Friday, August 22, 2014

Sushma Swaraj’s Bangladesh Visit: A Good Start to “Neighbours First” Policy in Dhaka

Monish Gulati

Introduction

Termed as a “goodwill visit”, External Affairs Minister Sushma Swaraj led her first international visit to Bangladesh on 25 June accompanied by Foreign Secretary Sujatha Singh and other senior officials. The visit marked the first ministerial-level contact between the new government in New Delhi and the Bangladeshi leadership. The EAM, apart from meeting her Bangladeshi counterpart, Abul Hassan Mahmood Ali, also called on the Bangladeshi President Abdul Hamid and PM Sheikh Hasina. Separate interactions were held by the EAM with Bangladesh Nationalist Party (BNP) chief Khaleda Zia, former Bangladesh President Irshad’s wife Raushan Irshad and Prime Minister’s international affairs adviser Professor Gowher Rizvi. Her agenda included trade and investment, improving connectivity, better management of the borders, security, ratification of the Land Boundary Agreement (LBA), energy and people-to-people contacts. This article reviews the outcome of the visit and looks at the road ahead for the two countries as India gives shape to its “Neighbours First” policy.

The Visit

As India-Bangladesh relations in the past few years have been constrained by issues that have proved a test for the Centre- State relations, it was not therefore surprising that the EAM ahead of her two-day visit to Bangladesh, had a publicised talk with the West Bengal Chief Minister Mamata Banerjee. The state of West Bengal has a position on the two main issues that were on the EAM’s agenda; sharing of Teesta river water and the LBA. This was a signal, perhaps, to state governments of the Modi government’s commitment to strengthen the federal structure of the country. It was also an indication to Bangladesh of the complicated, political and emotive nature of the two issues and that their settlement was a “work in progress”. The EAM assured Bangladesh that efforts were on to evolve a national consensus on these issues. At the same time, during the run-up to the visit, Bangladeshi High Commissioner Tariq Karim had met with Home Minister Rajnath Singh and Water Resources Minister Uma Bharti to discuss the LBA and Teesta agreement respectively underlining the importance of the two issues for Bangladesh.

During the visit, the Bangladeshi side was apprised of India’s decision to ease tourist visa norms for Bangladeshi nationals under the age of 13 and above 65 years. They will be now given multiple entry visas for five years instead of one year. India has also decided to give additional 100 megawatts power to Bangladesh from the gas-based power project at Palatana in Tripura. Swaraj also announced a grant of Rs 60 crore for implementation of various projects in Bangladesh in the current financial year. During her meeting with Hasina, the EAM presented a plan for setting up a ‘Bangladesh Bhawan’ at Shantiniketan in West Bengal.

The two countries have decided to increase the frequency of Maitree Express between Kolkata and Dhaka and the trial runs between Dhaka-Shillong bus service was also discussed at the meeting of two Foreign Ministers. The Bangladeshi Foreign Minister, in a separate press conference, said Bangladesh has decided to send 10,000 tonne foodgrains to Tripura and the consignments will start with small truckloads as the roads were not geared to take big trucks.

Despite the EAM being “satisfied” with the outcome of her current visit, it would be fair to say that both sides took that extra care to ensure that contentious issues were skirted and the atmospherics of the goodwill visit not disturbed. Some key milestones in the Indo-Bangladesh relations yet to be crossed involve issues such as trade, connectivity, illegal migration and security cooperation.

Trade & Commerce

The two-way trade between India and Bangladesh stands at $6.6 billion for 2013-14 with India’s exports at $6.1 billion and imports from Bangladesh at $462 million. Indian investment in Bangladesh amounted to $2.5 billion in 2013. The industry body, Confederation of Indian Industry (CII) recently stated in a note that India-Bangladesh trade could double to $10 billion by 2018 if bottle-necks such as non-tariff barriers and infrastructure-related issues are resolved. Bangladesh is not happy with the balance of trade and would like India to increase the volume and the range of the items being imported from the country.

