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Indo-Bangla Trade Focus on the North East

Indo-Bangla Trade Focus on the North East. OVERVIEW . Outline . Economic relations between North Eastern India and Bangladesh: Scope Opportunities Challenges Why focus on Tripura? CUTS consultations on Indo-Bangla trade Objectives Recommendations

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Indo-Bangla Trade Focus on the North East

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  1. Indo-Bangla Trade Focus on the North East OVERVIEW

  2. Outline • Economic relations between North Eastern India and Bangladesh: Scope • Opportunities • Challenges • Why focus on Tripura? • CUTS consultations on Indo-Bangla trade • Objectives • Recommendations • Developments after the last Agartala consultation • Review and way forward

  3. Economic Relations between North Eastern India and Bangladesh: Opportunities (1) • Bangladesh as a source of connectivity – rail, road and riverine – between North Eastern India and the rest of India • India benefits from cheaper movement of goods • Bangladesh benefits economically by facilitating such connectivity • Bangladesh as a source of connectivity by sea for North Eastern states with the rest of the world • India as a source of land connectivity between Bangladesh and other Asian countries (China, Bhutan, Nepal etc)

  4. Economic Relations between North Eastern India and Bangladesh: Opportunities (2) • Current low exploitation of potential for trade implies the possibility of huge gains if certain preconditions are suitably met • Large untapped capacity for power generation in North Eastern India which can feed power starved Bangladesh • Potential for synergies between North Eastern human capital, markets and natural resources on the one hand and Bangladeshi entrepreneurship and markets on the other

  5. Economic Relations between North Eastern India and Bangladesh: Challenges • Infrastructure related challenges • To modernise customs stations on both sides of the border and ensure harmony in processes and facilities • Make connectivity more viable through better and more modern communication between customs stations of entry and exit • Increase the capacity of border roads and sea ports to facilitate movement of goods • To work out an integrated system for transport of goods in the North Eastern sub-region of South Asia based on cooperation among involved countries • To harmonise and minimise non tariff barriers in the region • To provide institutional and logistical support for cross border economic collaboration; and production oriented towards regional trade

  6. Why Focus on Tripura? • Accounts for 48 percent of the Indo-Bangla border with Bangladesh on three sides • Agartala is close to both Chittagong and Dhaka • Has registered rapid economic growth over the last decade • Fledgling manufacturing sector can benefit from Bangladeshi markets and FDI as well as access to Indian markets through Bangladesh • Rich in natural gas – potential power exporter to Bangladesh • Cultural similarity with Bangladesh • High literacy rates point to a potential source of human capital

  7. CUTS Consultations on Indo-Bangla Trade: Objectives • To elicit views of relevant stakeholders about potential for trade, connectivity and cross border investment in the North Eastern sub region of South Asia • To involve business, civil society and government in creating momentum for economic cooperation in the sub region

  8. CUTS Consultations on Indo-Bangla Trade: Summary of Contributions • Guwahati consultation in March 2009 fed into Agartala consultation in August 2009 • Sub regional independent task force on connectivity and cooperation constituted in Agartala • Memorandum submitted by Indian segment of task force to Indian PM with following recommendations: • Joint private logistical venture between India and Bangladesh to facilitate connectivity/ transhipment in the sub region • Upgradation and harmonisation of customs facilities, human capital at customs stations, and border roads • Promotion of riverine and maritime connectivity for the sub region through Bangladeshi ports • Facilitation of people to people and business interactions through direct air and bus connections between cities in Bangladesh and capital cities in North Eastern states

  9. Developments after the Agartala Consultation of August 2009

  10. Joint Foreign Ministers’ Meeting (September 2009) Access provided to Ashuganj port for transporting consignments relating to power project in Tripura through Bangladesh Recognition of the importance of providing permanent riverine and maritime connectivity to India through Ashuganj and Chittagong respectively Indian side agreeing to facilitate connectivity for Bangladesh with Nepal and Bhutan Indian offer to take up construction of Akhaura-Agartala rail link Need to harmonise standards and remove para tariff and non tariff barriers recognised

  11. Bangladeshi PM’s India Visit (January 2010) Additional agreements: • To jointly combat terrorism, organised crime etc as covered by SAARC conventions: economic dividend would accrue through promotion of peace • For India to export 250 MW of power to Bangladesh; joint power plant was also discussed as a possibility • To provide access for Indian goods to Mongla sea port • For India to provide $1 billion line of credit to Bangladesh for transport infrastructure and equipment related issues

  12. Tripura CM’s Visit to Dhaka (March 2010) Key outcomes: • Proposal to construct a bridge on River Feni to provide South Tripura connectivity with Chittagong port accepted by Bangladeshi government • Bangladesh government would undertake a survey which would serve as a basis to connect Bangladesh (Akhaura) and Tripura (Agartala) by rail • CM declared no opposition to GoI’s intention to sell power generated through ONGC’s mega power project in Tripura to Bangladesh

  13. Review and Way Forward • Landmark agreements reached in regard to connectivity, trade in power, security, elimination of non tariff barriers etc • Implementation of these agreements has to be jointly supervised and monitored by both sides • Initiatives needed: • stimulation of intra regional foreign direct investment and other cross border economic collaboration • joint cooperation in upgrading customs stations and personnel • development of an integrated transport system in the region through joint ventures (suitable infrastructure for facilitating adequate cross border connectivity as well as vehicular fleets empowered to cross borders and facilitate trade) • Detailed and authentic information needed for the public on progress in Indo-Bangla economic cooperation and emerging avenues thereof

  14. THANK YOU Siddhartha Mitra Director (Research), CUTS sm2@cuts.org http://www.cuts-international.org

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