Originally Published 2019-01-02 08:08:14 Published on Jan 02, 2019
India and Bangladesh must seize the opportunity to further enhance connectivity and trade ties
The bilateral transformation

The spectacular victory of the Grand Alliance led by the Awami League (AL), headed by incumbent Prime Minister Sheikh Hasina, in Bangladesh’s 11th general election, has delighted her supporters. This election is also a milestone for the coming of age of a new generation which is avowedly aspirational and is tired of the old political discourse that had deeply divided politics in Bangladesh. They have voted for economic progress and a secular polity.

The margin of victory has shocked and dismayed the Opposition parties that had coalesced into the National Unity Front (NUF), a coalition at whose core is the Bangladesh Nationalist Party (BNP), the AL’s bitter political rival. Former AL stalwart and famous jurist Kamal Hossain provided the leadership glue for the Opposition coalition. Nominally led by its Chairperson, former Prime Minister Khaleda Zia, currently in jail for corruption, the BNP’s guiding force is U.K.-based acting-Chairman Tarique Rahman, her controversial son who fled from the country in 2008 and lives in exile. He is convicted of money laundering and conspiracy to murder.

Brute majority

The AL has obtained a brute majority of 288 seats in a unicameral Parliament which has 300 directly-elected seats and 50 seats reserved for women. The latter are elected by the electoral college of directly-elected MPs, with proportional representation to parties elected to the Parliament.

Mr. Hossain’s monumental failure to deliver has left him and other Opposition leaders hurling allegations that the elections were “farcical” and asking that new elections be held under a non-partisan caretaker administration. The NUF managed to win just seven seats. The Election Commission, while taking note of some electoral malpractices and promising investigation, has declared the results valid and rejected the demand for new elections.

The margin of victory has lent some traction to persistent allegations of electoral malpractices, hounding of the Opposition, large-scale arrests of Opposition workers and intimidation of voters. Election-related violence on polling day claimed 17 lives. Several Opposition candidates withdrew from the fray, citing violent obstruction by AL workers, kidnapping of their election agents and voters being obstructed from casting their votes. Yet international observers have concluded that the elections were largely peaceful, fair and credible.

Though dogged by two consecutive controversial elections and increasing perceptions of authoritarian behaviour, Ms. Hasina is set for another five-year term in office. She has an enviable record of delivering record economic growth. Bangladesh’s GDP grew at a rate of 7.6% in the last quarter, making it one of the fastest growing economies in the world.

A bipartisan consensus

During the last decade of Ms. Hasina’s tenure as Prime Minister, high-level Bangladesh-India engagement has intensified. There is an irrevocable and irreversible bipartisan political consensus in India for upgrading relations across a comprehensive interface of ties. India’s ‘neighbourhood policy’ has focussed on Bangladesh, which has emerged as a key interlocutor in India’s ‘Act East Policy’ and sub-regional groupings like BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) and the BBIN (Bangladesh, Bhutan, India, Nepal) Initiative. In Bangladesh too, a growing domestic political consensus, overriding fractious politics, has emerged in favour of close ties with India. Denial of support to Indian insurgent groups, with insurgent leaders handed over to India, has progressively built trust and confidence between the two countries. Bangladesh is India’s largest trading partner in South Asia with an annual turnover of around $9 billion plus an estimated informal trade of around $8-9 billion, across the 4,100-km-long porous border. Cooperation in connectivity, energy, security and intelligence matters has intensified. The Padma multipurpose bridge and the Akhaura-Agartala rail link will dramatically change connectivity within Bangladesh and with India. Waterways are also being revived to reduce the cost of trade.

Improvement in bilateral ties has led to newer areas of cooperation such as cyberspace. Bangladesh has provided cyber connectivity between the international gateway at Cox’s Bazar to Agartala for faster Internet connectivity in India’s northeastern States. India has also become a partner in Bangladesh’s nuclear power programme, with the beginning of construction at the Rooppur nuclear power plant. India is poised to export around 1100 MW of power to meet the energy deficit in Bangladesh. Power projects totalling more than 3600 MW are under implementation by Indian companies.

The adverse balance of trade has been a bilateral issue. The asymmetry in the economies of India and Bangladesh is the major factor. To enable more Bangladeshi exports to flow into India, duty free entry was granted in 2011 under the South Asian Free Trade Area. This has led to an increase in exports from Bangladesh from around $350 million to the current level of around $900 million. Bangladeshi exports have plateaued because of demand constraints in India and also because of limited items in the Bangladeshi export basket. An SEZ in Bangladesh for Indian manufacturing companies has been mooted and notified. When operational it will encourage Indian companies to manufacture there and export to India. Indian investment in Bangladesh has reached $3 billion. In 2017, 13 agreements worth around $10 billion were signed in the power and energy sectors.

To offset the economic asymmetry, India has granted Bangladesh generous lines of credit (LOCs) and grants, with commitments reaching $8 billion. While LOCs mainly cover infrastructure and connectivity projects, grants flow into social sector development. Capacity building under the Indian Technical and Economic Cooperation programme is an important strand in bilateral ties and people-to-people interaction. Bangladeshis are among the largest groups of tourists into India. The visa regime has been liberalised and over a million visas are issued to Bangladeshi citizens annually.

With the rise of religious radicalism and terrorism, defence and security issues will require greater cooperation. Bangladesh has taken strong and effective steps against those who have been inspired by the Islamic State and involved in terrorist strikes. Islamist organisations have been breeding grounds for religious radicals and extremist views. These forces will pose a considerable challenge for governance in Bangladesh in the future. With the massive loss, the NUF is likely to boycott the Parliament and take to street agitation, sullying Bangladesh’s reputation as a democracy.

Challenges ahead

There will be setbacks in India-Bangladesh ties, like the current Rohingya issue, which has imposed a huge economic and security burden on Bangladesh. Bilaterally, the issue of the illegal migration has already acquired a high profile in India with the publication of the draft National Register of Citizens in Assam. This will require deft handling of bilateral ties. Sharing of river waters will remain a challenge, but not an insurmountable one.

China’s security and economic footprint has grown in South Asia and managing this will remain a challenge for both countries. While Bangladesh is overwhelmingly dependent on military hardware from China, India has provided a $500 million LOC for procurement of defence-related goods from India. This momentum must be maintained and intensified.

India has welcomed the election results and Prime Minister Narendra Modi was the first leader to telephone and congratulate Ms. Hasina. Bangladesh-India relations have reached a stage of maturity and with further upgrading and integration of infrastructure, bilateral ties can be expected to grow stronger in the future.

This commentary originally appeared in The Hindu.

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Pinak Ranjan Chakravarty

Pinak Ranjan Chakravarty

Pinak Chakravarty was a Visiting Fellow with ORF's Regional Studies Initiative where he oversees the West Asia Initiative Bangladesh and selected ASEAN-related issues. He joined ...

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