CBGA Annual Review Series: How Was Bangladesh-India Partnership in 2023?

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Ties between Bangladesh and India go beyond traditional parameters of interests and perspectives. The partnership of the two nations is evident in their intertwined history, common heritage, linguistic and cultural affinities, and shared enthusiasm for music, literature, and the arts. These shared elements serve as the foundation for their multidimensional and expanding relations. Geographically, India and Bangladesh find themselves in strategic proximity, providing a golden opportunity for the enhancement of connectivity links and economic collaboration.

Regular high-level exchanges, visits, and meetings, coupled with extensive people-to-people interactions, further reinforce the bilateral ties. Landmark visits by Prime Minister Sheikh Hasina to India in January 2010 and 2022 and Prime Minister Manmohan Singh to Bangladesh in September 2011 marked a turning point in their relationship. President Pranab Mukherjee’s visit in March 2013 underscored the utmost importance that India places on its association with Bangladesh, emphasizing principles of equality, partnership, and mutual growth. The diplomatic momentum was maintained with External Affairs Minister Smt. Sushma Swaraj’s and S. Jaishankar’s standalone visit to Bangladesh in June 2014, further solidified the close and amicable rapport between the two nations. The pinnacle came when in 2021 the Indian Prime Minister Narendra Modi came to Bangladesh to take part in Bangladesh’s 50th Independence Day celebrations. Over the past four decades, political, economic, trade, and cultural relations have been consistently strengthened, supported by a comprehensive institutional framework fostering bilateral cooperation.

Notably, the shared management of 54 rivers and collaborative efforts in conserving the Sunderbans ecosystem showcase the commitment to preserving common biodiversity heritage. Economic relations between Bangladesh and India have witnessed substantial progress, entering a new phase of collaboration. India’s diverse exports to Bangladesh, including cotton yarn, petroleum products, cereals, and cotton fabrics, reached a noteworthy $12.20 billion in fiscal year 2023. Conversely, imports from Bangladesh, comprising items like RMG cotton, cotton fabrics, man-made fibers, spices, and jute, amounted to $2.02 billion in the same period. The sustained growth in trade is evident, with exports and imports in April-May 2023 alone reaching $1.67 billion and $278 million, respectively. The implementation of the Comprehensive Economic Partnership Agreement (CEPA) is on the horizon, reflecting a shared commitment to further economic collaboration between the two nations. Besides, the commencement of the Swadhinata Sarak, a road infrastructure initiative, is anticipated to play a pivotal role in enhancing connectivity between India and Bangladesh. These developments signify the deepening bonds between the two nations, extending beyond strategic interests and reflecting a strengthening sense of fraternity.

Amidst a global landscape marked by deteriorating relations among nations due to various reasons, ranging from wars to economic tensions, the enduring friendship between Bangladesh and India stands out as a historical testament. In the subsequent sections, we will delve into the developments that unfolded in 2023, highlighting the resilience and continuity of this longstanding relationship.

Date Category Key Development
March 18, 2023 Energy Collaboration Inauguration of the Indo-Bangla Friendship Pipeline, facilitating the import of petroleum products from India to Bangladesh.
April-May 2023 Economic Relations Exports from India to Bangladesh reaching $1.67 billion, and imports from Bangladesh to India at $278 million during this period.
July 11, 2023 Economic Relations Initiation of Rupee-Taka trading to reduce reliance on the US dollar.
August 27, 2023 Infrastructure Development Joint initiation of the Knowledge Park in Chattogram by the High Commissioner of India and H.E. Mr. Zunaid Ahmed Palak.
November 1, 2023 Infrastructure Development Inauguration of the Akhaura-Agartala Cross-Border Rail Link, spanning 12.24 km across Bangladesh and Tripura.
December 19, 2023 Trade and Transportation Shipping Secretary Level Meeting addressing crucial dialogues on Inland Water Transit & Trade and reciprocal movement of goods through ports. Authorization for India’s commercial transport through Bangladeshi ports.
Throughout 2023 Bilateral Agreements Various agreements signed, including joint coastal surveillance system, defense cooperation, and comprehensive economic partnership.

