Modi’s Dhaka Visit: A Game Changer For Regional Connectivity? – Analysis


By Rupak Bhattacharjee*

Connectivity is one area of cooperation in which India and Bangladesh have made real progress during the visit of Prime Minister Narendra Modi to Dhaka. Clearly displaying mutual trust and confidence, the two neighbouring nations decided to connect each other through road, rail and sea. Both the sides agreed to open new road linkages and revive the British-era transport networks, especially railways and waterways.

New Delhi and Dhaka had been engaged in hectic negotiations to upgrade cross-border connectivity in recent years. India wants transit facilities through the territories of Bangladesh for movement of goods and people from and to northeastern states, which are isolated from the country’s mainland. Bangladesh too has been seeking better regional connectivity, including with India, since 2010.

During the bilateral talks, Prime Minister Modi and his Bangladesh counterpart Sheikh Hasina reiterated that greater connectivity is vital for the development of two countries and South Asia. Modi noted that “connectivity is the catalyst for deeper engagement”, while Hasina said connectivity across the region would reduce inequalities and maximise welfare gains.

As part of a major initiative under sub-regional cooperation, the two countries finalised a motor vehicle agreement between Bangladesh, Bhutan, Nepal and India (BBIN). The pact, which was approved by the Hasina cabinet soon after Modi’s visit, seeks to facilitate movement of cargo from all four countries using the transit corridors. The agreement is set to boost trade, investment and people-to-people contact among the four South Asian countries.

Finalisation of the BBIN agreement has resulted in a win-win situation for both the countries. Among other gains, it was a diplomatic victory for the Modi government after Pakistan scuttled the initiative during the November 2014 South Asian Association for Regional Cooperation Summit citing domestic reasons. Bangladesh stands to benefit immensely as the country is poised to emerge as South Asia’s gateway to Southeast Asia through much-needed renovation of its transport infrastructure.

India granted a fresh $2 billion soft loan to Bangladesh for use in connectivity projects. Reports suggest that Dhaka had already identified 15 projects in consultation with the Indian government for this purpose. Ten of them are related to the up-gradation of road, rail and port in Bangladesh. The proposed projects could bring about a sea change in sub-regional connectivity when they become fully operational.

The agreements on connectivity that were inked on June 6, included: Kolkata-Dhaka-Agartala and Guwahati-Shillong bus services; Kolkata-Khulna train service; use of Chittagong and Mongla sea ports and coastal shipping between the two countries. Besides, a trade agreement was signed and a protocol under it —Protocol on Inland Water Transit and Trade, was renewed for another five years.

The opening of two bus routes will accelerate the process of northeastern states’ integration with India’s mainland. To overcome its geographical constraints, Tripura has long been demanding a direct bus service between Agartala and Kolkata through Bangladesh. The total distance between Kolkata and Agartala via Guwahati is 1,650 km. But with the opening of a new route via Bangladesh, the distance will be reduced to just about 600 km.

This bus service has provided huge relief to the people of Tripura, which is virtually Bangladesh-locked. The Manik Sarkar government, that enjoys warm ties with the Awami League (AL) government, is also pitching for direct bus service between Tripura and other northeastern states through Bangladesh for easy movement of people in the region.

The Guwahati-Dhaka via Shillong and Sylhet bus service was formally launched after two successful trial runs. Following the opening of this bus route, trade and historic ties between the two key northeastern states — Assam and Meghalaya, and Bangladesh are bound to witness an upswing.

Efforts are on to open bus services on the Kolkata-Chittagong, Shillong-Chittagong, Kolkata-Khulna, Kolkata-Jessore and Silchar-Karimganj-Sylhet routes. Till Modi’s Dhaka visit, India and Bangladesh had only two regular bus services — Kolkata-Dhaka and Agartala-Dhaka.

India and Bangladesh intend to develop overall connectivity between them in the next few years. In its bid to improve cross-border connectivity, India is currently working on several infrastructure projects, including construction of a bridge over the Feni river, to access Chittagong port, building a 15 km railway link between Agartala and Akhaura and a 70 km-long road from Sabroom to Chittagong port, and renovating Ashuganj port in Bangladesh.

Both the governments are keen to augment railway connectivity, particularly to revive the links that existed before the 1965 India-Pakistan war. Responding to the popular demand of opening a train service between Khulna and Kolkata, the two sides have agreed to initially operate this once in a week via the longer Gede-Darsana route.

In a recently held inter-governmental railway meeting, India sought access to Bangladesh’s railway network for transportation of goods to and from eastern and northeastern states. India urged Bangladesh for immediate introduction of container train services to avoid lengthy procedures of border clearance of goods and minimise the transaction cost of trade. The two countries underscored the need to upgrade the existing interchange points at Rahanpur in Bangladesh and Singabad in India.

The two countries also signed a coastal shipping agreement to facilitate cheaper and faster cargo movement between them. So far, Bangladesh has been importing various essential commodities from India through a long and arduous route. The ships carrying goods reach Bangladesh via Singapore or Colombo, as they could not ply between the two countries in the absence of an agreement.

But under the new pact, Indian vessels will be allowed to carry goods using Bangladesh’s Chittagong and Mongla ports. Bangladeshi ships could now carry goods using the Indian ports like Haldia, Paradip and Vishakhapatnam. This agreement will substantially reduce freight charges, bring down the price of necessary items, improve utilisation of port capabilities, minimise the load on busy roads and increase volume of trade between India and Bangladesh.

There is enough potential to enhance waterways connectivity since both the nations share more than 1,100 km riverine border. In the shipping agreement, some river ports of the two countries, including Bangladesh’s Khulna, Narayanganj, Sirajganj and Ashuganj, and India’s Kolkata, Karimganj, Pandu and Shilghat are named as ports of call.

Both the sides agreed to open shipping routes under the Protocol on Inland Water Transit and Trade which was inked in 1972 for boosting trade and commerce through river routes. In view of the Assam government’s persistent demand to revive the old waterway links between the northeast and Bangladesh, talks are on to start steamer service from Guwahati to Dhaka.

The expansion of sub-regional connectivity is about to open the floodgate of trade opportunities, increase investment and strengthen people-to-people relations in South Asia. Some of the pacts on connectivity signed during Modi’s recent Dhaka visit are going to benefit landlocked Nepal and Bhutan in addition to India and Bangladesh. Moreover, it will pave the way for South Asia’s economic integration with dynamic Southeast and East Asia, making the northeast and Bangladesh as hubs of trade, transit and connectivity.

Deepening of bilateral cooperation in the arena of connectivity has strategic and security dimensions too. The agreement on the use of Chittagong port assumes significance against the backdrop of growing Chinese involvement in the up-gradation of Bangladesh’s maritime infrastructure. India has agreed to enhance the capability of Bangladesh’s busy Chittagong port in an effort to keep its strategic adversary China away from the Bay of Bengal region.

The agreements on connectivity have also taken care of Bangladesh’s security concerns. The word “transit” has been removed from the bilateral discourse because of the sensitivity of the issue in Bangladesh. The ruling AL is careful not to allow the country’s ultra-rightist and reactionary forces to indulge in jingoism.

*Dr. Rupak Bhattacharjee is an independent analyst based in Delhi. He can be reached at [email protected]

South Asia Monitor

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