting, elements of various militant groups from the North-east Indian states who were actively pursuing anti-India activities using Bangladesh as a launching pad. Addressing the security concerns boldly and with demonstrable sincerity served to set the foundations for reconfiguration of relations dramatically.  Security cooperation between the two countries has never been better; in fact, it is exemplary with both countries acutely aware of the imperative to sustain and deepen this new-found cooperation in the face of stubbornly persisting threats of violent extremism constantly morphing and unrelenting to date. Commensurate with the upswing in relations since 2009, both countries have gradually but steadily worked together to expand positive interaction at all levels between their respective defence forces.

The legacy of contentious border issues that had remained festering since the 1947 Partition, adversely impacting on relations between the new states that emerged in various ways, was also inherited by the Bangladesh that emerged from the ashes of war-ravaged East Pakistan in 1971. Good boundaries between neighbours, devoid of contention, make for good neighbourliness. In a region that had projected an image of singular lack of bonhomie and established a negative record globally for its inability to get its regional cooperation act together in any meaningful manner in the last over six decades, putting the thorniest of boundary issues, on land and maritime waters, behind them by Bangladesh and India was a game-changing development. This was due not a little to the new political bonhomie that had been fostered at the highest levels of the two countries, and was the most important enabling factor.

The game-changing visit by Bangladesh Prime Minister to India in January 2010 reflected the two Prime Ministers’ viewing the sub-region of Bangladesh, Bhutan, India and Nepal holistically, in marked departure from the past when India had insisted on dealing with all immediate neighbours within strictly delineated bilateral silos. This previous mind-set had been the inherent cause for Bangladesh’s consistent opposition to allowing transit and trans-shipment facilities through Bangladesh, a legacy inherited from Pakistani times, and effectively stymied long-labouring efforts of ECAFE-ESCAP towards moving its regional countries to getting on board the Trans-Asian Highway and Railways proposals.

In 2010, India and Bangladesh moved away from the strictly bilateral paradigm that had hitherto held them hostage, and instead attached increasing importance to connectivity issues as they relate to growth and development. Both realised that just as Bangladesh with its then growth rate at around 6% (now over 7%) could benefit hugely from India’s huge economy with its aspiring double-digit growth potentials, so also could the impoverished and land-locked North–east of India with its 4% growth rate benefit from Bangladesh’s prosperity. This would effectively square the circle of interlinked and inter-dependent prosperity.

Both countries accordingly strengthened the scope for connectivity-related initiatives. Their call for resumption of road and rail links effectively allowed both countries to take up connectivity issues incrementally but progressively. Bangladesh agreed to allow its Mongla and Chittagong sea ports for movement of goods to and from India through road and rail. Nepal and Bhutan were also given through transit trade privileges via road and railways to access Mongla and Chittagong ports. As this opening would facilitate trade and transit for Nepal and Bhutan, so would it permit easier access for India to its North-eastern States. The BBIN Motor Vehicles Agreement, signed by these four countries in May 2015 is awaiting final ratification by the Upper Chamber of Bhutan’s Parliament soon. With the ratification process hopefully completed soon, the SOP’s already agreed upon by the four concerned governments following successful trial runs between designated routes in Bangladesh, India and Nepal should become fully operational with seamless movement of passenger and cargo vehicles commencing at long last. Bangladesh and India are now engaged in considering reconnecting all railway links that had been left behind by the British in 1947 and after having revived coastal and direct maritime shipping routes are now contemplating reviving, in stages, inland waterways routes that had once, historically, described this water-linked region. Bangladesh’s bold and forward-looking initiatives, in fact, have poised and readied it to assume its historic and destined role as a hub of connectivity between South and East Asia, by road, railways and waterways. 

Experience shows that countries which have close economic relations also tend to develop cordial relations on other fronts. The huge trade deficit between Bangladesh and India, historically tilted towards the latter, had been an obsessive cause of irritation and jaundiced public perception in Bangladesh. The 2010 Communiqué encouraged imports from Bangladesh by India by removing tariff and non-tariff barriers and port restrictions and facilitating movement of containerized cargo by rail and water. India, in 2011, followed up on commitments to provide duty-free access to SAARC LDCs and reduce the number of items from India’s negative list. Effectively, all items of Bangladesh’s interest have been removed from India’s previous, very restrictive, negative list regime. Trade flows both ways have increased significantly. For example, in 2004, Indian formal (officially recorded) exports to Bangladesh stood at USD 1.7 billion (informal trade accounted for an additional similar figure), while Bangladesh’s exports to India were around only USD 78 million (World Bank). In 2009, Indian formal exports amounted to USD 4 billion (with an additional USD 4 billion accounting for informal exports), while Bangladeshi exports to India were USD 350 million.  In 2013-14, Indian exports to Bangladesh stood at USD 6.1 billion and imports from Bangladesh stood at USD 462 million. In 2015, India’s official exports to Bangladesh topped 5.8 billion dollars, but its imports from Bangladesh had jumped to nearly USD 518 million (World Bank). Total formal bilateral trade exchanges in 2013-14 stood at USD 6.6 billion, as contrasted with only USD 2.7 billion five years earlier. Despite this steady, if incremental, growth India’s trade with Bangladesh represents a very small part of its total trade, just over one percent since the mid-1990, and in the 2000’s about 3% of its total exports and a miniscule share of its total imports (0.01%). 

