Indo-Bangla Trade Focus on the North East OVERVIEW

Indo-Bangla Trade
Focus on the North East
• Economic relations between North Eastern India and
Bangladesh: Scope
– Opportunities
– Challenges
• Why focus on Tripura?
• CUTS consultations on Indo-Bangla trade
– Objectives
– Recommendations
• Developments after the last Agartala consultation
• Review and way forward
Economic Relations between North Eastern
India and Bangladesh: Opportunities (1)
• Bangladesh as a source of connectivity – rail, road and riverine
– between North Eastern India and the rest of India
» India benefits from cheaper movement of goods
» Bangladesh benefits economically by facilitating such
• Bangladesh as a source of connectivity by sea for North
Eastern states with the rest of the world
• India as a source of land connectivity between Bangladesh and
other Asian countries (China, Bhutan, Nepal etc)
Economic Relations between North Eastern
India and Bangladesh: Opportunities (2)
• Current low exploitation of potential for trade implies the
possibility of huge gains if certain preconditions are suitably
• Large untapped capacity for power generation in North Eastern
India which can feed power starved Bangladesh
• Potential for synergies between North Eastern human capital,
markets and natural resources on the one hand and Bangladeshi
entrepreneurship and markets on the other
Economic Relations between North Eastern India
and Bangladesh: Challenges
• Infrastructure related challenges
– To modernise customs stations on both sides of the border and ensure harmony
in processes and facilities
– Make connectivity more viable through better and more modern
communication between customs stations of entry and exit
– Increase the capacity of border roads and sea ports to facilitate movement of
– To work out an integrated system for transport of goods in the North Eastern
sub-region of South Asia based on cooperation among involved countries
• To harmonise and minimise non tariff barriers in the region
• To provide institutional and logistical support for cross border
economic collaboration; and production oriented towards
regional trade
Why Focus on Tripura?
• Accounts for 48 percent of the Indo-Bangla border with
Bangladesh on three sides
– Agartala is close to both Chittagong and Dhaka
• Has registered rapid economic growth over the last decade
• Fledgling manufacturing sector can benefit from Bangladeshi
markets and FDI as well as access to Indian markets through
• Rich in natural gas – potential power exporter to Bangladesh
• Cultural similarity with Bangladesh
• High literacy rates point to a potential source of human capital
CUTS Consultations on Indo-Bangla
Trade: Objectives
• To elicit views of relevant stakeholders about potential for
trade, connectivity and cross border investment in the North
Eastern sub region of South Asia
• To involve business, civil society and government in creating
momentum for economic cooperation in the sub region
CUTS Consultations on Indo-Bangla Trade:
Summary of Contributions
• Guwahati consultation in March 2009 fed into Agartala
consultation in August 2009
• Sub regional independent task force on connectivity and
cooperation constituted in Agartala
• Memorandum submitted by Indian segment of task force to
Indian PM with following recommendations:
Joint private logistical venture between India and Bangladesh to facilitate
connectivity/ transhipment in the sub region
• Upgradation and harmonisation of customs facilities, human capital at
customs stations, and border roads
• Promotion of riverine and maritime connectivity for the sub region through
Bangladeshi ports
• Facilitation of people to people and business interactions through direct air
and bus connections between cities in Bangladesh and capital cities in
North Eastern states
Developments after the Agartala
Consultation of August 2009
Joint Foreign Ministers’ Meeting (September 2009)
• Access provided to Ashuganj port for transporting consignments
relating to power project in Tripura through Bangladesh
• Recognition of the importance of providing permanent riverine and
maritime connectivity to India through Ashuganj and Chittagong
• Indian side agreeing to facilitate connectivity for Bangladesh with
Nepal and Bhutan
• Indian offer to take up construction of Akhaura-Agartala rail link
• Need to harmonise standards and remove para tariff and non tariff
barriers recognised
Bangladeshi PM’s India Visit (January 2010)
Additional agreements:
• To jointly combat terrorism, organised crime etc as covered by
SAARC conventions: economic dividend would accrue through
promotion of peace
• For India to export 250 MW of power to Bangladesh; joint power
plant was also discussed as a possibility
• To provide access for Indian goods to Mongla sea port
For India to provide $1 billion line of credit to Bangladesh for
transport infrastructure and equipment related issues
Tripura CM’s Visit to Dhaka (March 2010)
Key outcomes:
• Proposal to construct a bridge on River Feni to provide South
Tripura connectivity with Chittagong port accepted by
Bangladeshi government
• Bangladesh government would undertake a survey which
would serve as a basis to connect Bangladesh (Akhaura) and
Tripura (Agartala) by rail
• CM declared no opposition to GoI’s intention to sell power
generated through ONGC’s mega power project in Tripura to
Review and Way Forward
• Landmark agreements reached in regard to connectivity, trade in
power, security, elimination of non tariff barriers etc
• Implementation of these agreements has to be jointly supervised
and monitored by both sides
• Initiatives needed:
– stimulation of intra regional foreign direct investment and other cross
border economic collaboration
– joint cooperation in upgrading customs stations and personnel
– development of an integrated transport system in the region through joint
ventures (suitable infrastructure for facilitating adequate cross border
connectivity as well as vehicular fleets empowered to cross borders and
facilitate trade)
• Detailed and authentic information needed for the public on
progress in Indo-Bangla economic cooperation and emerging
avenues thereof
Siddhartha Mitra
Director (Research), CUTS