Issues before Indian PM Modi as he visits Bangladesh on June 6-7

Issues before Indian PM Modi as he visits Bangladesh on June 6-7

-Dr. Abdul Ruff


Indian Prime Minister Narendra Modi reaches Bangladesh on June 6 to a red carpet reception to be accorded for two days by the Awami League government of Sheikh Hasina who is eager to use the occasion to settle score with her political opponents led by Khaleda Zia. Reports suggest the West Bengal chief minister Mamata Banerjee who stood against Teesta Accord to meet the water requirement of her own state would a part of PM Modi entourage consisting of top business magnets, among others.

While in Dhaka PM Modi would advance Delhi’s long-cherished goal of transit treaty with Bangladesh leaving behind the promised Teesta water sharing agreement for future. Teesta Barrage project in West Bengal is the biggest irrigation project that support irrigation in the entire region. The project provides irrigation to 9.22 million hectares of land and generates 67.50 mw of hydroelectric power. Teesta flow is restricted before it enters West Bengal with construction of more than ten hydro projects in the upstream.  After meeting its own requirement West Bengal has little flow of Teesta water during the dry season to share with Bangladesh. Teesta issue is emerging as a major threat to the two countries’ multi-faceted bilateral ties and raising the wall of mistrust between India and Bangladesh.

Although India is projecting Modi’s ensuing visit as the expansion of trade and mutual cooperation, but his priority is transit corridor for military purposes in North East. Arunachal Pradesh in the Northeast is a disputed area, claimed by China as part of Tibet. India’s intelligence agency claimed China was behind the unity move of the separatist groups and some of their leaders were in Beijing seeking material support in their struggle for independence from India. About two lakh regular army and paramilitary forces remained deployed in the Northeastern States for decades to combat the insurgents in guerrilla warfare. They need quick and smooth supplies.

In fact, Bangladesh has already been providing transit facilities to India. Heavy machinery for power plant in Tripura transported from the West through Bangladesh free of cost. Similarly, rice and other essential goods are transported to the insurgency troubled Northeastern States through Bangladesh territory. The 2010 agreement between Sheikh Hasina and Dr Manmohan Singh ­ a broad ranging communiqué issued after her visit to Delhi marks a dramatic improvement of relations between the two countries. The communiqué included a promise to allow transit facilities and India’s commitment to energize bilateral trade by drawing down tariff and certain non-tariff barriers to Bangladeshi products.

What Narendra Modi wants during his short visit, and Awami League Government in Bangladesh ready to oblige in favor of heavy service charges, is to renew the existing transit facility with amendment for expansion of its scope for greater connectivity. It is worth recalling that after the 1947 partition of India, Pakistan had sought from India transit facility between East and West Pakistan. India had outright rejected the proposal. Pakistan had also sought Calcutta port facility for a period of six months to make Chittagong port operative. India’s then Home Minister Sardar Patel rejected the proposal saying ‘not for even six hours’. Again, President Ziaur Rahman made a treaty with Nepal for bilateral trade through India and port facility to landlocked Nepal. But India denied transit facility over its land and the agreement could never be implemented.

Bangladeshi trade gap with India in the first nine months of the current financial year continued to hover at $4.06 billion despite a slight increase in exports to the neighbouring country. The trade gap was still high as different non-tariff barriers continued to limit Bangladesh’s exports to the neighbouring country, said economists and experts. Bangladesh’s imports from India stood at $4.45 billion in July-March of the FY 2014-2015 whereas exports stood at $396.43 million during the period.  The trade deficit of Bangladesh against India was still high as different non-tariff barriers continued to limit Bangladesh’s exports to the neighbouring country. The businesspeople have long been raising their concern in this connection but the India’s government is yet to mitigate the problem.

Policy Research Institute of Bangladesh executive director Mansur said that the country had been facing a large trade gap with China and India for a long time due to lower export earnings against higher import payments. The country’s industrial sector has also facing a production crisis due to the recent political unrest and that might have played a role in the large trade deficit between the two countries. The government should give pressure to India on political ground so that the country’s businesspeople would be able to increase their export items.  Mansur said the commerce ministry should take initiative to avoid non-tariff barriers with India that would help the exporters to increase their items to India.

India, which has had an uneasy relationship with China for decades, has long fretted over Beijing’s military cooperation with its South Asian neighbours, especially Pakistan. India is also worried China is creating a so-called “string of pearls” across the Indian Ocean by funding port developments in Pakistan, Sri Lanka, Myanmar and Bangladesh. China had built close ties with Bangladesh as part of its South Asia diplomacy and that this was a concern for India. The number of PLA (China’s People’s Liberation Army) visits to Bangladesh is nearly the same as to India. Shrewd Modi is trying to counter it with his neighborhood outreach. Narendra Modi has reached out to all of India’s neighbours since he took office a year ago except Pakistan.