Cooperation on Security and Diplomacy

The diplomatic relations between Bangladesh and India have reached new heights, as evidenced by the joint statement on September 30, 2023. The comprehensive agreements signed between the two nations cover a spectrum of areas, from defense and security to energy, trade, and connectivity. Prime Ministers Narendra Modi and Sheikh Hasina’s commitment to fostering mutual growth, security, and prosperity was underscored during this historic occasion. But this is not the only time when the epitome of bilateral relations came across the way. There were plenty of events took place in the year 2023 which demonstrate the solid partnership between the two nations. This marks a significant stride in the enduring collaboration between the two South Asian neighbors, reflecting a shared vision for regional stability and prosperity. The subsequent initiatives, ranging from cross-border rail links to energy projects and currency trading, highlight the multifaceted nature of their strengthened bilateral ties.

On September 9-10, 2023, Indian Prime Minister Shri Narendra Modi held bilateral talks with Prime Minister Sheikh Hasina during her visit to India for the G-20 Leaders Summit, discussing diverse aspects of cooperation between the two nations. The two nations entered into three memorandum of understanding (MoUs), encompassing areas such as cooperation in Digital Payment mechanisms. The specific MoU related to collaboration in Digital Payment mechanisms was formally signed by the National Payments Corporation of India (NPCI) and Bangladesh Bank. Additionally, another MoU emphasized the extension of the Cultural Exchange Program (CEP) between India and Bangladesh, spanning the years 2023 to 2025. The third MoU was executed between the Indian Council of Agricultural Research (ICAR) and the Bangladesh Agriculture Research Council (BARC).

Later on, in a joint statement on September 30, 2023, India and Bangladesh celebrated their robust bilateral ties, signing seven agreements that marked a significant stride in enhancing cooperation. The agreements included the establishment of a joint coastal surveillance system, highlighting the leaders’ commitment to reinforcing maritime security. Prime Ministers Narendra Modi and Sheikh Hasina emphasized the imperative for broad-based bilateral relations, underscoring the progress made in finalizing an MoU for a coastal surveillance radar system in Bangladesh. The signed MoUs spanned diverse areas, such as water resources, youth affairs, culture, education, and coastal surveillance, reflecting a comprehensive approach to collaboration. Both leaders expressed a shared commitment to combat terrorism in all its forms, recognizing it as a significant threat to regional peace and stability.

The joint statement also highlighted the historical context of bilateral defense cooperation, recalling joint operations during the Bangladesh Liberation War in 1971. The leaders discussed the need for greater cooperation in defense, affirming their commitment to a secure neighborhood. Implementation arrangements for a $500 million Defence Line of Credit extended by India to Bangladesh were finalized, further solidifying defense ties. The inauguration of the Bangladesh-India Professional Skill Development Institute and an MoU on water withdrawal from the Feni River showcased a commitment to shared development. Additionally, concerns over civilian casualties at the border prompted a directive to enhance coordinated measures to mitigate such incidents. The joint endeavors underscored a commitment to fostering mutual growth, security, and prosperity.

On August 27, 2023, High Commissioner (HC) Pranay Verma and H.E. Mr. Zunaid Ahmed Palak jointly initiated the establishment of the Knowledge Park in Chattogram. Later on he participated in a seminar titled “Development of Chattogram through Enhanced Connectivity: Prospects and Challenges” on August 26, 2023. Previously he delivered a speech at the BIMSTEC Energy Conclave on August 06, 2023, emphasizing the importance of regional cooperation under BIMSTEC amid global uncertainties and highlighting the pivotal role of Bangladesh-India relations. Furthermore, a contract signing ceremony for the Dhaka-Tongi-Joydebpur rail line project occurred on July 23, 2023, at Rail Bhaban in Dhaka. The initiative, supported by a Line of Credit from the Government of India, focuses on implementing a modern computer-based interlocked signaling system.

