A New Start of BBIN Connectivity

 

After Prime Minister Sheikh Hasina’s bilateral visit to India last month, the much-debated issue at both domestic and international sphere is allowing transit to India. Among the 10 MoUs signed and several announcements made during the visit, connectivity initiatives are most debated. As soon as the visit ends, the announcement of the commencement of a trial run of an Indian freight train using Bangladesh’s railway has created speculations in Bangladesh. Indian Foreign Secretary Vinay Mohan Kwatra stated that India wants to conduct a trial run through Bangladesh in July.

It has been the subject of increased discussion in Bangladesh following Kwatra's announcement. The majority of the theme has been dedicated to negative critiques. It is being asserted that Bangladesh has provided rail transit to India without getting anything in return, indicating that this visit did not yield any significant outcome for Bangladesh.Some have raised concerns about the approval of transit, suggesting that it could potentially compromise Bangladesh’s sovereignty to India.

The proposal was first tabled in a high-level meeting between the BR and IR, held inApril 2022at the Rail Bhaban in Dhaka.The Indian side proposed to operate trains from Kolkata to Haldibarivia Gede-Darshana and Chilahati-Haldibariroute. It was expected to create scope for the Indian Railway to revive the old Siliguri-Sealdah route crossing Bangladesh. The Kolkata-Siliguri line was operationalize via Chilahati-Haldibaripoint until it was permanently closed during the Indo-Pak war in 1965.However, India’s revised proposal mentioned that the route will be extended from Haldibari to Dalgaon station on the Bhutan border. Once operationalize, it will decrease the distance at around 200kms, reducing the travel time by nearly three hours.

The deception claiming that the rail transit project's approval is only for India's benefit is somewhat misleading. In addition to connecting two different parts of India through the transit facility,Bangladesh will also have the opportunity to establish rail connections with Nepal and Bhutan. The two countries inked a MoU which allows Bangladesh to operate train to third countries using Indian railways. With the signing of the MoU, Bangladesh would be able to transport goods to Nepal and Bhutan through Indian territory.

Nepal and Bhutan are landlocked countries, which implies that it lacks the opportunity to transport goods by sea. Consequently, the two nations are reliant on India for their external trade. When products are imported, they are initially unloaded at Indian ports and subsequently transported to land ports in Nepal and Bhutan. In the same manner, the two countries import products from Bangladesh. Nevertheless, Bangladesh will be able to export products directly to Nepal via railway if the opportunity to utilize Indian railways is available. This will result in a substantial increase in the export of Bangladesh to Nepal and Bhutan.

There is a good demand for several Bangladeshi products in Nepal. Fertilizers are the most exported product to Nepal. Bangladesh's exports to Nepal valued at around $44.33 million and imports from Nepal accounting for $4.34 million in the fiscal year 2022-2023.Due to lack of direct road connectivity, bilateral trade has been remained low for a long time.To tap the trade potentials, Bangladesh has sought permission to export to Nepal using India's roads, though India has refused to grant. After a longstanding status quo, in 2021, India has allowed the export of fertilizers to Nepal by rail. Since then, Bangladesh exports a substantial amount of fertilizer to Nepal every year through India’srailways.

The 1976 transit agreement between Bangladesh and Nepal includes six ports of calls, along with two proposed rail links for the movement of transporting vehicles to and from Nepal. The first one is Rohanpur-Singhabad (Pashchimbanga)-Jogbani (Bihar)-Biratnagar (Nepal). With 514 KM distance, the Second one is Rohanpur-Radhikapur (WB)-Roxol (Bihar)-Birgunj (Nepal). As the first route is not prepared for operationalize the crossborder rail connection, Bangladesh Railway was allowed to transport the fertilizer consignments via the 514 km Biral–Roxol-Birgunj route.

The India-Bangladesh rail transit agreement will open-up a new era by establishing a direct rail network with Bhutan. The route through which India wants to operate trains will also be connected to Bhutan border through the Chilahati-Haldibari interchange point. After a reviewed trial run proposal from India last month, Bangladesh proposed to extend the route to the Hasimara station on the Bhutan border.Since Bhutan has no railway, the train from Bangladesh would stop at Hasimara station, 18 km from the border. However, the construction of a rail link from Assam's Kokrajhar to Bhutan's Gelopois is underway, with the 10 billion rupees funding by India. After the 58 km line is completed, Bangladeshi trains would direct to Bhutan by this route.

Bangladesh exports mostly cosmetics, juices, biscuits, snacks and confectionery products toBhutan. Also, there is a high demand of various regular commodities in the Bhutanese market, including clothes, mineral water, medicines and plywood. Bangladesh, on the other hand, mostly imports fruits, limestone, and other natural resources from Bhutan.In the FY 22-23, Bangladesh’s exports to Bhutan stood at around USD 22 million against the import of goods equivalent to USD 37 million. To facilitate export and import between the two countries, Bhutan’s cargo vehicles reach Bangladeshi ports using Indian roads.

To increase trade volume, the two countries signed the 'Protocol of the Agreement on the Movement of Traffic in Transit' between Bangladesh and Bhutan in March 2023. According to this transit agreement, Bhutan, like India, will be able to import and export goods to third countries by road, river and rail using Bangladeshi ports.As Bhutan refused to join the BBIN motor Vehicles agreement, Bangladesh’s vehicles are not allowed to transport goods to Bhutan using Indian territory.Bangladesh will have the opportunity to export to Bhutan by rail for the first-time, circumventing Bhutanese vehicles.

The two countries implemented a preferential trade agreement (PTA) in 2022, doubling bilateral trade.Bangladesh still has a trade deficit of 15 million due to lack of transit facility in Bhutan. With the completion of the transit agreement with India, Bangladesh will have the opportunity to export to Bhutan by rail for the first-time bypassing Bhutanese vehicles. If Bangladesh can grab and utilize the opportunity, trade deficit would be reduced with increasing export to Bhutan.Hence, allowing rail transit to India cannot be considered a one-sided gain for India, as it is instrumental in establishing rail connectivity with Nepal and Bhutan. The transit agreement with India holds significant potential to harness the untapped trade potential with these two south Asian countries. It could be the fresh start of an alternative to the long-pending BBIN Motor Vehicle Agreement, to enhance connectivity across the 4 closest South Asian neighbors.

 
Sanjay Debnath is a Dhaka-based
political analyst.