Trade, food, energy high on agenda in PM's India tour

Dhaka and New Delhi hope that Prime Minister Sheikh Hasina's four-day visit to India, starting Monday, will pave the way for Bangladesh to meet its long-term energy and food demands, while also taking bilateral trade expansion and investment cooperation to new heights.

Hasina's visit comes three-years into her latest term against the backdrop of the global supply crisis exacerbated by the Russia-Ukraine conflict.

Amid the threat of possible economic woes, Hasina and her Indian counterpart Narendra Modi are set to announce formal negotiations for the signing of the Comprehensive Economic Partnership Agreement (Cepa) – the first free trade agreement for Bangladesh - following a bilateral meeting, according to official documents obtained by The Business Standard.
 
The Cepa aims to expand mutual trade and investment, while also focusing on building regional value chains, moves that can be shot in the arms at a time when global economies are sputtering to regain momentum.
 
If this agreement is reached, the gross domestic product of Bangladesh and India will grow by 1.72% and 0.03% respectively, according to a joint study report of the two countries.
 
Bangladesh's export earnings to India have been increasing for two years, having nearly doubled last fiscal year after crossing the $1 billion mark for the first time a year ago.
 
According to the Ministry of Commerce, if the Cepa is signed, Bangladesh's exports to India will increase by 190%.
 
It, however, comes with a caveat: the agreement also means India's exports to Bangladesh will rise by 188%, meaning Bangladesh's consistent trade deficit with its partner will not ease by much, but may improve.
 
Last fiscal year, Bangladesh imported about $14 billion from India, the bulk of which was food and industrial raw materials, machinery and equipment.
 
There are, however, other benefits of the Cepa.
 
Under Cepa, imports of essential commodities, raw materials and machinery from India can be made at a lower cost and more easily.
 
The agreement will also lead to the withdrawal of various non-tariffs and para-tariffs for Bangladeshi exports, increasing export potential with India and investments from the neighbouring country.
 
At the same time, new doors of possibilities will be opened for Bangladeshi investments in the Seven Sisters of India.
 
One of the major removals anticipated is the anti-dumping duty imposed on Bangladesh jute products.
In 2017, India imposed anti-dumping duties of up to $19 and $352 per tonne on Bangladesh jute products.
 
During Hasina's visit to India in 2019, Modi promised to withdraw the tariff, but it has not been done so far.
 
Last month, following the Bangladesh High Commission's meeting with India's Commerce Secretary BVR Subrahmanyam, it informed the commerce ministry that India will withdraw the existing anti-dumping, which will be announced in a joint statement during the visit.
 
On the food front, Hasina's visit may also see India setting a quota for the export of essential food products, including rice, wheat and onion, which will help Bangladesh meet domestic food demand amid the prevailing global crisis.
 
At present, India provides this kind of facility to Maldives.
 
If the quota system is introduced, regardless of food shortage in the international market or if India's domestic production decreases, India will still provide the agreed amount to Bangladesh.
 
Such an agreement would cushion Bangladesh against food supply shocks such as the one recently experienced during the Russia-Ukraine conflict.
 
Similarly, the PM's visit may also lead to the announcement of long-term fuel oil partnership with India.
 
Currently, the two countries have an agreement whereby Bangladesh will import fuel oil from India for the next 15 years through an under-construction pipeline.
 
Recently, officials of India's state refinery Numaligarh Refinery Limited told reporters in Dhaka that oil exports from India to Bangladesh will start through the pipeline from early next year.
 
Although the price of fuel oil in the international market is more than $100 per barrel, India is importing oil from Russia at a much lower price and exporting it to various countries.
 
Dhaka has been unable to import directly from Russia due to complications in the payment method amid SWIFT sanctions.
 
In this situation, the policy makers of the government are giving importance to the import of necessary fuel oil from India.
 
Foreign Minister AK Abdul Momen, at a press briefing on Sunday, confirmed the two countries will discuss fuel oil imports.
 
