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India-Bangladesh Relations after the Foreign Secretary Level Talks

Smruti S. Pattanaik is Research Fellow at the Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile
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  • July 17, 2007

    The recently concluded Foreign Secretary level talks in Dhaka between India and Bangladesh saw agreement on three broad issues. The first of these related to sharing of intelligence pertaining to security. Secondly, India agreed to provide greater access to Bangladeshi goods to the Indian market, as earlier announced by Prime Minister Manmohan Singh during the SAARC summit held in New Delhi. And thirdly, the two countries agreed to take steps to implement the 1974 Indira-Mujib land boundary agreement, which has been a long-standing demand of Bangladesh. These talks took place after a gap of two years and that too when Bangladesh is being administered by a Caretaker Government (CTG). The significance of this development lies in the fact that the current 'apolitical' government is poised to remain in power till the end of 2008, which is when parliamentary elections are scheduled.

    The Army-backed CTG shares cordial relations with India, which maintained a studied silence in the wake of the former's assumption of power on January 11 amidst a volatile political situation. India had been cautiously watching the growing political instability in Bangladesh and heaved a sigh of relief when elections, scheduled for January 22, 2007, were cancelled. There has been some criticism of the Indian approach among Bangladeshi civil society groups. However, given the overwhelming nature of the India factor in Bangladesh's domestic politics, New Delhi has adopted an extra cautious approach, even going to the extent of ignoring Dhaka altogether. Moreover, the timing of the Secretary-level talks had nothing to do with India's approach towards the CTG as conservative religious parties in Bangladesh speculate. The talks were long overdue and could not be further postponed given that the CTG would be in power till the end of 2008.

    Two important issues that have drawn the attention of the media, the elite and of common people alike in Bangladesh are that of trade imbalance and border fencing. The issue of imbalance in trade has been repeatedly raised by Dhaka in the past. India had earlier proposed a free trade agreement (FTA) which, in its view, would help address the issue, and it cited the example of India-Sri Lanka trade relations in this respect. Bangladesh has, however, been reluctant to sign such an agreement given the asymmetric size of the markets of the two countries as well as because of its traditional opposition to bilateralism in its ties with India. Instead, it had expressed interest in a multilateral agreement within the SAARC framework. But the current state of SAFTA is not encouraging, and free trade under its ambit could be time consuming or may not even take off given Indo-Pakistan problems. India in turn offered a unilateral free trade pact to Bangladesh and announced that such access would be provided in phases with both countries sitting down to sort out how to reduce the number of goods on India's list that are protected by this arrangement.

    A related issue is that of non-tariff barriers. Standardising products meant for export, the rule of origin principles and inadequate clearing facilities at customs ports have been the major hurdles here. In the foreign Secretary level talks, a decision was taken to address the problem of standardization. Both the Bureau of Indian Standards and the Bangladesh Standards and Testing Institution will work out a framework to standardize products meant for export to the two countries. Export organizations in Bangladesh are working out a list of such products that would be considered for duty free trade with India. The hope is that India's negative list would not be too long, leading to tougher trade negotiations and delays in the implementation of free trade. This is a practice that has been common to South Asia. Most countries have large positive lists under SAFTA that include all items except those produced in neighbouring countries that qualify for free trade. At the same time, their large negative lists prevent the export of any potential products from their neighbours. It is to be hoped that India's offer of free trade does not end up making trade impossible, thus adding to the list of Bangladeshi grievances.

    It is true that Bangladesh's export basket is relatively small. It is also true that Bangladesh has opposed major Indian investments like that of the Tatas because of domestic politics, which in effect sends a negative signal to other potential private investors from India. Citing the lack of an adequate transport network and other facilities, Dhaka has opposed transit and trans-shipment facilities to Indian goods from the North-East as well as the use of Chittagong port by India, which could have earned valuable foreign exchange and improved the overall trade balance. Its opposition to the trilateral pipeline from Myanmar to India through Bangladesh, which would have earned it substantial transit fee, as well as its refusal to sign on to the multilateral Asian Highway project highlight its irrational and negative attitude towards India. In contrast, though its trade deficit with China is comparable to what it has with India, the Beijing-Dhaka relationship is quite free of grievances. Nevertheless, India's recent initiatives are welcome and both countries have agreed to remove non-tariff and para-tariff barriers that constitute major hurdles for trade in the region.

    The other major issue between Bangladesh and India is that of border fencing. From the very beginning Bangladesh has been opposed to the idea of India erecting a fence along the border, which it considered to be a defensive structure. But Indian persistence made it reluctantly agree to the construction of a fence at the distance of 150 yards from the border as defined by the Indira-Mujib accord of 1974. Many in Bangladesh perceive the fence as unfriendly and representing lack of trust. In contrast, from an Indian perspective, the main purpose of the fence is to prevent smuggling, illegal immigration and use of a practically open border by insurgents and criminal elements. Though the fence has not completely stopped illegal cross-border movement because of topography and the attitude of provincial governments along the border, the fact remains that it has addressed to some extent the issue of smuggling and people crossing the border at will. Instead of seeing the fence as an unfriendly act, Bangladesh should learn to appreciate the adage that good fences make for good neighbours. Instead of the daily trading of charges about the border being breached, which on some occasions have erupted into the exchange of fire between the two border forces, the fence helps to keep the border tranquil.

    India-Bangladesh relations have a distinct politico-economic dynamic and a complex socio-cultural history. The political atmosphere between them has been a victim of domestic politics in Bangladesh. While a fence cannot increase or decrease the warmth of bilateral ties, there are, however, certain practical problems that need to be addressed. People living in the border areas in Bangladesh often complain about flood lights on the fence, which affects their sleep. This light also attracts insects which eat the crops. A second factor that can be addressed is intelligence sharing, given the cross border movement of criminal and insurgent groups. This issue is slated to be addressed in the upcoming meeting of the Home Secretaries of the two countries. Thirdly, the proposed Dhaka-Kolkota Moitree Express, which is scheduled to start regular service twice a week from September 2007, will surely enhance people to people contact.

    In addition, the two countries seem to be working closely to improve bilateral relations on other fronts as well. Two joint mechanisms have been established, one on the border and the other on sharing the waters of common rivers. Dhaka and New Delhi have identified the completion of boundary demarcation as well as exchange of enclaves and adverse possessions as issues that require early solution. This new positive momentum in the political sphere needs to be built on by providing a socio-economic structure that would make India-Bangladesh relations fruitful in the long run.