PM could script a new chapter in Dhaka
01 September 2011
Prime Minister Dr. Manmohan Singh's forthcoming visit to Dhaka early September could script a dramatically new and bold policy framework for India's engagement with its immediate neighbours, including Bangladesh.
The visit would undoubtedly be a `game changer` for the India-Bangladesh relations which has been swaying between optimism and scepticism for quite sometime. Although there was great bon homie and warmth when Bangladesh became a new nation in South Asia in 1971, the relationship soon became frosty and hostile as Bangladesh came under successive regimes led by the military and right wing political parties like Bangladesh National Party and Jamaat-e-Islami which were openly anti-India. The Awami League led by Sheikh Hasina was more positive in its attitude and approach to India, the party, when in power, remained hostage to the anti-India rhetoric of the religious right and BNP.
The return of Awami League and Sheikh Hasina as the Prime Minister in 2009 marked the beginning of a clear thaw in the relationship. Prime Minister Sheikh Hasina's visit to New Delhi in January 2010 was in many ways historic. The joint communiqué signed during her visit set aside the dilemmas and suspicions about each other's interests and intentions and laid out a possible roadmap for a robust and sustainable bilateral relationship. Since then, there have been a series of visits and interactions between top policy makers of both the countries further strengthening the relationship.
Despite such positive steps, the relationship remains mired in suspicions and bureaucratic delays over the following key issues.
Water: -India and Bangladesh share 54 rivers. Being a lower riparian country, Bangladesh has concerns about any major changes in the river flows, caused by diversion of water or construction of dams on the Indian side. Dhaka is also equally concerned about India's proposal of interlinking of rivers.i The primary fear is that if such a project were to be implemented on the Indian side, it would seriously impact agriculture, river systems and ecology. The construction of Tipaimuk Dam on the upper stream of the Barak River in Manipur has been another point of contention. Bangladesh believes the dam would have an adverse impact on the flow of Barak River and harm the ecology of Sylhet district situated downstream. These are some of the concerns which underline Bangladesh's insistence on a comprehensive river water sharing agreement with India.
Till date, there is only one such agreement between the two countries--the Ganges Water Agreement of 1996.
India on its part has assured Bangladesh that it would not undertake any project that would harm Bangladesh and its people. India even invited a parliamentary team from Bangladesh to inspect the construction site. There is, however, considerable level of suspicion in Bangladesh about the dam project. There is, therefore, a great likelihood that both the countries could sign an agreement on Teesta during the Indian Prime Minister's visit. Reports suggest that an interim agreement has already been agreed upon by both the sides and a final draft of the agreement would be ready before Mr Manmohan Singh's visit. Such an agreement could make way for similar treaties on other rivers like Dudh Kumar, Manu, Khowai, Gomti and Muhuri.
Trade and Investment: -Trade imbalance is another contentious issue that needs to be immediately redressed. Bangladesh has over $3 billion of trade imbalance with India.ii The figure would be much higher if illegal or informal trade was also to be accounted. To bridge this trade gap, Bangladesh has been urging duty free access of its products to Indian markets, reduction and elimination of non tariff barriers.
Some of the reasons which Bangladeshi businessmen cite for the imbalance are - a) Laboratory test for every consignment of food products, cosmetics, and leather and textile products; b) delay in getting test results; c) imposition of state tax; d) packaging requirement; and e) anti-dumping and countervailing duties.iii
India recognises Bangladeshi concern and is taking steps to reduce the gap. Taking note of Bangladesh's concern the quota for duty free access of readymade (RMG) Bangladeshi garments was increased to 10 million pieces in April 2011. In fact, the Indian decision to provide duty free access to RMG initiated in 2008 and pruning of negative list have increased Bangladesh's exports to India.iv The export earning from India was US $402.40 million till April 2011, jumping substantially from $303.63 million in 2009-10.v
Since Bangladesh's basket of products is limited, India has been encouraging Indian companies to invest in Bangladesh. The Indian private investment is likely to be around $3 billion. Bangladesh, keen on increasing its exports to India, wants complete withdrawal of volume of quota system on RMG products as also relaxation of 61 items from the negative lists.
