Reset with Bangladesh

| Updated on March 19, 2021

Modi’s upcoming visit is aimed at consolidating strategic, economic ties

Prime Minister Narendra Modi’s Bangladesh trip next week will be his first foreign foray since the pandemic outbreak. Considerable diplomatic significance is attached to the fact Bangladesh heads Modi’s must-visit list and that he’ll be in Dhaka for that country’s golden-jubilee independence celebrations. Barring a few blips, bilateral ties have moved forward apace since Prime Minister Sheikh Hasina Wazed took power a decade ago and, particularly since 2015 when the two sides settled their long-standing boundary dispute. Both sides are keen to boost rail, road and waterway links, which would benefit India’s north-east States. One confidence-building measure has been the opening of the Maitri Setu linking Tripura with Bangladesh that brings India’s north-east closer to Chattogram and other Bangladeshi ports. To improve relations at the local level, several haats, or markets, have also been opened at border locations where trade is conducted in rupees and takas. More haats could be announced during the March 26-27 visit. There may also be progress toward launching talks on a Comprehensive Economic Partnership Agreement (CEPA).

Bangladesh’s economy, pegged by the World Bank to grow at 1.6 per cent in 2020-21 (July-June), is expected to rebound to 3.4 per cent in 2022. India’s top corporate houses, especially in sectors such as automobiles (the Hero Group, Ashok Leyland and Tata Motors) have set up shop there. There had been huge plans for Indian involvement in Bangladesh’s power sector but prospects have dimmed due to a recent power surplus. When it comes to trade, India, unsurprisingly, enjoys a large surplus, a situation that Bangladesh would like remedied. One suggestion has been that India should import more Bangladesh-made garments but domestic producers have opposed such moves.

On the NRC and the Citizenship Amendment Act, Bangladesh has conveyed its displeasure. Several ministerial visits were postponed by both sides. Modi’s trip is expected to dispel misgivings. India has sent two million doses of Covid vaccines free as a goodwill gesture. Its intent is to counter an assertive China’s drive for greater influence in the country. China is investing in Chattogram port and also developing Kyaukpyu port in Myanmar’s Rakhine state, in the process attempting to strengthen its position in the Bay of Bengal. Dhaka is part of Beijing’s Belt and Road Initiative. However, China doesn’t appear to have succeeded in outmanoeuvring India, at least until now. That said, New Delhi must ensure that long-term ties don’t depend on one leader. Bangladesh’s strategic location provides a link between South Asia and Southeast Asia. India should build stronger bridges to maintain its eastward thrust.

Published on March 19, 2021

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