There is also a dire need to adopt a comprehensive approach to revamping not only the physical infrastructure of all modes of cargo transport (road, rail, air, inland waterways and maritime) but also non-physical soft infrastructure such as cross-border transit facilitation measures, customs clearance supported by appropriate policies and regulations not just between the two countries but for the entire subcontinent trading bloc. According to a report by CUTS International, the cost of doing trade in the region is among the highest in the world and the prime deterrent of trade among South Asian countries.
Another measure to strengthen bilateral trade relations is to adopt a regional perspective on movement of goods, which will increase trade volumes, decrease costs, increase competitiveness, and open up fresh areas for collaboration in manufacturing etc.1 A CUTS International research points out that, currently, most regionally traded product categories are barely half their true potential. According to 2013 trade data, an estimated US$20 billion worth of regional trade is lost because of reasons other than transport inefficiencies. Asymmetries in market information, frequent complaints of defaults on trade-related payments and perceived risk factors have discouraged traders from exploring regional markets. Measures such as financial connectivity, business-to-business interactions within the region provide significant stimulus to trade.

Connectivity

The CUTS study estimates that potential savings on trade costs from transport reforms, both physical and non-physical, could be US$4.6 billion annually. This is roughly one-fifth of the total value of intra-regional trade.The connectivity between the two countries needs to exploit the multi-modal potential of rail, road and inland water transport to lower transportation costs and aid trade. Despite years of negotiations, use of rail both to trade with Bangladesh and transit trade to India’s NE is yet to take shape. NE-India is virtually a landlocked territory and traffic from NE-India is required to travel 1400-1650 km to reach Kolkata Port. If transit is allowed, distances would be around 450-700 km. At present, goods are transshipped at the border between trucks.

There is no inter-country freight train except a passenger train between Dhaka-Kolkata. Rail wagons are pulled by Indian Locos up to the border and Bangladesh Locos pull these to destinations inside. Ideally there should be rail corridors across Bangladesh and Nagaland and Manipur facilitating movement of goods between India, Bangladesh and Myanmar. The Indian and Bangladeshi governments will start work early next year on a 15 km railway track linking Tripura's capital Agartala with Bangladesh's southeastern city of Akhaurah.2 Lack of progress on the rail links has affected proposed regional rail links such as the Trans-Asian Railway (TAR).

There is also some apprehension in Bangladesh that India will not facilitate Bangladesh in its trade with Bhutan and Nepal (including transit trade) along the Asian Highway and the BCIM connectivity through Manipur maybe subject to conditions. Bangladesh also expects on basis of purely economic considerations 50% Nepalese (Kathmandu-Kakarvita/Banglabandha-Mongla) and 100% of Bhutanese (Thimpu-Phuentsholing/ Jaigaon- Burimari-Mongla) international traffic should be directed through Mongla Port; which has not happened. Accordingly, Bangladesh is desperate to develop connectivity to Myanmar and China through the Cox’s Bazar and Teknaf route (Teknaf-Maungdaw-Sittwe and Balukhali-Gundhum- Bawlibazar link road). These have not progressed as planned possibly due to the Rohingya issue in the area. The trust deficit in this regard would have to be overcome by the two countries.3



Figure: 1- Trans-Asian Railway (TAR)


Security

The BJP manifesto promised zero tolerance to cross-border terrorism, and also that it would take steps on illegal migration. These two issues will directly impinge on India's relations with Pakistan and Bangladesh. The EAM indicated New Delhi's willingness to extradite Nur Hossain, a serial-murder suspect who is currently in the custody of West Bengal police, considered as the first test for the extradition treaty signed between New Delhi and Dhaka last year. In a positive development, both nations reaffirmed their commitment not to allow their soil to be used for terror and disruptive activities directed against each other.

Just prior to the EAM’s visit, a Bangladesh court's order sentencing eight Islamic militants including Mufti Hannan, the Harkat-ul Jihad Islami (HuJI) head who is accused of terror attacks in India as well, was seen a signal from the Bangladeshi government to continue its cooperation on security and counter-terrorism. The militants were sentenced after the court found them guilty over deadly attacks during traditional celebrations of Bengali New Year in Dhaka in 2001.4

Illegal Migration

Given the policy position of the Modi government on the issue of illegal migration, it will be the most ticklish issue the two nations will have to negotiate as it has the potential to derail cooperation and mutual understanding. There is a requirement of great deal of pragmatism on the part of both the countries to resolve the issue amicably. Bangladesh would have to understand India’s politico-economic compulsion and urgency to check illegal migration from Bangladesh, while India would have to take into account the physical, political and social challenges the Bangladesh government faces on the issue.