Line of credit: - India has offered $1 billion soft loan to Bangladesh for various infrastructure projects. But the execution clause has caused concern in Bangladesh. The agreement was signed on August 2010 and the date of execution of the loan was to be August 7, 2010. However, the agreement came into effect only from February 2011. This means that the Indian lending banks could charge interest on the loan from the date of agreement. The interest charge on the loan offered by India is 1.75 percent per annum with a commitment fee of 0.5 percent on unutilized credit after 12 months from the date of the contract approval. There is a feeling in Bangladesh that the Indian interest rate was higher than the rates charged by multilateral donor agencies like World Bank and Asian Development Bank.There are also reservations over the condition that 85 percent of the loan amount would be supplied by Indian sellers in the form of goods and services, and consultancy.
Boundary Issues: - Major issues concerning the boundary are delimitation of land and maritime boundary, enclaves and land in adverse possession. India and Bangladesh share 4094 kilometres of land border. Major portion of this has been demarcated and only 6.5 kms remains unresolved. The sectors where delimitation remains pending include - Latithila-Dumabari (Assam Sector), South Berubari (West Bengal Sector) and Mahuri River/ Belonia Sector (Tripura Sector). The primary reason for the delay is that a mutually acceptable resolution would require both the countries to part with certain portions of land.
Enclaves- India has 111enclaves in Bangladesh (17,256.24 acres) while Bangladesh claims 51 (7,083.72acres) inside India. These enclaves are located in Cooch Bihar district of West Bengal. The problem with these enclaves is that despite being isolated they are part of the mainland. Bangladesh has been demanding free movement of enclave dwellers and exchange of enclave people. Except for the Teen Bigha enclave handed over to Bangladesh by India in 1992, an acceptable resolution of other enclaves remains pending.
Land in adverse possession- Thirty-four pieces of Indian land remain with Bangladesh and 40 pieces of Bangladeshi land are under India's possession. This has been a source of regular conflict between the border guards of the two countries, often leading to exchange of fire, an issue which has been a serious discordance on both sides of the border. These patches on either side of the borders have also become a major transit for cross-border smuggling of arms, narcotics, trafficking of women and children and also migration.
There was some progress on this front after the visit of Shiekh Hasina. Following official level talks, there was visible progress in resolving some of the issues. A major step was to allow 24-hour unfettered access through Teen Bigha Corridor to Bangladesh nationals.
A comprehensive resolution of this problem is likely during the Prime Minister Singh's visit. But success of such an initiative would require taking people of both the countries, particularly those living along the border, into confidence. For instance, people living on Meghalaya-Bangladesh border are resisting joint survey of border as they fear losing their farm land.vi
The maritime boundary is equally complex. The problem is largely due to the concave shape of Bangladesh's coast line. India has offered to resolve the matter under United Nations Convention on Law of the Sea but Bangladesh has been lukewarm to the idea because it believes that the method suggested by India leaves it with little leverage over the sea. In addition, the region is rich in natural resources, mainly deep-sea gas. Bangladesh has already levelled allegations against India's decision to float international tenders for exploration of hydrocarbon in the area. Though both the countries have discussed the issue several times, there has been no mutually acceptable solution. Bangladesh has now approached the International Tribunal for a way out.
Transit Issue:-Transit is an important issue for India. Technically speaking the issue of transit was resolved in 1972 when both the countries agreed to make mutually beneficial arrangements for the use of their waterways, railways and roadways for commerce between the two countries and for passage of goods for between two places in one country through the territory of the other. Since then, Bangladesh has allowed transit in waterways, though it has been underutilised due to certain problems of navigation.
The issue of road transit remains pending. India wants Bangladesh to provide road transit to North-eastern states. At present, the only road link between the mainland and the north-east is the narrow strip called the Siliguri Corridor which is under severe strain from heavy traffic flow. The high transportation cost has restricted the growth of trade and commerce in the north-east. This connectivity problem has also discouraged any substantial investment in the region. Some breakthrough was achieved during Shiekh Hasina's visit when Bangladesh agreed to provide transit to India in lieu of India agreeing to provide Bangladesh transit for Nepal and Bhutan. The Bangladesh-Nepal transit is already operational.vii
A resolution of this issue is mired in serious doubts on the Bangladesh side. It is argued that the transit facility once given was difficult to take back, and such a facility may encourage terrorism and insurgency. Other concerns include damage to the roads and bridges in Bangladesh by the increased traffic flow from the Indian side.viii A Bangladesh government committee on transit concluded that there was inadequate infrastructure to handle the expected traffic volume of traffic and it would at least four years and TK49.835 crore to develop adequate infrastructure.ix
These concerns can be addressed adequately if India were to offer assistance, both financial and technical, to create infrastructure in Bangladesh. It must also be pointed out that the transit would only benefit India but also Bangladesh considerably. According to an ADB study Bangladesh could earn $ 50 million annually from the first year which could reach $1 billion from the sixth year. Such a facility would also help Bangladesh to transform Chittagong into a regional port.
