Land Deal Signed, India and Bangladesh Turn to Boosting Trade, Connectivity

With West Bengal Chief Minister Mamata Banerjee standing by his side, Modi, on his maiden visit here, also expressed confidence at the prospect of a “fair solution” to the Teesta and Feni river water-sharing issues with Bangladesh “with the support of state governments in India”.

After extensive talks between Modi and Bangladesh Prime Minister Sheikh Hasina, the two sides signed 22 agreements, including on cooperation in maritime safety, curbing human trafficking and fake Indian currency.

Hasina, whose country is seen as a hiding ground for insurgents from  north-east India, also promised “zero tolerance” stance against terrorism.

She said the two countries agreed to set up two Special Economic Zones to bridge the growing trade deficit. Modi promised to do “everything” to address it.

He announced a fresh US$2 billion line of credit for Bangladesh and promised quick implementation of the earlier line of credit of US$ 800 million and full disbursement of US$ 200 million.

Border settled after 41 years

The highlight of Modi’s first day here was the exchange of documents related to the Land Boundary Agreement (LBA), which paves the way for the exchange of territories whose unsettled status has been an irritant for the past 41 years.

Under the Agreement, 111 border enclaves will be transferred to Bangladesh in exchange for 51 that will become part of India.

“The visit is at a historic moment. We have resolved a question that has lingered since Independence. Our two nations have a settled boundary. It will make our borders more secure and people’s life there more stable,” Modi said at a joint press interaction with Hasina.

Referring to the unanimous passage of the LBA by Parliament last month, he said it “reflects the consensus in India on relations with Bangladesh.”

Noting that the two countries had accepted the settlement of the maritime boundary last year, he said, “it is evidence of the maturity of our ties and our shared commitment to international rules. So, we stand at a moment of huge opportunity in our relationship. Prime Minister (Hasina) and I recognise that.” .

During the talks, it was decided that Indian consulates would be opened in Khulna and Sylhet while a Bangladesh consulate will be opened in Guwahati.

Referring to the Teesta water issue which remains unresolved, Modi said “our rivers should nurture our relationship, not become a source of discord. Water sharing is, above all, a human issue. It affects life and livelihood on both sides of the border.”

He mentioned the settlement of the boundary issue to say that “we have shown political resolve and goodwill” with it.

“We will work together to harness the rich potential of our relationship. And, we will address our challenges in a spirit of friendship and from a position of mutual trust and confidence,” Modi said, adding that the agreements signed reflect this “vision and commitment”.

SEZ for India to boost economic ties

Hasina, while describing India as a “very important neighbour”, said Modi’s visit has given “us a renewed hope and would provide growth” to our relations.

“The deals that we signed today would open new doors in the areas of trade, investment,” she said but underlined that “the most important [task] is to translate the agreements into a reality.”

She said she believed that “collectively we can work and ensure the prosperity of this region that was Mujib’s dream.”

Sheikh Mujib-ur-Rahman, her father, was the  leader of the Bangladesh freedom struggle and the country’s first President.

Contending that India and Bangladesh have added new dimensions to their economic ties, Modi said the coastal shipping agreement will boost bilateral trade while the Indian Economic Zone will promote Indian investments in Bangladesh.”The new border haat at Kamalasagar will reinforce traditional economic links. And, the agreement on blue economy and maritime cooperation opens a new area of economic opportunities. We should now extend our frontiers of cooperation to space,” he said.Modi said he was “conscious of the huge trade imbalance, despite duty free and quota free access to Bangladesh in India on all but 25 items” and had “assured Prime Minister (Hasina) that we will do everything we can to bridge the deficit.”Indian investments in Bangladesh will help, he said, adding “I will also try to make trade smoother and easier, including at the border.”The agreement on standards and testing is a step in that direction, the Indian Prime Minister said.

He said power supply from India to Bangladesh will grow from 500 MW to 1100 MW within two years. “The 1320 MW Rampal power project is making progress in accordance with your (Bangladeshi) laws and regulation. We can do more together in power sector, here and in India,” he added.

Hasina said India’s growth in economy, education, innovation and technology is praiseworthy. “Even Bangladesh has achieved a lot in the last six years.”

New travel connections

Agreements on two key bus services were also reached, including the Kolkata-Dhaka-Agartala route that will benefit the commuters by reducing travel time by nearly one-third.

Another Dhaka-Shillong-Guwahati route was also flagged off by the three leaders.

Citing the flagging off of two bus services, Hasina said she and Modi had agreed on the importance of connectivity between the two nations and for the overall development of the region. “I am sure we would be able to usher in a society sans discrimination.”

The MoUs signed today include renewal of Bilateral Trade Agreement and renewal of protocol on Inland Water Transit and Trade, MoU between Coast Guards of the two countries, a pact on Prevention of Human Trafficking and another on Prevention of Smuggling and Circulation Fake Currency Notes.

Both the countries signed a coastal shipping agreement which will provide for movement of Indian ships to various ports in Bangladesh. Under provision of another MoU, Indian companies will be allowed to set up Economic Zones in Bangladesh.

The two countries also signed an MoU on Blue Economy and Maritime Cooperation in the Bay of Bengal and the Indian Ocean. Another MoU was signed on use of Chittagong and Mongla Ports.

Opening its insurance sector, Bangladesh handed over a Consent Letter by the Insurance Development and Regulatory Authority (IDRA), Bangladesh to the Life Insurance Corporation (LIC) to start operations in the country.

Annual trade between Bangladesh is around US$ 6.5 billion, out of which India exports around US$ 6 billion while Bangladeshi exports to India are around US$ 0.5 billion.