The Limitless Potential Unlocked by the Bangladesh-Bhutan Transit Agreement


Bhutan’s momentous recognition of Bangladesh on 6 December 1971 was a watershed event that solidified a unique friendship based on mutual respect and shared cultural links. 

This historic move not only recognised Bangladesh’s sovereignty, but also underlined Bhutan’s persistent commitment to regional peace and collaboration.

The relationship between these two countries is a remarkable illustration of flawless diplomacy at its best, linked in a cordial and cordial atmosphere that is genuinely unmatched.

Bangladesh and Bhutan inked a transit agreement on 23 March 2023 to enable the landlocked South Asian country to transfer its purchased and export-oriented products via ports, namely the Mongla seaport.

Bhutan would be allowed to utilise Bangladesh’s land, waterways, railways, and airways to transport commodities to and from other countries under the “Agreement on the Movement of Traffic in Transit and Protocol.”

According to Bangladesh’s trade ministry, Bangladesh would be able to utilise Bhutanese territory to export commodities to other nations such as China. The announcement comes years after the two countries discussed a transit facility.

Bhutan would also pay taxes and charges to Bangladesh for utilising the ports under the agreement. As a result, the transit facility between Bangladesh and Bhutan is a significant and historic step toward regional integration and collaboration, highlighting a pivotal point in the histories of both countries.

The agreement encourages collaboration and a sense of solidarity between the two countries, resulting in unparalleled levels of harmony and cooperation that will benefit both countries’ people. Moreover, the deal has created some new chances for both nations.

To begin, both nations will gain from the agreement in the transportation sector, since Bhutanese enterprises may utilise Bangladeshi trucks and other forms of transportation to convey products.

Moreover, the seamless transfer of products and people will be unprecedented, leading to a more efficient and cost-effective transportation system that will improve connectivity and spur regional growth.

On the other hand, the arrangement will raise Mongla Port’s utilisation, which will immediately improve the seaport’s capabilities, and Bangladesh will earn more income.

To add to that, the agreement will result in unprecedented economic development for both nations, as well as greater trade and investment possibilities, resulting in a successful and sustainable future for the area.

Second, under the transit agreement, both countries will be able to export and import goods to and from other countries.

Meanwhile, as a goodwill gesture, two nations signed a preferential trade agreement (PTA) since the landlocked country was the first to acknowledge Bangladesh’s independence.

Under the PTA, 100 different categories of Bangladeshi commodities get preferential tariff treatment when exported to Bhutan. 34 Bhutanese commodities are being treated the same way upon their arrival into Bangladesh.

Additionally, the transit facility will demonstrate the commercial connection and pave the door for future opportunities.

Ultimately, the free transit system would strengthen cultural and personal links between the two nations by making travel simpler for tourists and allowing individuals from Bhutan to visit Bangladesh and vice versa.

This will increase cultural exchange and build understanding between the two countries.

Besides, the transit facility would facilitate significant cultural interchange between Bangladesh and Bhutan, as individuals from both nations will be able to freely visit and experience each other’s distinct customs and ways of life.

The transit infrastructure, on the other side, would open up new chances for the tourist industry, since Bhutan is one of the most profitable destinations for Bangladeshis.

As a result, by increasing and strengthening connection, the two nations might attract a large number of Bhutanese visitors.

Fourth, the transit will open up new potential for commerce and investment between Bangladesh and Bhutan. The free transit system will foster a business-friendly atmosphere by lowering transportation costs, eliminating delays, and facilitating the seamless flow of products.

This, in turn, will boost economic development, generate employment, and raise people’s living standards in both nations.

Hence, the facility will foster pioneering efforts toward sustainable development by encouraging environmental protection and the use of green technology that will benefit both nations and the area as a whole.

Finally, the agreement would assist to maintain regional peace and stability by making it simpler for Bangladesh and Bhutan to collaborate.

It will develop a climate of solidarity and trust, encouraging both nations to collaborate toward shared objectives such as regional peace and security.

Notably, Bhutan aids Bangladesh in a variety of regional and global forums while also producing hydropower.

As a result, the transportation facility will be welcoming and comfortable, responding to the requirements of individuals from both nations while also establishing a welcoming atmosphere that fosters mutual understanding and respect.

Moreover, the agreement will be a significant milestone in South Asia’s growth, with the potential to serve as a model for other nations in the area to emulate.

– S. M. Saifee Islam is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).

Published in The Business Standard [Link]