The Bangladeshi stand on the issue in the public space is quite obtuse. Foreign Minister A H Mahmood Ali in an interview to an Indian newspaper said that during EAM’s visit there was no mention of illegal migrants and hence the issue is irrelevant. 5 In fact, he felt the Indian announcement of the visa liberalisation indicates that people from Bangladesh are welcome in India. The EAM in her speech at a think tank did talk about a legal and administrative regime to discourage illegal movement of people.
Analysts feel that Hasina is not keen that Modi lives up to his poll promise of "pushing out Bangladeshi illegals" because any such pushback, however symbolic, would complicate bilateral relations and put huge domestic pressure on the Awami League government to get tough with India.6 At the same time, an anti-Indian groundswell will be an opportunity for Khaleda Zia and could serve as a rallying point for her party and alliance, and get them back on the streets. Hasina's government discourages illegal migration and promotes legal labour exports to any country that is interested as legal migrants send back significant remittances which are Bangladesh's second-biggest source of foreign exchange after garment exports. It is this position that should serve as the starting point for a bilateral effort to manage the issue of illegal migration. Few pointers could be obtained in this regards from how US and Mexico have grappled with a problem of similar nature.

Defence Cooperation

Another issue that usually does not figure in the bilaterals but on which India could take a lesson from the Chinese is that of cooperation on arms supply and joint production China is a major arms provider to each of India’s neighbours with the exception of Bhutan. Bangladesh recently has made several arms purchases and has announced a defence budget of BTD164.6 billion (USD2.1 billion) for fiscal year (FY) 2014-15, a year-on-year increase of 8.4%. Pakistan has already sensed the opportunity and Heavy Industries Taxila (HIT), Pakistan's state-owned tank and armoured vehicle manufacturing unit, has offered to modernise Bangladesh's ageing T-54/Type 59 and Type 69 main battle tanks (MBTs) to the Al-Zarrar configuration "as per Bangladeshi requirements".

Conclusion

Besides the more discussed issues of sharing of Teesta river water and the LBA, several related issues such as trade, connectivity, illegal migration, security cooperation need to be addressed, progressed and resolved to ensure that the Indo-Bangladesh relations are maintained on a positive trajectory. The EAM has provided a good start to India’s “neighbours first” policy in Dhaka, the challenge would be to sustain the goodwill.

Endnotes
  1. Bipul Chatterjee and Joseph George. ‘We must improve trade connectivity in South Asia, CUTS International,’ June 26, 2014. http://www.eastasiaforum.org/2014/06/26/we-must-improve-trade-connectivi...
  2. ‘Work on new India-Bangladesh railway link from 2015,’ The Times of India, June 17, 2014. http://timesofindia.indiatimes.com/india/Work-on-new-India-Bangladesh-ra...
  3. Lt Col (Retd) AFM Khairul Basher. ‘BCIM Corridor: The gateway of South Asia,’ The Daily Sun, June 18, 2014
  4. Dipanjan Roy Chaudhury. ‘Swaraj To Reach Bangladesh Today - HuJI Sentencing Comes at Right Time for New Delhi-Dhaka Ties,’ The Economic Times, June 25, 2014. http://epaperbeta.timesofindia.com/Article.aspx?eid=31816&articlexml=SWA...
  5. Shubhajit Roy. Interview of Bangladesh Foreign Minister A H Mahmood Ali , Indian Express, 28 June 2014. http://southasiamonitor.org/detail.php?type=n&nid=8431
  6. Subir Bhaumik. ‘Narendra Modi sending back illegal immigrants, pushing water pacts hold key to Dhaka politics,’ The Economic Times, May 21, 2014. http://economictimes.indiatimes.com/opinion/comments-analysis/narendra-m...
(The author is an independent analyst based in New Delhi)

Published Date: 12th August 2014, Image source: http://www.thedailystar.net
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Vivekananda International Foundation)

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