The high commissioner also hosted a reception on June 21, 2023, aboard the visiting Indian Naval Ship INS Kiltan. The event, attended by Indian and Bangladesh Navies, emphasized the strengthening defense partnership, followed by a tribute-paying ceremony at the Chittagong Commonwealth War Cemetery on June 22. On July 11, 2023, the High Commission of India and Bangladesh Bank jointly inaugurated trade between India and Bangladesh in Indian Rupees (INR). HC Pranay Verma and Bangladesh Bank Governor Mr. Abdur Rouf Talukder co-hosted the event to promote bilateral trade relations. HC Pranay Verma and State Minister for Shipping H.E. Khalid Mahmud Chowdhury welcomed passengers of the world’s longest cruise ship, Ganga Vilas, on February 4, 2023, at Mongla port, enhancing river cruise tourism between India and Bangladesh.

The groundbreaking ceremony for the “Widening of Baraiyerhat-Heanko-Ramgarh Road” project took place on May 24, 2023, virtually attended by Mr. Obaidul Quader, the Honorable Minister of Road Transport and Highways, and HC Pranay Verma. The project is part of India’s USD 4.5 billion Line of Credit to Bangladesh. Notably, The High Commission of India organized a Seminar on Indian Defence Equipment (SIDE) in Dhaka on March 5, 2023, aiming to strengthen defense industry collaboration. HC Pranay Verma and Lt. Gen. Ata-ul Hakim Sarwar Hasan delivered keynote remarks, fostering engagement between Indian defense manufacturers and Bangladesh’s armed forces.

In January 2023, two Indian Coast Guard Ships, ICGS SHAURYA and ICGS RAJVEER, visited Chattogram for six days, reinforcing cooperation between the Coast Guards of Bangladesh and India in the maritime domain.

In May 2023, Shri Ashwini Vaishnaw, the Hon’ble Minister of Railways of India, virtually inaugurated 20 Broad Gauge locomotives at the Darshana-Gede Interchange Point, marking a significant milestone in India-Bangladesh Railway collaboration. On the same month, External Affairs Minister Dr. S. Jaishankar delivered the keynote address at the Indian Ocean Conference in Dhaka on May 12, 2023, emphasizing peace, prosperity, and partnership. He acknowledged Bangladesh’s Indo-Pacific Outlook and its relevance in the current context.

In February 2023, Foreign Secretary Vinay Kwatra reaffirmed India’s commitment to a broader economic and development partnership with Bangladesh during discussions in Dhaka, covering various bilateral aspects. The 3rd Meeting of the High-Level Project Monitoring Committee, reviewing projects under the India-Bangladesh Governmental Lines of Credit, occurred on February 14, 2023, at the Economic Relations Division, Ministry of Finance of Bangladesh.

Economic Relations

Bangladesh and India are set to engage in Rupee-Taka trading, with bilateral transactions in Indian Rupees initiated from July 11th. This decision aims to reduce Bangladesh’s reliance on the US dollar, addressing the decline in foreign exchange reserves caused by the Russia-Ukraine conflict. As the countries face inflation and import cost challenges, the move is expected to ease strain on the USD and boost financial resilience. Key banks, including Sonali Bank Ltd, Eastern Bank Limited, State Bank of India, and ICICI Bank, have been authorized to facilitate trade transactions. This development holds broader significance, potentially inspiring regional common currency adoption in South Asia. The initiative, addressing currency scarcity, could serve as a model for nations dealing with similar economic ties and foreign exchange challenges, fostering efficiency and competitiveness in trade.

Prime Minister Sheikh Hasina inaugurated the India-Bangladesh Startup Bridge during the Bangladesh Startup Summit on July 29, 2023. This collaborative effort involves 10 Indian startups and aims to facilitate knowledge, technology, and best practices exchange between the two nations.

