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India-Bangladesh Ties Get a Pipeline Boost, Tackling China Should Follow

China’s increasingly muscular foray into India’s neighbours has posed a challenge to bilateral ties with Bangladesh.

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The joint inauguration of the Maitri transborder pipeline by Indian Prime Minister Narendra Modi and Bangladeshi PM Sheikh Hasina marks yet another historic milestone in bilateral ties between the two close neighbours. 

Since it was conceived and planned, the pipeline has taken four years to build since construction commenced in 2018. The India-Bangladesh Friendship Pipeline or IBFPL, as it has been named, is the first of its kind in the sub-continent. India, despite being an oil importer, has emerged as the world’s third-largest producer of hydrocarbon products after USA and China

Snapshot
  • The India-Bangladesh Friendship Pipeline or IBFPL, as it has been named, is the first of its kind in the sub-continent.

  • The second such pipeline is coming up between India and Nepal, also for the supply of petroleum products. Another such pipeline to Bhutan would complete the BBIN Quad.

  • With the completion of the pipeline, India’s development assistance to Bangladesh has reached a peak, overtaking China and has currently reached USD 10 billion.

  • While Bangladesh has joined China’s Belt and Road Initiative [BRI], it has been far more cautious than Sri Lanka in choosing projects funded by China and avoided entrapment in China’s “debt trap” diplomacy.

  • Bangladesh has got a raw deal with China preventing any UN-mandated action against Myanmar for strategic reasons. The Rohingya refugee has, unfortunately, received scant attention from the international community.

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First Cross-Border Pipeline in Indian Subcontinent

The 132 km pipeline from the Numaligarh Refinery in Assam will supply around 1 million tonnes of High-Speed Diesel [HSD] annually to Bangladesh, a net energy importer like India. The pipeline was planned keeping several emerging issues in mind, including those of environmental protection and climate change. 

The huge saving in transportation costs and reduction in the carbon footprint are collateral benefits of this unique project. The Rs 377 crore project was funded by India, with Bangladesh using the Line of Credit facility for it to bear its share of the expenditure, amounting to Rs 285 crores.

The pipeline adds another milestone in connectivity and cements bilateral ties between the two neighbours. It will run from the Siliguri-based marketing terminal of the Numaligarh Refinery Limited (NRL) to the Parbatipur depot of Bangladesh Petroleum Corporation (BPC). This fuel supply deal between the two countries will be in force for 15 years as per bilateral agreement, with an option for further extension after mutual consensus.
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The second such pipeline is coming up between India and Nepal, also for the supply of petroleum products. Another such pipeline to Bhutan would complete the BBIN Quad.

The two PMs also inaugurated the commencement of construction of the 4th dual gauge rail lines between Dhaka, Tongi, and Joydebpur. Dual gauge enables both the broad gauge and metre gauge goods and passenger railway wagons and coaches to run on these tracks, increasing load-carrying capacity with India.

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Indo-Bangladesh Friendship Treaty

Maitri or friendship has become the catchphrase for several transborder India-Bangladesh connectivity projects. It began with the Maitri passenger train in 2008 between Dhaka and Kolkata. This was followed by Maitri bridge across the river Feni along the Bangladesh border in Agartala. This bridge which started operating in March 2021, provides a vital transport connectivity from Tripura to Chittagong, the largest port in Bangladesh.

The reduction in the cost of supply of HSD and the reduction in the carbon footprint are the two most significant aspects of this pipeline. Hitherto, HSD was supplied via road tankers and barges at considerably higher cost while adding to the carbon footprint.

With the completion of the pipeline, India’s development assistance to Bangladesh has reached a peak, overtaking China and has currently reached USD 10 billion. Bangladesh tops the list of countries with which India has development partnership agreements.
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India-Bangladesh bilateral ties began their current upward trajectory beginning 2007 and have advanced by leaps and bounds under Modi and Hasina since 2014. There is no doubt that this phase has been the most productive in bilateral ties over the last half a century. India too has re-focussed its neighbourhood policy in which Bangladesh has acquired a central role. Economic crises in Sri Lanka and Pakistan have positioned Bangladesh as a shining example of successful economic management.

Bilateral ties have achieved significant milestones in building political capital, boosting trade and connectivity, along with partnerships in key areas like training and capacity building. During this engagement, both sides settled pending issues like land and maritime boundary demarcation, security, connectivity, development cooperation, cultural exchange, power and energy, trade and commerce, blue economy, intelligence cooperation, and defence. Bangladesh also decided to award 200 scholarships to children of Indian military personnel who laid down their lives in the 1971 War of Liberation.