In a summary sent to the Prime Minister, the Ministry of Foreign Affairs mentioned that economic, commercial, power and energy cooperation as well as communication, security, common river water distribution and border management will be given prominence during Hasina's visit.
 
But even this year, the Teesta river water-sharing agreement will not happen. Instead a joint river commission meeting will compromise and sign water sharing for the Kushiayara.
 
Seven MOUs to be signed
 
Foreign Minister AK Abdul Momen said Bangladesh and India are likely to sign as many as seven Memorandum of Understandings (MoUs) during Prime Minister Sheikh Hasina's visit to the neighbouring country.
 
The MoUs are expected to address sectors like water, science and technology, railway, law, information and broadcasting among others.
 
"However, the discussion on the MoUs is ongoing. The number could increase further," added the minister.
 
An MoU on importing hydropower from Nepal is likely to be signed with Indian company GMR during the Prime Minister's visit, while it is also reported that the two PMs may jointly inaugurate the bridge built over the Rupsa River in Khulna through video conference.
 
"In recent years, both sides have sustained a high level of engagement including at the highest level between our two countries. The forthcoming visit of Prime Minister Sheikh Hasina will further strengthen the multifaceted relationship between our two countries based on strong historical and cultural ties, mutual trust and understanding," said Arindam Bagchi, official spokesperson, Ministry of External Affairs.
 
Prime Minister Hasina will be accompanied by a number of ministers, advisers, and secretaries, as well as a delegation of business houses of Bangladesh.
 
The PM will be hosted by President Droupadi Murmu and Vice-President Jagdeep Dhankhar, and hold a round of delegation-level talks with Prime Minister Narendra Modi at the Hyderabad House.
 
She will also attend a business event being organised by the Confederation of Indian Industries (CII).
 
The PM will further address an exchange meeting with India's top businessmen on 7 September.
 
Earlier, Hasina visited India in October 2019 at the invitation of the Prime Minister of India. At that time, Prime Minister Sheikh Hasina attended the World Economic Forum conference as well as holding a separate meeting with Narendra Modi.
 
On the other hand, Indian Prime Minister Narendra Modi visited Bangladesh on March 26-27, 2021, on the occasion of the golden jubilee of Bangladesh's independence, celebration of Mujib year and 50 years of Bangladesh-India relations.
 
Transshipment on the cards
 
Officials of the Ministry of Shipping said the two PMs may discuss the opening of regular transshipment facilities for Indian goods using Chittagong and Mongla ports.
 
India has completed four scheduled trial runs using Bangladesh's Chittagong and Mongla ports in the fastest time.
 
As a result, it is giving importance to regular transshipment facilities using these two ports.
 
India requested to keep the charges and fees unchanged and completed four trial runs in August and this September.
 
India may also request Bangladesh to implement the BBIN Motor Vehicle Agreement between Nepal, Bangladesh and India excluding Bhutan.
 
Besides, India may offer to re-open the pre-1965 rail routes between the then East Pakistan and India.
 
Award waits PM
 
The Energy and Resources Institute (TERI), an independent, multi-dimensional organisation, will award Prime Minister Sheikh Hasina with the Sustainable Development Leadership Award (SDLA) on 6 September.
 
The TERI has been giving this award since 2005.
 
Among the recipients of the award are - former chairman of Toyota Motor Corporation Shoichiro Toyoda, former president of Mexico Ernesto Zedillo, former Governor of California state of USA Arnold Schwarzenegger former secretary general of the United Nations Ban Ki-moon, former prime minister of India Dr Manmohan Singh and Chairman of Mahindra & Mahindra Ltd Anand Mahindra.
 
Furthermore, Adani Group CEO Gautam Adani will meet Hasina before a dinner ceremony at the Bangladesh House in New Delhi on Monday.
 
In a separate ceremony in New Delhi on Tuesday, Hasina will award the 'Mujib Scholarship' to the family of dead and wounded soldiers of the Indian Armed Forces who participated in the Bangladesh Liberation War.