Bangladesh holds the distinction of being India’s foremost trading partner in the subcontinent, while reciprocally, India holds the position of being the second-largest export partner for Bangladesh, accounting for 12% of the total exports. In the fiscal year 2023, the cumulative trade turnover between the two countries reached a substantial figure of US$ 14.22 billion.

For the fiscal year 2023, India exhibited a diverse export profile to Bangladesh, with 6,050 different commodities totaling US$ 12.20 billion. This marked a slight decrease from the US$ 16.15 billion recorded in the previous fiscal year. Noteworthy items in India’s export basket to Bangladesh included other 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). The exports during April-May 2023 amounted to US$ 1.67 billion.

On the import front, India imported 1,155 commodities from Bangladesh during the fiscal year 2023, totaling US$ 2.02 billion. This represented a modest increase from the US$ 1.97 billion recorded in the previous fiscal year. Key imported items by India from Bangladesh included 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). The imports during April-May 2023 stood at US$ 278 million.

In the domain of economic relations and investments, Bangladesh holds a significant role as one of India’s major development partners. The bilateral ties between Bangladesh and India, manifested in their collaborative efforts, have yielded mutual benefits.

Domain of Connectivity

The Akhaura-Agartala Cross-Border Rail Link, inaugurated on 1 November 2023 and spanning 12.24 km across Bangladesh and Tripura, symbolizes collaborative efforts between India and Bangladesh for enhanced regional connectivity. Financially supported by India, this initiative facilitates cross-border trade and cultural exchanges, unlocking prospects in tourism. The streamlined transportation, reducing travel time from 38 to 12 hours, promises economic growth and strengthens bilateral ties. The project, costing Rs 1255.10 crore, marks a significant milestone in regional transportation infrastructure, fostering economic prosperity and cultural exchange. Beyond immediate benefits, it aligns with broader regional integration initiatives like the BBIN Motor Vehicles Agreement, indicating a commitment to revolutionizing trade, transport, and connectivity for a more interconnected and prosperous South Asian region.

The recent two-day Shipping Secretary Level Meeting in Dhaka between Bangladesh and India, held on December 19, 2023, showcased significant strides in consolidating their enduring partnership. Discussions during the meeting included crucial dialogues on Inland Water Transit & Trade and the reciprocal movement of goods through ports. Led by high-ranking officials, the talks addressed trade challenges and opportunities, with a focus on enhancing connectivity and resolving logistical issues. Recent agreements, notably the authorization for India’s commercial transport through Bangladeshi ports, underscore a joint commitment to bolster regional trade. In the context of a disrupted global supply chain, these strategic measures reflect a renewed collaboration for increased connectivity and trade resilience between the two nations. The diplomatic approaches and agreements reached during these discussions play a pivotal role in fostering a renewed paradigm of collaboration within the domain of connectivity and trade, contributing to the enhancement of regional trade and security.

Energy Cooperation

The inauguration of the 131.57-kilometer Indo-Bangla Friendship Pipeline marks a significant milestone in bilateral cooperation between Bangladesh and India. Opened on March 18, 2023, the pipeline facilitates the import of petroleum products, primarily diesel, from India to Bangladesh. With Prime Ministers Sheikh Hasina and Narendra Modi leading the inauguration, the pipeline, spanning 126.57 kilometers in Bangladesh and 5 kilometers in India, signifies enhanced energy collaboration. Initiated under a 15-year agreement, the project aims to import 250,000 to 400,000 tonnes of diesel annually. This cross-border pipeline not only ensures a stable diesel supply for Bangladesh but also presents economic benefits for both nations by reducing transportation costs and fostering environmental sustainability. The success of this project sets a precedent for future collaborations, offering a model for South Asian nations to enhance energy security and promote regional stability.

