Bangladesh-India Shipping Secretary Level Meeting: Boosting Trade and Regional Connectivity

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The two-day shipping secretary-level meeting between Bangladesh and India commenced in Dhaka on December 19, 2023. The discussions encompassed three high-level dialogues between the Governments of India and Bangladesh in Dhaka, namely the Shipping Secretary Level Talks (SSLT), the 22nd Meeting of the Standing Committee (SCM) under the Protocol on Inland Water Transit & Trade (PIWT&T), and the 3rd Meeting of the Inter-Governmental Committee (IGC) on the utilization of Chattogram and Mongla Ports for the reciprocal movement of goods. These engagements concluded successfully in Dhaka, Bangladesh. The delegation representing the Shipping Secretary Level Talks and the 3rd Inter-Governmental Committee meeting was led by Shri T.K. Ramachandran, Secretary, Ministry of Ports, Shipping & Waterways, from the Indian side, and Mr. Md. Mostafa Kamal, Senior Secretary, Ministry of Shipping, from Bangladesh. For the 22nd Standing Committee meeting on PIWT&T, the delegation was headed by Shri Sanjay Bandopadhyaya, Chairman, IWAI, from India, and Sheikh Md. Sharif Uddin, Additional Secretary, Ministry of Shipping, from Bangladesh. In the context of a globally disrupted supply-chain, characterized by distortions, these diplomatic approaches play a pivotal role in fostering a renewed paradigm of collaboration within the domain of connectivity and trade.

Bangladesh and India share deep-rooted connections of history, language, and culture, fostering a relationship that transcends mere strategic partnership. India demonstrated its support for Bangladesh by swiftly recognizing its independence in December 1971 and establishing diplomatic relations. This enduring bilateral relationship is characterized by principles of equality, trust, sovereignty, and mutual understanding. Bangladesh holds a significant position as India’s largest trading partner in the subcontinent, representing the second-largest export partner with a substantial share of 12% in total exports to Bangladesh. In the fiscal year 2022-2023, the overall trade turnover reached US$ 14.22 billion. Regarding exports from India to Bangladesh, a diverse range of 6,050 commodities were exported in FY23, totaling US$ 12.20 billion, compared to US$ 16.15 billion in FY22. Key export items include various commodities (US$ 1.17 billion), cotton yarn (US$ 1.02 billion), petroleum products (US$ 816 million), other cereals (US$ 556 million), and cotton fabrics, made-ups, etc. (US$ 541 million) in FY23. During April-May 2023 alone, exports to Bangladesh amounted to US$ 1.67 billion. On the import side, India received 1,155 commodities from Bangladesh in FY23, accounting for US$ 2.02 billion, slightly higher than the US$ 1.97 billion in FY22. Principal imported items from Bangladesh include RMG cotton (US$ 510 million), cotton fabrics, made-ups, etc. (US$ 153 million), RMG manmade fibers (US$ 142 million), spices (US$ 125 million), and jute (US$ 103 million) in FY23. The imports from Bangladesh during April-May 2023 amounted to US$ 278 million.  Implementing such arrangements will support the growth and development of trade and commerce.

The Protocol on Inland Water Transit and Trade between Bangladesh and India, in accordance with Article VIII of the trade agreement between the two nations, was established to facilitate mutually beneficial arrangements for utilizing their waterways for commerce and the passage of goods. The agreement allows for the movement of goods between two locations within one country and to third countries through the territory of the other, based on mutually agreed-upon terms. The PIWT&T, initially signed in 1972, has remained in effect continuously and was set to expire on March 31, 2020. Key features of the protocol include specified routes, such as Kolkata-Chandpur-Pandu-Silghat-Kolkata and Kolkata-Chandpur-Karimganj-Kolkata, and five Ports of Call on each side to support vessels engaged in inter-country trade. The term “vessel” refers to watercraft registered under the Inland Shipping Ordinance, 1976 for Bangladesh vessels and the Inland Vessels Act, 1917 for Indian vessels. The protocol permits vessels to purchase fuels and essential supplies at designated points, and voyage permission must be obtained from the Competent Authorities appointed by the respective governments. Common freight rates, fixed mutually by Competent Authorities, apply to operators in both countries for inter-country trade and transit traffic. Port dues may be levied by competent authorities in either country on vessels engaged in inter-country trade. The Competent Authorities for Bangladesh are the Bangladesh Inland Water Transport Authority, while for India, it is the Inland Waterways Authority of India.