Security:-Illegal migration has been a contentious issue between the two countries for long. Illegal migration from Bangladesh has disturbed the demography of certain states, fuelling ethnic tensions in the north-eastern states of India. The illegal migration also creates an internal security threat for India as some of the migrants are used by various anti-India groups to carry out subversive activities.
Some of the fallouts of illegal migration have been addressed by the signing of three major agreements -on mutual legal assistance in criminal matters; transfer of sentenced persons and combating international terrorism, organized and illicit drug trafficking. In the recent past, both the countries have had considerable success in containing drug and arms smuggling and disrupting terrorist and militant networks. Notably, India has been able to neutralise the operational base of several insurgent and terrorist groups with the help of Bangladesh.Despite such a close cooperation, there are some irritants which need to be addressed without any further delay. This includes the Indian demand to extradite Anup Chetia, self proclaimed general secretary of ULFA.
The expectations, therefore, from the upcoming visit of Prime Minister Singh are quite high in Bangladesh and going by the flurry of activities between New Delhi and Dhaka in the recent past it is most likely to be a turning point in the history of South Asia.
Joyeeta Bhattacharjee is Associate Fellow, ORF
i The Governemnt of India had instituted a task force to investigate the viability and other factors of the project. The scheme involves potential transfer of surplus water from Bramhaputa-Ganga basin and diverts it to rivers in states of Uttar Pradesh, Rajasthan, Maharastra, Gujarat, Orissa, Andhra Pradesh, Karnataka and Tamil Nadu through canals.
ii Nazmul Ahsan, "India seeks duty-free entry for products on sensitive list", The Financial Express, May 9,2011
iii Sajjadur Rahman, "Analysts urge India to erase trade barriers to Bangladesh", The Daily Star, Janury 2011
vi In 2008, India announced pruning of its negative lists of least developed countries like Bhutan, Nepal and Maldives from 744 items to 500. This has also benefited Bangladesh as this increased the scope of duty free access of items exported from the country.
v " Country earns $402.40 million by exporting goods to India in last 10 months", Bangladesh Sangbad Sangstha, May 2011 in http://bssnews.net/newsDetails.php?cat=7&id=180729&date+2011-05-30 accessed on May 30, 2011
vi The issues that had prevented delimitation of the land boundary were-
a) In Assam sector (2.5kilometers) - India insisted on the applying the original gasdal map of 1915-16 of Dhumabari as the basis for demarcation. Contrarily, Bangladesh insisted on Theodolite Traverse Data as the basis for demarcation since this helps Bangladesh to claim three villages for itself giving India two villages.
b) In West Bengal sector (1.5 kilometres) - the two sides agreed on using Sui river as the demarcation; however, India insisted on the current flow, while Bangladesh insisted on earlier flow which enable Bangladesh to claim Daikhata area.
c) In Tripura sector (2.5 kilometers) - The change in the course of Muhuri River resulted in formation of Shashaner Char, a small piece of land around 46 acres in size and this falls under Indian territory. Interestingly, Bangladesh was unwilling to apply the present river course as the boundary line.
vii On July 16 two wagon trains left Bangladesh for Nepal with 2,389 metric tonnes of diammonium phosphate (DAP) imported from Morocco by Agriculture Import Corporation Limited of Nepal making it first to use the Chittagong power. "Nepal first to use Ctg port", The Daily Star, July 17, 2011
viii Piyali Dutta," India-Bangladesh Relations: Issues, Problems and Recent Developemnts", IPCS Special Report, September 2010
ix " Total transit facility not before 4 yrs", The Daily Star, April 20, 2011