Monday, 5 June, 2023

Bangladesh’s geostrategic significance to Japan and north-east India

Bangladesh, Japan and India met in Tripura on 11-12 April to put in place connectivity initiatives to harness the region's commercial potential. In this meeting, Japan proposed developing an industrial hub in Bangladesh, with supply chains to landlocked north-eastern states in India, Nepal and Bhutan, by creating a port and transport in the region. After Kishida's visit, the Japanese government approved $1.27 billion in funding to Bangladesh for three infrastructure projects, including a new commercial port in the Matarbari area with links to adjacent landlocked Indian states, and broader international markets. Japan's ambassador to India, Hiroshi Suzuki, said it could be a win-win plan for India and Bangladesh.

It is well known that India and Japan are the most significant development partner in the South Asian region. But how have Bangladesh become so indispensable to both countries that they are hosting meetings and stressing the issues over and over?

The Bangladesh Factor

First of all, India's north-east is key to Japan's Indo-Pacific plan. On the other hand, Bangladesh is key to India's north-east. So, the partnership with Bangladesh is inevitable to the Indo-Japan partnership. The north-eastern region is a critical geostrategic site for India and Japan in sustaining multilateral relations because it shares borders with several other countries, including Nepal, Bhutan, China, Myanmar and Bangladesh.

Secondly, the comprehensive collaboration among India, Japan and Bangladesh provides the landlocked north-east with access to the Bay of Bengal and access to ASEAN countries, which plays a crucial role in unleashing the enormous potential for growth and prosperity based on better access to the Indian Ocean and becomes crucial for the improvement of people's lives of north-eastern region.

Moreover, Japan has been working closely with India to support the development of the north-eastern region through the India-Japan Act East Forum. The plan involves adjusting tariffs, boosting connectivity, jointly courting investment, particularly from Japanese enterprises, and binding India closer to countries on the Mekong River system, such as Myanmar, Laos, Thailand, Cambodia and Vietnam. It is impossible to connect north-eastern region with the mainland of India without Bangladesh. On the other hand, Japan would not be able to get closer to India’s north-eastern region without the connectivity over Bangladesh.

Matarbari Deep Seaport can be a geopolitical game changer

Japan is investing in north-east India and Bangladesh, including the deep-sea port at Matarbari that will connect the landlocked region with the Bay of Bengal. The envisaged Matarbari project would be Bangladesh's first deep-sea port capable of hosting large vessels. The deep seaport was likely to become operational by 2027 and would be the key to building an industrial hub connecting the Bangladeshi capital Dhaka to landlocked areas of India. Upon completion, it should serve as a critical port for India's underdeveloped north-eastern states. Regarding port development, Japan could hardly ask for a better spot than Matarbari— a natural gateway to both South and Southeast Asia. Tripura state, around 100 kilometres from the proposed seaport, might serve as a gateway for regional exporters.

Major Japanese Investment Projects in North-east India

Japan has played an important role in many infrastructure projects in north-east India. Japan will help build roads in Assam, Mizoram and Tripura to connect Japanese-assisted projects in Bangladesh. Earlier in 2019, the Government of Japan invested 205.784 billion Yen, equivalent to approximately Rs. 13,000 crore, in several ongoing and new projects in different states of India's north-eastern region. Some of the important projects in which Japan will collaborate include the Guwahati Water Supply Project and Guwahati Sewage Project in Assam, Northeast Road Network Connectivity Improvement Project spread over Assam and Meghalaya, Northeast Network Connectivity Improvement Project in Meghalaya, Bio-diversity Conservation and Forest Management Project in Sikkim, Sustainable Forest Management Project in Tripura, Technical Cooperation Project for Sustainable Agriculture & Irrigation in Mizoram, Forest Management Project in Nagaland, etc. As part of its Official Development Assistance (ODA) commitment to India, it has contributed ODA loans for the North East Road Network Connectivity Improvement Project (which includes the National Highway 51 in Meghalaya and the NH54 in Mizoram). This will support the expansion and up gradation of the Shillong-Dawki strip in the north-eastern state of Meghalaya and the construction of a new bridge in Dawki (on the border with Bangladesh). In addition, private Japanese organisations, such as the Nippon Foundation, have financed the construction of the Imphal War Museum in Manipur in north-east India in memory of the nearly 70,000 Japanese soldiers who perished in the Battles of Imphal and Kohima during the Second World War. In addition, in a significant development, India and Japan have also established the India-Japan Act East Forum, and the forum's first meeting was held in December 2017. This meeting was co-chaired by the former Indian Foreign Secretary S Jaishankar and Japan's Ambassador to India, Kenji Hiramatsu. Launching various programs, such as the National Highway Network, Product-Linked Incentives Programs, and the Gati Shakti Master Plan, contributes to Japan's "Strategic interest" in the north-eastern region. Japan views these programs and projects as incentives for various investments.

The goal of Joint Collaboration

None of those projects would be fruitful unless there is connectivity through Bangladesh. Developing an industrial value chain connecting the Bay of Bengal and the north-east will bring significant economic benefits to the north-eastern region and Bangladesh. The purpose of such collaboration is to lure investment toward Bangladesh and India's north-eastern states from current manufacturing hubs in Southeast Asian nations like Thailand. Rising wages have forced manufacturers to look elsewhere for opportunities.

India, Japan and Bangladesh need to create a mechanism to discuss three key stumbling blocks to regional investment: tariffs, customs procedures and connectivity. India and Bangladesh are negotiating a Comprehensive Economic Partnership Agreement (CEPA) that is expected to boost bilateral trade. Bangladesh and Japan are also in talks to conclude an economic cooperation agreement that would spur trade and investment. With infrastructure projects set to be completed over a five- to ten-year horizon, the proposal for joint discussions on investment promotion, customs and tariffs will set the stage for an economic boom in India's north-east.

Without Bangladesh, India and Japan cannot run the development projects or create any supply chain in north-east India. India has always benefitted from Bangladesh whenever it comes to the north-east. Bangladesh had been by India's side, whether in trade or security. So, India needs to act carefully on India-Bangladesh bilateral relations as Bangladesh is an essential factor for the development of the north-east and India-Japan relations.


Ishita Singh Bedi, an Assistant Professor, Amity University, Noida, India