Before this development, India had received authorization for commercial transport of goods to its own region through Bangladesh’s Chattogram and Mongla ports. The National Board of Revenue (NBR) issued a permanent transit order in April 2023 for this purpose. The NBR order specifies that customs procedures for transit and transshipment goods will adhere to the Standard Operating Procedure (SOP) outlined in the Agreement on the use of Chattogram and Mongla Ports for Movement of Goods (ACMP) between Bangladesh and India. This transit order marks the permission for the neighboring country to transport goods to its own territory using the two Bangladeshi ports going forward. The order establishes 16 transit routes, including Chattogram-Akhaura-Agartala, Mongla-Akhaura-Agartala, Tamabil-Dauki, Sheola-Sutarkandi, and Bibirbazar-Shrimantpur routes.

Bangladesh and India jointly utilize water and coastal routes for the transportation of cargo and passengers along the Indo-Bangladesh Protocol Route and Coastal routes. These routes play a crucial role as they offer alternative connectivity to the North Eastern Region of India through Bangladesh. Notably, the cargo handled by the Indo-Bangladesh Protocol (IBP) route on the Indian side has seen a remarkable increase of 170%, rising from 2 MMTPA in 2014-15 to 5.4 MMTPA.

The recent series of discussions during three key meetings aimed at resolving trade issues and fostering Inland Water Transport (IWT) and Coastal Shipping between the two nations have yielded substantial decisions with far-reaching implications for regional trade and security.

In the Shipping Secretary Level Talks, deliberations covered critical matters such as facilitating visa issuance, providing shore-leave facilities, and ensuring the repatriation of seafarers. The agreement was reached to designate land routes at LCS Radhikapur (Birol) and Hodibari (Chilahati) to enhance trade and connectivity. Additionally, the inclusion of Dhamra Port as a Port of Call under the Coastal Shipping Agreement was explored. Bangladesh expressed its willingness to utilize the Pangaon container terminal for transshipment of containers until the Ashuganj Inland Container Terminal becomes fully operational. Furthermore, the establishment of a drop-in center for Bangladesh near Kolkata within the next four months was decided. A technical team from Bangladesh will investigate the technical feasibility and commercial viability of third-party EXIM trade for the mutual benefit of both countries. An agreement was made to extend the IBP route, designating Safardighi as a new port of call under PIWT&T. Both nations agreed to promptly form a technical team to assess the inclusion of the Chandpur-Chittagong stretch as an IBP route under PIWT&T.

During the Standing Committee meeting on PIWT&T, Bangladesh committed to establishing a joint committee to implement a common Automatic Identification System (AIS) on the IBP route, enhancing vessel navigation and tracking. The inclusion of the Mongla-Jamtola stretch for passenger and cruise vessels to visit the Sunderbans area in Bangladesh was also agreed upon. Furthermore, Bangladesh is set to submit a proposal for the development of IBP routes 5 & 6 and 9 & 10 on an 80:20 sharing basis, subject to examination by the Indian side for potential implementation.

In the Inter-Governmental Committee meeting, both countries agreed to consider the inclusion of Payra Sea Port in the Agreement on the use of Chattogram and Mongla Ports for Movement of Goods (ACMP) for the movement of goods between the two nations. Additionally, the route from Sabroom via Ramgarh and vice versa was explored as an additional route under ACMP, contingent upon the availability of necessary port, customs, and related facilities. The discussions also addressed issues related to the expedited berthing of vessels/barges using ACMP trade routes. These comprehensive deliberations and agreements are expected to significantly contribute to the enhancement of regional trade and security.

The recent two-day Shipping Secretary Level Meeting between Bangladesh and India in Dhaka marked a significant step in strengthening their enduring partnership. The discussions covered critical dialogues on Inland Water Transit & Trade and the utilization of ports for reciprocal movement of goods. Led by high-ranking officials, these talks addressed trade challenges and opportunities, emphasizing connectivity enhancements and resolving logistical issues. The agreements, including the recent authorization for India’s commercial transport through Bangladeshi ports, signify a commitment to boosting regional trade. In the face of a disrupted global supply chain, these strategic measures underscore a renewed collaboration for increased connectivity and trade resilience between the two nations.

– Syed Raiyan Amir is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).

Published in The Geopolitics [Link]