Bangladesh: A regional connectivity hub linking South Asia with Southeast Asia

Connectivity between Bangladesh and neighbouring countries including India have received great boost during the last ten years from Bangladesh’s pro-active stance on enhancing connectivity in South and South East Asia. Bangladesh is playing a leading role in the Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation (BIMSTEC) which groups together Bangladesh, India, Maldives, Sri Lanka, Thailand, Nepal and Bhutan in a forum for multilateral cooperation. Since 2014 the secretariat for this group has been hosted in Dhaka.

Bangladesh is uniquely positioned to take advantage of its location in the eastern region of South Asia. It will be a centre point of different initiatives that seek to connect Bangladesh, Bhutan, India and Nepal with the ASEAN and other East Asian countries. With deeper trade, investment and connectivity linkages within the sub-region, Bangladesh can benefit from new markets, new import sources of high quality and better priced products, increasing opportunities for transport and logistics services.

Bangladesh is trying to engage in various sub-regional connectivity projects through road, rail and sea routes with India. These connectivity projects can create more trade opportunities for Bangladesh with the North Eastern states of India. India is interested in road and railway transit through Bangladesh as it would lower the cost and time to send goods to its north-east.

Transit facility to North East and sub-regional connectivity with Bhutan, Nepal and India are important connectivity initiatives between Bangladesh and India. The Protocol on Inland Water Transit and Trade between Bangladesh and India initiated the Kolkata-Assam water route via Bangladesh for transportation of goods and providing infrastructural facilities.

The arrival of a vessel at Ashuganj in Bangladesh from Kolkata in June 2016 for Agartala marked the first transit to India’s North East.via Bangladesh. Now the direct route is around 620 nautical miles, down from 3000 nautical miles, which has also cut the trade cost by 50 per cent. A simultaneous maritime and land transits are being offered to India. At present, Bangladesh charges Tk 192.22 per ton for transshipment.

Bangladesh and Nepal have extended the Protocol on Inland Water Transit and Trade which is not only enhancing trade but also facilitating greater investments in transport infrastructure through public-private partnerships. Under this agreement Bangladesh will be allowed the use of channels for trade with India, Nepal and Bhutan.

Bangladesh, Bhutan, Nepal and India (BBIN), a group of sub-regional countries in Eastern South Asia, signed a landmark Motor Vehicles Agreement (MVA) in 2015 for the regulation of passenger, personnel and cargo vehicular traffic among the four South Asian neighbours. The MVA, based on the EU model, has paved the way for seamless movement of goods and people across the border for the benefit and integration of the region and its economic development.

The MVA aims to connect the landlocked Bhutan, Bangladesh, Nepal and North East Indian territories with the Chittagong and Kolkata port. Bangladesh and Nepal had launched a bus service through India on 24 April, 2018 under MVA. The Dhaka-Kolkata-Agartala bus service and Dhaka-Shillong-Guwahati bus service also started in 2015 under this agreement. Both Bangladesh and India agreed to consider introducing new bus service linking Khulna-Kolkata and Jessore-Kolkata.

Bangladesh and India are taking initiatives to revive the traditional rail routes to enhance travel of passengers and transportation of goods. There are eight interchange points between Bangladesh and India, namely Darshana-Gede, Benapole-Petrapol, Rahonpur-Singabad, Birol-Radhikapur, Shahbazpur-Mohishashan, Chilahati-Haldibari, Burimari-Chengrabanda and Mogalhat- Gitaldah.

In September 2018 works of three projects, namely the Kulaura-Shahbazpur section rehabilitation of Bangladesh Railway, Akhaura-Agartala and Chilahati-Haldibari rail connectivity have been inaugurated by the Prime Ministers of Bangladesh and India. A 43 km railway line is being set up from Khulna to Mongla port. This will establish direct rail connectivity between Mongla and the nearby Nepal and Bhutan alongside local routes.

In February 2016 India and Nepal signed an agreement paving the way for trade transit between Bangladesh and Nepal. Rail transit facility will be operationalized through Singhabad in India for Nepal’s trade with and through Bangladesh, according to the letter of exchange signed after the Nepali Prime Minister KP Oli’s talks with the Indian Prime Minister Modi. The transit between Nepal and Bangladesh is taking place at present, through Kakarbitta (Nepal)-Banglabandha (Bangladesh) corridor. This arrangement will simplify modalities for traffic of cargo between Bangladesh and Nepal.

Further regional connectivity between Bangladesh and its neighbours is expected in implementation of the planned concept of ‘Blue Economy’ now that Bangladesh is in receipt of new marine territories as a result of the maritime verdict wins through arbitration against India and Myanmar.

The geographic location of Bangladesh’s deep-sea ports may greatly lead to trade expansion. Bangladesh has an immense opportunity to become a regional transport hub not only for SAARC countries but also for China and other Asian countries.

In May 2016 Bangladesh and India launched coastal shipping to allow river vessels to carry cargo between the two countries the agreement for which was signed during the Indian Prime Minister Modi’s visit to Dhaka. This arrangement is providing the boost for trading between the neighbours and taking advantage of the proximity the cost of transportation has been greatly reduced.

In March 2016 a new era was heralded with the launching of direct shipping between Krishnapatnam, deep sea port on the east coast of India’s Andhra Pradesh, and Chittagong port at a ceremony held at Krishnapatnam port in India. Named after the Krishnapatnam-Pangaon weekly direct service, the shipping line was welcomed by traders of both the countries as it would substantially reduce the transit cost and save a lot of time. Direct shipping service will reduce transportation cost and infuse dynamism on the export business between the two countries.

In July 2016 the governments of Bangladesh and India stepped up with an agreement that merged the busiest land check-post at Benapole-Petrapole, easing the movement of people and goods, lifting up their relations a notch higher. Prime Ministers of Bangladesh and India opened the new Petrapole Integrated Check- Post. The integrated post is aimed at eliminating infrastructural bottlenecks to achieve effective and efficient security, immigration, customs and quarantine functions.

The erstwhile Khaleda Zia regime in Bangladesh had strong reservations against granting connectivity and transit to the neighbours on the pretext that it would infringe on the sovereignty of Bangladesh. It was the Sheikh Hasina-led government that realized that granting connectivity and transit was a win-win situation for Bangladesh as, in addition to earning revenue it would allow local entrepreneurs to access the markets in North East India and beyond and enable greater people-to-people contact in a smooth way.

India’s grant of fresh $ 2 billion for infrastructure development will enable corridors for sub-regional connectivity among Bangladesh, Bhutan, Nepal and India and transit of people and goods through India’s eastern neighbor. With trade becoming the top priority of all nations, it is a prudent step to build a cohesive regional partnership not only to cement political bonds but also to consolidate economic ties.