The recent visit of Bangladesh’s Foreign Minister Dr Dipu Moni to India was the first official level after the Awami League (AL) assumed power. The joint statement issued after this visit includes many significant issues, such as, bilateral and regional connectivity, greater economic cooperation and extending port facilities to India – a long standing Indian request. Besides these, it also proposes cooperation in the power sector, re-opening of Sabroom-Ramgarh trade route, opening of land route at Demagiri-Thengamukh on the Mizoram border, establihing border haats (markets) in Meghalaya.

Most of these initiatives need to be understood from a broader perspective. Though Awami League has traditionally emphasized good relations with India, Hasina realizes that better relations are imperative for economic development of the country given its geo-physical location. Awami League in its election manifesto emphasized on a ‘charter for change’ which cannot happen without a significant improvement in bilateral relations. Hasina also realizes that it would not benefit the country to remain isolated in a fast globalizing world. Therefore connectivity has been an extremely important issue for the government.

Bangladesh has agreed to allow access to Ashuganj as new port of call, this will facilitate transportation of the over dimensional consignments for the gas based Palatana power project in Tripura. These heavy machines cannot be carried on land given the difficult terrain from Kokotta. From Haldia port the distance to the project site was 2,090 km but with access to Ashuganj port this distance will be reduced to 979 km through Badarpur-Karimganj route. Dhaka had rejected an earlier proposal to allow transit of this machinery. However, the Foreign Minister in a press conference in Dhaka clarifies that Ashuganj port is only for transporting machinery. Dhaka needs to allow Ashuganj for transit of Indian goods to the North-eastern states which has been a longstanding request of India. Providing permission to use Chittagong port is a very significant step indeed. Dhaka had turned down similar requests earlier. Commerce Minister of Bangladesh Col (retd) Faruk Khan speaking at a business conference in July had said, “We said in the manifesto that if elected, we would give a boost to regional trade by building Chittagong and Mongla ports as regional gateways. We have the mandate of the people for going ahead for regional integration."

Balance of trade has been one of the most contentious issues between India and Bangladesh. There are several non-tariff and para tariff barriers between the two countries. India has not agreed to assist in strengthening Bangladesh Standard and Testing Institute which will help mitigate the problem of harmonization of commodity standards. Duty-free access to Bangladesh commodity market has been a long pending issue. Though India had earlier agreed to import 8 million garment pieces duty-free it was not implemented as 18 per cent tax was levied on the product making it difficult for Bangladeshi garment manufacturers to gain access. To help the issue of trade balance, India should provide duty free facility to Bangladeshi goods as long as they meet the principle of Rule of Origin. Earlier India had lifted ban on Foreign Direct Investment by Bangladeshi entrepreneurs and had provided both bilateral duty concession and duty free access under SAFTA. Opening of trade points would be great help in this regard. Institutional mechanism and trade facilitation measures as agreed between the two countries will help the matter. Border haats, proposed earlier by the then Indian Commerce Minister Jairam Ramesh during his visit to Dhaka in 2007 has been agreed upon. These haats will be held at the Bangladesh-Meghalaya border to facilitate local trade. Similarly containerized cargo has been allowed by rail and water. Greater rail connectivity which was emphasized by Bangladesh’s Prime Minister Sheikh Hasina earlier during her interaction with a delegation of Federation of Indian Chamber of Commerce and Industries has been agreed to. To take this further, India has agreed to construct Akhaura-Agartala rail links.

Sharing the water of common rivers is yet another important issue. The recent controversy of Tipaimukh needs to be resolved at the earliest given the political campaign that has been orchestrated by the opposition against this project. India has agreed to share the details of the dam and has stated that it wil not adopt any step that would hamper the interest of Bangladesh. Both the countries are negotiating extradition of criminals under a bilateral arrangement. Currently the two countries have agreed to allow each other’s nationals who have been convicted for various crimes to complete their jail sentences in their respective countries. India has agreed to provide 100 MW power to Bangladesh on priority basis after the completion of feasibility study on “power grid interconnectivity for transmission from India to Bangladesh.”

The significance of this visit lies in the fact that Dhaka and New Delhi need regular bilateral interactions at the highest level given several complicated issues that confront the two countries. Most of these issues have not received the kind of priority that they deserve from the political class. This visit can be defined as cautious but is indicative of the definite steps that Dhaka wants to take in its relations with New Delhi. India needs to take this historic opportunity and accord priority and show magnanimity to repair its relations with one of its most important neighbours.