Home ›› 02 Apr 2023 ›› Opinion
Expanding international trade has become key issue in the world. In particular, the countries that are on the track of coming out LDC status need to be connected each other. Internationally renowned traders are looking for safest and cheapest corridor in importing and exporting goods. In order to stay competitive, there is no alternative to increase international trade. Many leaders in the world are deeply thinking in what way the goods can be transported using sea ports and territory of other countries.
Due to geo-political issues, some deals are waiting to be signed and some others remain pending for years. Ultimately, any economy begins to experience significant positive change in macro-economy based on multi-modal transport facilities.
Among South Asian nations, Bhutan and Nepal are totally landlocked countries. These two countries have no sea avenue. In absence of marine transport facility, Nepal and Bhutan do international trade through land and air routes which are more expensive. For years, these two countries had been trying their level best to ink deal with neighboring countries--India and Bangladesh. The objective of the deal is to seek transit facility from India and Bangladesh so that they can take and send goods by using India-Bangladesh territory. India is one of the largest countries in respect of its area in South Asia. India’s demand was to use Bangladesh’s territory also. Once, India dreamt to be connected with its north-eastern region by using Bangladesh’s space.
Ultimately India has successfully completed the deal and currently the goods are being sent to its north-eastern region by using land, river and sea routes belonging to Bangladesh.
First transit agreement between India and Bangladesh was signed in 2010. Later, the two premiers signed a protocol in 2015 for the purpose of usage of four river ways that are in Bangladesh territory.
The deal greatly helped India to transport its goods from Kolkata and Murshidabad to Assam, Tripura and Meghalaya. Next to river route, India set its vision to use two prime sea ports--Chattogram and Mongla--owned by Bangladesh. Subsequently, a memorandum of understanding (MoU) regarding using of these two ports in Bangladesh was signed in 2018. According to agreement, Indian goods will be transported to Agartala (Tripura) via Akhaura; Dawki (Meghalaya) via Tamabil; Sutarkandi (Assam) via Sheola, and Srimantpur (Tripura) via Bibirbazar from Chattogram and Mongla sea ports.
India has been authorized to use land, river and rail routes in transporting their goods to said region. In a bid to lessen travel time and distance between West Bengal to north-eastern region of India, the deal was put in place to be signed. It is important to know that before independence, India used sea route through then East Pakistan (now Bangladesh). The route was basically suspended just after ending Indo-Pakistan war held in 1965.
The traditional marine route was opened for India following ‘Inland water transit and trade’ protocol signed in 1972. Now, this protocol is followed during the hours of signing related deal. Actually, third-country transit facility for Bangladesh is considered as landmark. Bangladesh will able to send goods to Sri Lanka, Pakistan and China alongside Nepal, Bhutan by using Indian Territory.
Recalling Bangladesh’s role regarding transit facility to India, India came forward in promoting Bangladesh’s international trade. India has given free transit facility to Bangladesh so that Bangladesh can export its goods to third country using India’s specific territory. The decision for providing duty-free transit facility to Bangladesh came following SAARC 16th summit discussion held in Thimphu in 2010. The leaders in the summit felt the necessity of expanding intra-SAARC trade through extending transit as well as infrastructure facilities.
Third-country transit facility provided by India came as a boon for Bangladesh. Under third-country transit facility, intra-trade among Bangladesh, Bhutan and Nepal will be increased to a great extent thanks to current Indian premier, Narendra Modi. Export-import volume among these three countries are not admirable to say. Land-locked nations, Bhutan and Nepal had been eagerly awaiting to get sea port facility from Bangladesh side in growing their international business.
Recently, Bhutan and Bangladesh signed a protocol aiming to offer each other multimodal transit facilities in a bid to boost bilateral trade. Under the protocol agreement, Bangladesh will be allowed to use eight transit routes for transporting the goods. On the contrary, Bhutan has been authorized to use nine customs points belonging to land, rail, air and river routes. Bangladesh has already established trade relations with Bhutan through signing Preferential Trade Agreement (PTA) - the first of its kind for Bangladesh. Under PTA, Bangladesh will enjoy duty-free access for 100 products and 34 products for Bhutan.
Bangladesh signed agreement related to transit with Nepal in 1976. Under the agreement, six ports of calls were identified for the movement of vehicles plying to and from Nepal. The ports of calls are Khulna-Chalna (currently Mongla Port), Chattogram Port, Biral (Pashchimbanga, India), Banglabandha, Chilahati and Benapole. Currently, transportation of goods between Nepal and Bangladesh are seen through two routes.
The first one is Rohonpur-Zero Point-Singabad (Pashchimbanga)-Jogbani (Bihar)-Birat Nagar (Nepal). The second one is Rohonpur-Zero Point-Biral (Pashchimbanga)-Radhikapur (Pashchimbanga)-Roxol (Bihar)-Birgunj (Nepal). Nepal is allowed to use Syedpur airport, known as regional airport.
Afghanistan, Bangladesh, Bhutan, Nepal, India, Maldives, Pakistan and Sri Lanka are members of the South Asian Association for Regional Cooperation (SAARC). But, significant trade volume among these economies is nominal. According to the World Bank report, with intra-regional trade at less than 5 per cent of total trade, South Asia is the least integrated region in the world, dwarfed by East Asia’s 35 per cent and Europe’s 60 per cent.
Bangladesh aims to become higher-middle-income country by 2031 and high-income country by 2041. As part of the dream dreamt by Bangladesh, there is no alternative to develop bilateral relations. Following signing of protocols, Bangladesh needs to take hasty decision in respect of export diversifications. If Bangladesh fails to export goods in Nepal and Bhutan through Indian territory, there will be huge economic loss. Before signing a series of agreements with India, Nepal and Bhutan regarding transit issue, Bangladesh emphasized on infrastructure development that took huge cost. Bangladesh has managed finance from global lenders for infrastructure development for transit purpose. Bangladesh must pay heed to revenue earnings in exchange of Indian usage of Bangladesh’s territory. Multi-modal transport facilities are badly required right now in enhancing intra-SAARC trade.
The writer is an economic affairs analyst. He can be contacted at mazadul1985@gmail.com
