India-Bangladesh relations reach at significant force multiplier stage

The relations of both the countries find expression in several areas such as sharing inland waterways and power

With more sectors added to the mix every year and deeper engagement in the ones established, Bangladesh-India relations have reached levels where they are significant force multipliers for each other. Straddling political hoop steps, India now supplies almost 2 Gw to Bangladesh, just less than 8 per cent of domestic power generation in the country. Sharing river waters, mostly of the Teesta, has not yet, however, been agreed upon. 

Yet both countries have agreed that a technical team will soon visit Bangladesh to discuss conserving the waters and managing the river. It is a key step just short of an agreement to share the river, which flows from India to Bangladesh with 85 per cent of the catchment area in the former. For Bangladesh, this is a huge vote of confidence in its relations with India and follows a series of rapid confidence-building measures the two countries launched since last year to improve connectivity.

The two countries have agreed on allowing much larger use of their common waterways by all types of ships from both countries. There are 54 rivers flowing through the two countries. Using these rivers will be the basis of forming a Regional Waterways Grid. As a position paper issued by the Ministry of Ports, Shipping and Waterways notes about the grid, it is expected to “enhance economic activity in the region by supporting cross-border trade, aid in trade facilitation, boost economic and transport corridors, and overall regional development”. The grid connects not just these two countries but also Nepal, Bhutan, and, even further ahead, Myanmar. There is economic rationale since India is Bangladesh’s second-largest trading partner (see table 2).

Sharp differences have endured in most sectors, so this coming together is significant, said Ambassador Sanjay Bhattacharya. “Successive Indian governments sought better relations with Bangladesh, and the reciprocal sentiment to not promote anti-Indian positions have helped put our relations on a positive trajectory with momentum to reach greater heights,” he added.

For instance, India’s UPI has reached Sri Lanka but is yet to find its feet in Bangladesh. Customs procedures are quite distinct and so are even health-sector rules. It is only now that Indian health care companies are planning to invest there. The decision to invest in Mongla was kept pending by India for several years. In 2015 the two governments had decided to upgrade the port under a $530 million line of credit from India. China, meanwhile, threatened to walk in.

The two nations are trying to reconcile transit connectivity. Though in 1972 they signed a “Protocol on Transit and Trade” through inland waterways of both countries, voyages did not increase. The protocol essentially said ships from the two countries, whether using the sea or the rivers, would be treated as coastal vessels by each. The catch was only a few routes were identified. Those came to be known as Indo-Bangladesh Protocol routes. In 2018 there were 10, with expansion happening only since 2015, when the Awami League, under Prime Minister Sheikh Hasina, came to power in Dhaka. The passage of ships through each other’s territory was contested. Indian ships cannot use the Indian flag except on these routes, neither are sailors allowed to disembark. India also extends the same treatment.

Before these relaxations the treaty was supposed to be renewed every two years. But political differences had precluded this process. An Asian Development Bank report titled “Using Chattogram Port as a Transshipment Hub for the North Eastern Region of India” noted that despite the treaty “infrastructure development to restore the traditional road, rail, and waterways routes lagged”. The United Nations right to free navigation on mutual river waters, which guides such treaties in Europe, is not a part of the protocol.

After years of dormancy, the protocol was effectively revived in 2015 and it was stipulated that it would run for five years with a provision for its automatic renewal for another five years. This extension gave a long-term assurance to various stakeholders. Also a standing committee on the protocol with a provision for shipping secretary-level talks was written into the protocol. With the current back-to-back visits by Sheikh Hasina to India in June, and the level of attention she was given by the Narendra Modi-led government, there are more ambitious steps in store, including laying out a regional waterways grid.

For New Delhi it makes sense to get this grid through. It connects the Northeast with the rest of India through a series of free routes, removing dependence on the sole rail-cum-road link through the chicken’s neck between the hills of Sikkim and the northern border of Bangladesh with a maximum stretch of just 22 km. For Dhaka, widening the protocol opens up trade connections of the country with regions afield like South India and even Colombo, with minimal paperwork. 

According to T R Ramachandran, secretary, shipping, using the larger network has nearly tripled volumes from India to 5.4 million tonnes per annum by FY23 from 2 million tonnes per annum in FY15. 

The prize is making the route swing through Chittagong, which accounts for more than 90 per cent of the sea trade of Bangladesh. Ramachandran pointed out a team from Bangladesh would look at ways to ascertain the technical feasibility and commercial viability of third-party EXIM trade for the benefit of both countries. “Both sides have also agreed to form a technical team immediately to study inclusion of the Chandpur-Chittagong stretch as one of the protocol routes”.

Compared to these challenges, power-sector connectivity was easier. The Maitree super-thermal power project was constructed by the Bangladesh-India Friendship Power Company as a 50:50 joint venture between the Bangladesh Power Development Board and NTPC with a capital investment of about Rs 20,000 crore. The first unit of the project was commissioned in September 2022 while the second unit was inaugurated in November 2023. From Godda in Bihar, Adani Power is selling about 1.6 Gw to Bangladesh. Both these plants, despite initial political opposition, have been successful. 

As Bhattacharya put it, “the logic of the Indo-Pacific makes Bangladesh a key partner and a vector in the Bay of Bengal region to advance towards developed country status while it showcases its development and democracy to the global community”.