Any Indian concerns about Bangladesh’s growing military ties to China, including the planned sale of two Chinese diesel-electric submarines, are likely to fall on deaf ears in Dhaka, said a former Bangladeshi military officer and an Indian expert. China was the source of 82 percent of Bangladesh’s arms purchases from 2009-2013, according to the Stockholm International Peace Research Institute (SIPRI), making Dhaka one of the top three buyers of Chinese weapons in the world. SIPRI data showed Bangladesh bought anti-ship missiles, tanks, fighter aircraft and other arms from China between 2008 and 2012. Last year it commissioned two new frigates from China. “China became the largest supplier of military hardware to Bangladesh when relations with India were strained,” said retired Bangladeshi brigadier general Shahedul Anam Khan. A government official in Dhaka said Bangladesh’s first submarines, costing $206 million in total, could be delivered before 2019. China was expected to provide training, said Chinese experts on the country’s ties with South Asia.

China is helping Bangladesh upgrade its main Chittagong port while the China Harbour Engineering Company has been seen as the frontrunner to win a contract to build an $8 billion deep water port on Sonadia Island off the Bangladeshi city of Cox’s Bazaar in the Bay of Bengal. A Bangladeshi government official said it was unclear when a decision on Sonadia would be made, adding that port operators from the United Arab Emirates and the Netherlands were also interested. “China, in my opinion, is the best option,” said Munshi Faiz Ahmad, a former Bangladesh ambassador to China, adding that Chinese firms had built big infrastructure projects in a number of countries including Bangladesh, where they have constructed power plants, bridges and roads.

India was alarmed last year when Chinese submarines docked ports in Sri Lanka. A new government in Colombo has since ruled out submarine visits in the near future. China’s defence ministry’s had no immediate comment on military ties with Bangladesh. Cooperation between the two countries was normal, China’s Foreign Ministry said. Bangladesh has never hosted a naval ship from China. Modi will take border settlement and water sharing deals to Bangladesh as part of his drive to erode Chinese influence in South Asia, although Dhaka is likely to remain dependent on Beijing for military equipment.

What worries Indian military planners is that China might see Bangladesh, which shares the Bay of Bengal with India and Myanmar, as an ideal place for its warships and submarines to dock. The Indian Navy is watching China’s growing military ties with Bangladesh closely. It’s setting up missile batteries and radar surveillance on Sagar island, near the Indian-Bangladesh border, with plans to develop a deep sea port there that would provide easy access to the Bay of Bengal, military officials said.  “The worry is not Bangladesh’s military capabilities,” said former Indian ambassador to Dhaka, Pinaki Chakravarty. “It is about Chinese influence next door.”

Modi has won parliamentary approval for an agreement that will transfer a small amount of territory to Bangladesh that previous Indian governments failed to ratify for fear of a domestic backlash. The issue dates back to British India’s partition in 1947. Prime Minister Modi has also persuaded a Trinamool Congress chief and West Bengal Chief Minister Mamata Banerjee to drop her opposition to share water equally from a key river that flows through India before reaching Bangladesh. The migration of tens of thousands of people from Bangladesh into India has long been a sensitive issue in India, with the then opposition Bharatiya Janata Party making it a key campaign plank. But since coming to power, Modi has fallen silent on the migration issue and has instead focused on securing India’s strategic objectives in Bangladesh.

The Modi government in India said will soon be providing Bangladesh $2 billion line of credit for development of water, rail and road transport. The funds should be used for development of the railway, power, health, education, ICT and water transport on a priority basis. A deal for this is expected to be signed during the Indian prime minister’s visit to Dhaka on June 6. Finance ministry officials said the terms of the LOC will be same as the previous $1 billion line of credit extended by India, under which at least 75 percent of the goods and services for the projects would have to be procured from India. The credit will also have an interest rate of 1 percent which is a little higher than World Bank loans.

India gave Bangladesh $1 billion line of credit in 2010. The then Indian finance minister and now President Pranab Mukherjee later announced that no interest would be charged on $200 million of the $ 1 billion loan. The rest $800 million, on which 1 percent interest would be charged is being used to implement 14 projects, seven of which have already been completed.

India has succeeded in dissuading Sri Lanka to deny China any right to dock its vessel at Lankan ports. The new government under President Sirisena has assured New Delhi not to let the Chinese ships to dock in the Island nation. However, PM Modi would not e able to get Bangladesh on board to be strict with Beijing. China-Bangladeshi military ties have been very strong for years and are indeed growing further. Chinese presence in Bangladesh is being felt as a national phenomenon. India can do very little to disrupt the relationship Dhaka courts with Beijing voluntarily..


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