On November 1, 2023, Prime Minister Sheikh Hasina highlighted the joint inauguration of three development projects with Indian assistance as a manifestation of the strong rapport and collaborative spirit between Bangladesh and India. Emphasizing optimism for the future, she expressed confidence in the potential achievements through continued mutual cooperation. The Maitree Super Thermal Power Project, financed by a USD 1.6 billion Indian Concessional Financing Scheme loan, is a substantial 1320 MW power plant in the Rampal area of Bangladesh. A joint venture between India’s NTPC Ltd and Bangladesh Power Development Board, the project aims to bolster energy security and environmental sustainability. Operational since August 2022, the plant’s second unit is expected to alleviate the current global energy crisis, contributing 91.7 MW to the national grid. The project incorporates advanced environmental measures, including a Flue Gas Desulphurization System and an Integrated Effluent and Waste Management System.

The Maitree project represents a significant milestone in the enduring collaboration between Bangladesh and India in the power sector, fostering energy security and regional connectivity. In January 2023, State Minister for Power, Energy, and Mineral Resources Nasrul Hamid expressed Bangladesh’s interest in increasing the import of petroleum products from India at a reasonable price during a meeting with India’s Minister of Petroleum and Natural Gas, Hardeep Puri, in Delhi.

People to People Connectivity

In September 2023, a Memorandum of Understanding was signed, renewing the Cultural Exchange Program (CEP) between India and Bangladesh for the period 2023-2025. As part of the vibrant cultural exchange between the two nations, the Study in India Expo, a prominent education show series in Bangladesh focused on Indian education, scheduled to take place across multiple cities. The expo was set to commence in Chattogram on 7-8 July at The Peninsula, followed by Dhaka on 10-11 July at Jamuna Future Park, Khulna on 13 July at Hotel City Inn, and Rajshahi on 15 July at Garden River View Hotel.

This four-city expo showcased offerings from 25+ of India’s highly ranked universities and colleges, representing various regions of the country. According to a press release, representatives from these educational institutions would provide valuable counseling to students, aiding them in selecting appropriate courses and offering accurate information regarding admissions. Furthermore, there was feature like the CCR/SJS Scholarship Scheme AY 2022-23 (Bangladeshi Student), providing additional opportunities for aspiring students. These initiatives collectively underline the growing people-to-people connections and the shared commitment to fostering educational collaboration between India and Bangladesh.

In 2023, a significant number of Bangladeshis, totaling 1.6 million, obtained visas to visit India. During the first four months of the same year, India recorded a notable surge in foreign tourist arrivals, with a total of 31.33 lakh visitors. This marked a substantial increase from the 11.77 lakh foreign tourists during the corresponding period in 2022, according to data provided by the Ministry of Tourism in India.

Analyzing the composition of these foreign tourist arrivals, approximately 21.9% were from Bangladesh, highlighting the robust connection between the two nations. Additionally, 16.3% came from the USA, 10.3% from the UK, 5% from Canada, and 4.5% from Australia. This diverse influx of international visitors underscores the appeal and attractiveness of India as a tourist destination and exemplifies the strong bonds and mutual interest between India and Bangladesh.

Conclusion

Amidst global uncertainties, the year 2023 showcased the resilience and continuity of the historical friendship between Bangladesh and India. The comprehensive collaboration across various sectors, from energy and infrastructure to economic and cultural domains, underscored the commitment of both nations to mutual growth and prosperity. The inauguration of key projects like the Indo-Bangla Friendship Pipeline, the Akhaura-Agartala Cross-Border Rail Link, and significant trade agreements highlighted the depth of their strategic partnership. Economic relations reached new heights, with Bangladesh becoming India’s largest trading partner in the subcontinent. The initiation of Rupee-Taka trading and the Study in India Expo further strengthened people-to-people connections. The bilateral agreements on defense, security, and comprehensive economic partnership reflected a shared vision for regional stability. Despite global challenges, Bangladesh and India navigated 2023 with a sense of fraternity, setting the stage for continued collaboration and deeper engagement in the years to come.

Series Editor
Delwar Hossain, PhD is Professor of International Relations, University of Dhaka, Bangladesh.

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

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