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Bangladesh: The Greatest Beneficiary of India’s ‘Neighbourhood First’ Policy

The COVID pandemic and the Ukraine war have taken a toll on all countries but the road to recovery has begun. India has adopted policies to ensure Energy and Food Security for itself and its neighbour Bangladesh. During the COVID pandemic, it was the railway connectivity that helped in delivering essential food items to Bangladesh at a time when land borders were shut down. The importance of transport connectivity, thus, acquired a new salience. 

The Maitri pipeline will contribute to the energy security of Bangladesh. Rising Energy consumption is natural for a growing economy and bilateral cooperation in the energy sector has progressed impressively. Apart from buying 1200 MW of electricity from India, the 50:50 joint venture 1320 MW thermal power plant is being built at Rampal by the NTPC. The 1600 MW power plant in Godda, Jharkhand built will supply power to Bangladesh via a dedicated transmission line by December 2023. 

The realistic vision of the leadership on both sides has been the most significant factor in boosting bilateral ties. Security cooperation has been a fundamental factor in building trust and confidence. A pragmatic approach has led Bangladesh to emerge as India’s largest trading partner in the sub-continent, with an annual turnover of USD 18 billion in 2023.

Bangladesh is also India’s largest development partner, the most productive connectivity partner, and the largest source of foreign tourists. Bangladesh has become the fourth largest export destination for India with a growth of over 66 percent from USD 9.69 billion in FY 2020-21 to USD 16.15 billion in FY 2021-22.

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The China Challenge Amid Bangladesh’s Refuge Crisis

Contentious issues remain on the bilateral menu. Issues relating to river water-sharing have not been ignored. Incremental progress has been made in the water-sharing agreement of the Kushiyara river, a temporary water-sharing arrangement on the river Feni and a renewed effort by the Joint Rivers Commission [JRC] to examine sharing of waters of 54 transboundary rivers and flood data sharing.

Human trafficking from Bangladesh into India is an emotive issue and will impact bilateral ties if pragmatic policies are not adopted. How to deal with illegal Bangladeshi migrants will continue to tax policymakers in both countries. Consultation between the two countries should be started on this issue, setting aside sentimental and emotional aspects.

The road to intensifying future cooperation lies in the expeditious conclusion of the Comprehensive Economic Partnership Agreement [CEPA]. Bangladesh’s economic success has enabled it to reach Developing Country status in 2026, as per the UN benchmark.

While this is a remarkable achievement for Bangladesh which was decried as an “international basket case” at the time it was born, the CEPA is crucial, as it will facilitate the continued grant of duty-free privileges by India which was first granted in 2011.

China’s increasingly muscular foray into India’s neighbours has posed a challenge to bilateral ties with Bangladesh. While Bangladesh has joined China’s Belt and Road Initiative [BRI], it has been far more cautious than Sri Lanka in choosing projects funded by China and avoided entrapment in China’s “debt trap” diplomacy.
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Bangladesh has faced the Rohingya refugee issue with courage, patience, and humanitarian empathy. The burden of hosting over 10 lakh refugees is an onerous one. Myanmar’s military government shows no signs of taking back the Rohingyas and the latter are also fearful of returning.

The country has got a raw deal with China preventing any UN-mandated action against Myanmar for strategic reasons. The Rohingya refugee has, unfortunately, received scant attention from the international community.

The most pressing domestic political challenges in Bangladesh come mainly from Islamists and religious radicals. PM Hasina has striven to re-establish the secular nature of Bangladesh’s polity in the teeth of opposition from Islamists who want to impose a Taliban-inspired governance system. PM Hasina is not a leader to be cowed down or intimidated. She has restored secularism as a founding principle in the Constitution and ensured that war criminals have been convicted and executed.

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While the Islamists and their Pakistani patrons seek to undermine bilateral ties, better intelligence cooperation has helped both sides to tackle these disruptive elements. Hence, closer cooperation against this menace is a sine qua non for maintaining bilateral ties on even keel, if future economic growth and prosperity for both countries have to be ensured. 

(The author is a former Secretary in MEA, a former Ambassador and High Commissioner to Bangladesh; he is a founder Director of DeepStrat, a think tank and a Visiting Fellow at ORF, Delhi. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)

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