India on project-opening spree amid China’s attempt to woo Bangladesh

India has taken a slew of initiatives, including launch of a multi-modal link via Chittagong port to Bangladesh, over the past two weeks for strengthening the trade ties amid China’s bid to increase influence in the country’s eastern neighbourhood.

As part of the latest initiative, 10 broadgauge (BG) locomotives were handed over to Dhaka by external affairs minister S Jaishankar and railways minister Piyush Goyal on Monday.

The central government has had to do some manoeuvering for these projects amid confrontation with the West Bengal government which has been creating hurdles to slow down cross-border land trade, citing the “spread of Covid” from Bangladesh.

Speaking at the handing over ceremony, Jaishankar highlighted the depth of India-Bangladesh ties while Goyal underscored the importance of railway connectivity to increase bilateral trade.

Recently China not only tried to lure Bangladesh via trade concessions, which critics dubbed a ‘dual-deficit and debt trap’, but also tried to use Bangladesh population for anti-Covid vaccine trial. Last week, Dhaka put on hold its earlier decision to allow the trial.

India and Bangladesh are jointly working to enhance rail connectivity by developing some crucial projects as well as by restoring some old rail links, said sources.

A total of 17 railway sector projects have been included in the Line of Credit (LoC) assistance extended by India to Bangladesh, with a commitment of $2.44 billion.

India has offered all LoCs to Bangladesh at a rate of interest of 1% per annum, repayment over 20 years with a moratorium for five years. Last Friday, the first container train to connect the two countries through Petrapole-Benapole border in West Bengal departed India. This train carried 40 containers of fast-moving consumer goods cargo and 10 containers of fabrics.

In June, Bangladesh railways had increased its monthly allocation of freight trains to Indian Railways by about a third. For the first time the Indian Railways ran a special parcel train beyond the country’s borders to Benapole in Bangladesh with dry chillies from Andhra Pradesh.

Last week the two countries also marked another historic achievement towards strengthening India Bangladesh maritime partnership. The first time ever movement of container cargo from Kolkata to Agartala through the Chattogram Port was successfully concluded. With this, the distance and time taken in transportation of goods for India, particularly the north-eastern states, will get reduced. It will enhance business services and revenue generation in Bangladesh, said people in the know.

This movement was undertaken under the agreement on use of Chattogram and Mongla Ports for movement of India’s transit cargo through Bangladesh.

Of total LoC exposure of India of more than $30 billion to 64 countries, $8 billion has been given to Bangladesh, making it the largest recipient (26%). India has also given an outright grant to Bangladesh totalling $155 million focused on projects relating to sanitation, waste management and urban planning.