For Bangladesh, India has transformed into its biggest source of imports, about 16%, overtaking China and Singapore. Bangladeshis argue that the “deficit is aggravated by India’s protectionist policies”, but analysis of data of its imports from the world as a whole over eight years, many of which carried a higher rate of tariff than from Bangladesh, and other factors suggest that “the low level and slow growth of Bangladesh’s exports to India reflect fundamental comparative advantage factors, not discriminatory import practices (World Bank)”. The reality is that the range and volume of products in the basket that Bangladesh can offer to India is very miniscule compared to the range and volume required by India, while India can offer to Bangladesh a very wide range and in sufficient volume products that Bangladesh would need to import from sources abroad in any event. Indian investment in textiles in Bangladesh that are re-exported to India taking advantage of the duty-free access that Bangladesh enjoys, has added to Bangladesh’s export volume to India.  More such Indian investments will help to offset the perceived trade imbalance.

The political bonhomie between the two countries since 2009 have translated into increasing proactive interlocution and exchanges between the private sectors of the two countries. India and Bangladesh signed a MOU in June 2015 for cooperation in setting up an Indian Special Economic Zone in Bangladesh.  During Bangladesh Prime Minister’s visit to India in April 2017, it was announced that India would set up three SEZs, in Mongla, Bheramara and Mirsarai respectively. In meetings between Bangladeshi entrepreneurs led by the FBCCI team accompanying the Prime Minister and Indian entrepreneurs led by the CII, MOU’s were signed for Indian Investments in Bangladesh to the tune of over USD nine billion in power, energy, logistics, education and medical sectors. Two sides also identified areas of cooperation in the Bay of Bengal in exploring hydrocarbons, marine resources, deep sea fishing, preservation of marine ecology and disaster management.

In 1985, the late Rajiv Gandhi had said that it was in India’s own enlightened self-interest to abjure a “beggar thy neighbour” approach and instead actively assist Bangladesh to become economically prosperous and stable, because that would underpin the security and development of both the countries. That far-sighted vision remained largely unrealised, until now.  India’s several low-interest, long-term lines of credit (almost IDA terms) for Bangladesh over last six years, totalling USD 8 billion now (including USD 500 million for defence purchases), is finally a step in that direction. These credit lines are enabling Bangladesh to address the works required to transform itself into a hub of connectivity that would spur domestic and regional economic growth and development.

Realising that without access to increased power one could not ever hope to trigger an industrial revolution that would help her achieve her ambitious development goals, Bangladesh not only sought to import power from India to meet its own growing shortfall but also conveyed readiness to act as a facilitator of power exchanges between NE India and Indian national grid, through grid connectivity. Bangladesh, a hugely power deficit country, is now already importing 500 MW of electricity from linking up its western power grid with Indian grid in West Bengal (connecting at Bheramara in Bangladesh from Bahrampur in West Bengal). This same line’s capacity is being augmented to enable Bangladesh to import an additional 500 MW electricity from Indian grid, and exploratory talks are understood to be well underway for construction of a similar parallel line for an additional 1000 MW. Bangladesh has also linked its eastern grid in Comilla with India’s Tripura state, and is currently importing 160 MW, which could increase as Tripura’s generating capacity increases. Bangladesh-India joint Friendship Power Project in Rampal in Khulna division in Bangladesh is currently underway that, when completed, will generate 1320 MW of thermal power. Several more joint ventures between Bangladesh government and Indian private sector power companies, notably Reliance and Adani Power respectively, are set to ultimately generate an additional 4600 MW of power for Bangladesh when completed. Bangladesh’s nuclear power ambitions are also now underway at Ruppur, with Russian built reactors and Indian training for its operational personnel, to generate 2000 MW when completed. These first steps have already opened new vistas with force multiplier effects. Towards ensuring energy security, Bangladesh is now willing to become a shareholder in future hydro power-generation projects in NE-India and in the regional neighbourhood in Bhutan and Nepal, as well as in extending grid connectivity to facilitating power transmission through power exchanging and trading. Partnership in such projects would eventually help setting up an interconnected sub-regional grid of symbiotic interdependencies that can only be to the immense benefit of all peoples of the region and go a long way in helping them realise their ambitious development goals.

Bangladesh and India share 54 transboundary rivers between them, but so far they have been able to resolve only the sharing of waters of one river (The Ganges) and arrive at an agreed draft interim agreement on a second (The Teesta) that still remains unsigned. Issues pertaining to water sharing trigger emotive reactions in Bangladesh (as indeed they do within India between states) and, therefore, have often caused great tensions in their relations. The Teesta issue has become highly emotively charged and exceedingly politicized over the last few years, transforming into an ungrounded and uninsulated  political lightening rod standing on water-logged ground in which both sides stand in knee-deep water – were it to be struck by political lightening, actors on both sides would have to bear considerable collateral political damage. Repeated assurances by the Government of India at all levels notwithstanding, Bangladeshi public perception tend to regard this as undiminished Indian insensitivity to Bangladesh’s water concerns. 

Notably, and significantly, Bangladesh’s approach to addressing her waters issues has graduated from piecemeal and individually addressing questions of sharing of river waters to managing them holistically on basin-wise manner.  This change of the narrative serves to shifting the focus away from contentious division of water resources to cooperatively optimising management and use of the commons. In the meantime, both India and Bangladesh have realised the importance of using their water-connectivity for making transportation more cost effective and environment-friendly. Bangladeshi and Indian efforts to reviving waterways can dovetail into each other.

The writer is Bangladesh’s immediate past High Commissioner to India (from August 2009 until October 2014). His earlier Ambassadorial assignments were in Washington, Pretoria and Tehran. He has served as Deputy Chief of Mission in Beijing and New Delhi, and in different diplomatic capacities earlier in Tehran, Bonn, Bangkok and London