Three years after Tata Group called off its $3-billion investment plan in Bangladesh, the government in Dhaka is now wooing the Indian conglomerate to reconsider the project, citing better political and business climate.
“We did not have a elected government when the Tatas came. The ruling regime was unstable and was anti-India. It considered the investment to be an Indian one, rather than an investment for common good. We want the company to reconsider the project here,” said Muhammad Faruk Khan, commerce minister of Bangladesh.
Tata had signed a memorandum of understanding with Bangladesh in 2004 for one of the largest foreign direct investments (FDI) in that country. It included setting up of a 2.4-million tonne steel mill, a 1-million tonnes fertiliser factory and 1,000-Mw gas-fired and 500- Mw coal-fired power plants. However, due to political instability and lack of availability of natural resources, the Tatas were forced to move out of the neighbouring country in 2007.
“Tatas are one of the most reputed groups in the world, and if they come back, it would be beneficial for Bangladesh as well as the company. Moreover, we want Indian firms to explore gas here. Since we have huge coal deposits, companies can invest in the power sector, too ,” he added.
He assured that the political climate had changed in the country and the process would be smoother for foreign investors. Meanwhile, the Tata group didn’t respond to a mail sent by Business Standard.
Khan expressed hope that in the coming financial year, more Indian companies would enter Bangladesh. “This is a very good opportunity for both nations to improve trade relationships, and governments on both sides have the political will to do it. The investment from Indian firms is expected to touch $1 billion next fiscal,” he said. Bangladesh attracted overall investments worth $2 billion in the last two years, of which investments from India were around $400 million.
“There are a lot of opportunities for Indian firms in power, infrastructure and textile sector. In October, we signed MoUs with five companies and this month we have signed a deal with an Indian firm,” he added.
Bangladesh industry leaders, too, seemed optimistic about Indian investments. “There is a vast opportunity for Indian firms to invest in Bangladesh. We are open minded regarding this. But regarding imports from Bangladesh, we demand further concessions and removal on non-tariff barriers from the Indian government,” said Mir Shahabuddin Mohammad, secretary of the Federation of Bangladesh Chambers of Commerce and Industry.
