Written By: Zara Mustafa
Bangladesh and India share a valuable multidimensional relationship given their shared history, geographical proximity, social, political and economic ties. They both have acknowledged the unabated significance of their relations and have always aimed to enhance the bilateral cooperation and ties since the onset of the Independence of Bangladesh.
The success of the PM’s 4-days long visit to India (September 5th-8th) has been subject to controversy so far. Some experts laud the 7 memorandum of understanding (MOUs) signed by the two nations pertaining to water sharing, training of Bangladeshi railway personnel, scientific and technological cooperation, space technology, media broadcasting and training of Bangladesh judicial officers. critics are critical about the lack of emphasis on certain issues like the Teesta River Water sharing and unattained results against the expectations of the visit and the contradictions in climate change action and goals.
Kushiyara River Treaty: Good Prospects for the Agricultural Sector
The MOU signed between India and Bangladesh on sharing the resources of Kushiyara, entitles Bangladesh to withdraw up to 153 cusec of water. (India, Bangladesh Sign Pact on Sharing Waters of Kushiyara River – The Diplomat, 2022)
Water sharing has long been a contentious issue between the two countries having 56 mutual rivers. Kushiyara is one such is a distributary river of Bangladesh, branching from the Barak river of India.
Despite some experts asserting that the amount would be meager, it undeniably is momentous for Bangladesh for us. Firstly, it is the first such treaty since the Ganga water treaty of 1996. Secondly, it is estimated to provide for irrigation of 6,000 hectares of land at 5 Upazilas near the banks of Kushiyara in Sylhet, where it was previously very inconvenient and expensive to extract water from underground. (Billah, 2022)
This is highly likely to lead to greater variety and volume of agricultural production as the farmers of the regions can now also grow Boro crops, which they were previously unable to. Undoubtedly, there will be greater employment opportunities for a larger number of farmers thus alleviating poverty in the respective region.
Energy Sector Advances: Myopic Trade-off between the future and the present?
During PM Sheikh Hasina’s visit on 6 September 2022, she and PM Narendra Modi virtually unveiled unit-I of the Maitree Super Thermal Power Project located in Rampal of Bagerhat, Khulna which had concessional funding from India. (India – Bangladesh Joint Statement during the State Visit of Prime Minister of Bangladesh to India, 2022)
The power plant is estimated to provide additional 4,365MW of energy capacity after operationalization, reducing the cost of energy at a time when Bangladesh is facing a severe energy crisis owing to the import crisis, the Russia- Ukraine war and our own long term reluctance to explore natural gas at home.
However, the move is likely to be detrimental for sustainable development of Bangladesh even if it improves energy efficiency in the short term.
Moreover, moving forward with the project, despite several protests by environmentalists who are concerned by the foreseen and irreversible ecological damage on Sundarbans and the Southern region even with the most modern technology is likely to provoke unrest and obstructions from various pressure groups (Mollah, 2022). While the world is turning away and minimizing the use of coal owing to the climate change concerns, Bangladesh intensifying its concentration on coal for energy supply is a matter of severe concern.
Call for External Investments in Development Projects
During her trip to India, PM Hasina attended a business Conference organized by the Confederation of Indian Industries (CII), where she promoted Bangladesh as having the most liberal investment regime in the region, a wide range of facilities, lucrative incentive policies and consistent reforms . She urged the Indian corporations to invest in our infrastructure projects, manufacturing, in energy and transport sectors. (PM Sheikh Hasina Urges Indian Businesses to Invest in Bangladesh | Business Standard News, 2022)
Investment in enhancing connectivity has always been a milestone for economic growth and development.
CEPA Negotiations to Commence Sooner:
Following PM Hasina’s visit to India, PM Narendra Modi has announced that the negotiations on the The Bilateral Comprehensive Economic Partnership Agreement (CEPA) will soon proceed. The proposals of free trade agreement are comprehensive in nature and extend to services, investment, intellectual property rights and e-commerce.
It is believed to benefit Bangladesh significantly, increasing its GDP by 1.72% through expanded export opportunities and higher investment. According to BFTI’s and RCTI’s joint estimates, the pact is estimated to broaden exports by 190.5% for Bangladesh and 188% for India (Mitha Rafayet, 2022). Points to further assess for Bangladesh are ways to mitigate the adverse effects on local sectors due to increased import competition and repercussions in the relations with other countries from whom trade is going to be diverted to India and the local sectors that would be affected due to increased import competition following the CEPA.
“Free transit” Offer to Bangladesh: Is it Really free?
India has offered free transit facilities to third countries-Nepal and Bhutan. Currently, the exports to Nepal and Bhutan are low, which do have prospects of increasing that both are growing. However, according to the World Bank, India has high non-tariff barriers. Therefore, without feasibility testing, it is too early to say how much would Bangladesh gain by the free transit or if at all.
Prof Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue and Rizwan Rahman, President at Dhaka Chamber of Commerce & Industry asserted that the BBIN (Bangladesh, Bhutan, India, and Nepal) motor vehicle agreement should be implemented first in order to reap true benefit from the free transit facility. (Businesses Build Hopes on India’s ‘Free Transit’ Offer, 2022)
With the bleak economic expectations and current economic crises pertaining to the ongoing Russia-Ukraine War and the repercussions left behind by the Pandemic, regional cooperation is more crucial than ever for Bangladesh.
India has always been a very important neighbor who stands to be one of the top 6 export markets in the world and the largest trading partner in South Asia for Bangladesh as of the present, with the bilateral trade exceeding $18bn last fiscal year. Therefore, enhancing bilateral ties is crucial.
Which party will be more benefitted through the pact signed and the negotiations on process is another debate and it can be surely be concluded that PM Hasina’s visit has opened Bangladesh to greater opportunities to grow and flourish. However, the Maitree Power Plant leaves us skeptical considering our sustainable development goals.
Featured Image Courtesy: Livemint
Billah, M. (2022, September 25). Kushiyara water-sharing: How Bangladesh benefits from the agreement with India. https://bdnews24.com/bangladesh/tni7wsc4j3
Businesses build hopes on India’s ‘free transit’ offer. (2022). https://www.tbsnews.net/analysis/businesses-build-hopes-indias-free-transit-offer-492782
India, Bangladesh Sign Pact on Sharing Waters of Kushiyara River – The Diplomat. (2022). https://thediplomat.com/2022/09/india-bangladesh-sign-pact-on-sharing-waters-of-kushiyara-river/
India – Bangladesh Joint Statement during the State Visit of Prime Minister of Bangladesh to India. (2022, September 7). https://www.mea.gov.in/bilateral-documents.htm?dtl/35680/India++Bangladesh+Joint+Statement+during+the+State+Visit+of+Prime+Minister+of+Bangladesh+to+India
Mitha Rafayet. (2022, September 4). Bangladesh-India CEPA: Something to look forward to | The Daily Star. https://www.thedailystar.net/news/bangladesh/diplomacy/news/bangladesh-india-cepa-win-win-prospect-both-3110196
Mollah, H. (2022, September 1). Environmentalists gear up for protest as Rampal plant set to launch. https://www.dhakatribune.com/bangladesh/2022/09/01/environmentalists-gear-up-for-protest-as-rampal-plants-prepared-to-launch
PM Sheikh Hasina urges Indian businesses to invest in Bangladesh | Business Standard News. (2022, September 8). https://www.business-standard.com/article/current-affairs/pm-sheikh-hasina-urges-indian-businesses-to-invest-in-bangladesh-122090800774_1.html