India-Bangladesh Relations & Forecasts April 7, 2017
TABLE OF CONTENTS INTRODUCTION
1
TEESTA WATER-SHARING AGREEMENT
2
DEFENSE PACT
5
MILITANCY
7
INDIAN ECONOMIC INVESTMENT IN BANGLADESH
10
POLITICAL OPPOSITION TO INDO-BANGLADESH RELATIONS
13
FORECASTS
15
C 1003, ONE BKC, G Block, BKC, Mumbai – 400 051, India.
INTRODUCTION Bangladeshi Prime Minister (PM) Sheikh Hasina is slated to visit Delhi between 7-10 April. The visit follows a diplomatic trip to Dhaka by Indian Foreign Secretary S.Jaishankar in February during which he and his counterpart Mohammad Shahidul Haque reviewed bilateral relations between the two countries. The Secretary’s visit was to confirm certain deliverables ahead of PM Hasina’s visit to India. Since the ascendancy of PM Narendra Modi to the helm of affairs, Bangladesh and India have seen a steady strengthening of ties, specifically following the ratification of the 1974 border pact by the leaders. Various bilateral issues such as security, border management, trade, commerce, power, energy, shipping and railways are likely to be discussed during the diplomatic visit of the Bangladeshi premier. The upcoming diplomatic engagement will be a further thaw in warm ties between the two rapidly growing economies. This report highlights the major issues, challenges and forecasts for the decades old relationship between the South Asian countries. While the Bangladeshi PM’s visit is liable to be directed at bolstering economic and defense agreements between the two countries, there still remain certain crucial issues that have remained unresolved and served as a matter of contention for the incumbent government in Dhaka. The persistence of the status-quo on the Teesta Waters Sharing Agreement, which was an issue that was expected to be resolved after PM Modi’ visit to Bangladesh in 2015, has proved a disappointment. Further, continued efforts by China to engage Bangladesh as a strategic partner with the gargantuan credit lines extended by Beijing to Dhaka have acted to trouble New Delhi, given that Chinese interference in the Bay of Bengal region is likely to further complicate the geopolitical situation in South Asia. The sale of submarines by China to Bangladesh has additionally raised concerns in India. Cross-border militancy across the porous frontier between the two countries and the rising threat of militants seeking refuge in India has acted to perturb the Modi government, which has recently formed governments in three Northeast Indian states. Political opposition to the soon to be signed defence pact between Bangladesh and India by the Bangladesh Nationalist Party (BNP) has indicated that a section of the Bangladeshi population remains sceptical of PM Modi’s overtures.
Various bilateral issues such as security, border management, trade, commerce, power, energy, shipping and railways are likely to be discussed during the diplomatic visit of the Bangladeshi premier. The upcoming diplomatic engagement will be a further thaw in warm ties between the two rapidly growing economies.
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TEESTA WATER-SHARING AGREEMENT The Teesta River originates from the Pahunri (Teesta Khangse) Glacier in Sikkim and enters Bangladesh, joins the Brahmaputra before emptying into the Bay of Bengal. The Bengal region is a hotbed for paddy cultivation. Paddy cultivation requires excessive irrigation and the Rangpur division in Bangladesh depends on Teesta’s waters. 83 percent of Teesta’s catchment areas lie in India, the remaining 17 percent is in Bangladesh. Following negotiations initiated in 1983 between Bangladesh and India, an agreement was reached which allocated 39 percent of Teesta’s water to India and 36 percent to Bangladesh, while 25 percent was left unallocated for a later resolution. The lesser share for Bangladesh can be attributed to the groundwater regeneration that takes place at two embankments on Teesta, one at Gazaldoba in Jalpaiguri in West Bengal, India and at Dalia in Lalmonirhat in Bangladesh. In 2011, an interim agreement was reached between India and Bangladesh allocating 42.5 percent of the river waters to India and 37.5 percent to Bangladesh, specifically during the dry season. PM Modi during his visit to Dhaka in 2015, had proclaimed that ‘river waters should build India-Bangladesh ties and not disrupt them’. He was accompanied by West Bengal Chief Minister (CM), Mamata Banerjee during his visit. However, Banerjee maintained her silence over the issue. The main obstacle for the Teesta Water Sharing Agreement remains Banerjee’s consent. The mercurial CM was at the forefront of protests against the proposed agreement in 2011, when the then PM, Dr .Manmohan Singh and Sheikh Hasina reached the 42.5/37.5 formula. According to Article 253 of the Indian Constitution, the Union can approve any transboundary river water treaty with a coastal state, however the centre cannot do so arbitrarily without taking into account the socio-economic effects of the respective treaty in catchment areas. Banerjee’s opposition stemmed from a supposed misunderstanding, believing that Bangladesh would receive 48 percent (33,000 cusecs) of water annually, instead of 25,000 cusecs, earlier agreed upon. As per Banerjee, the release of such a large quantity of water into Bangladesh would severely affect irrigation systems in five North Bengal districts, including Coochbehar, Jalpaiguri, South Dinajpur, North Dinajpur and Darjeeling. Incidentally, these districts are amongst the poorest in West Bengal.
As per Banerjee, the release of such a large quantity of water into Bangladesh would severely affect irrigation systems in five North Bengal districts, including Coochbehar, Jalpaiguri, South Dinajpur, North Dinajpur and Darjeeling. Incidentally, these districts are amongst the poorest in West Bengal.
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Growing populations, increasing urban development and food consumption in the South Asia region have led to a sharp increase in demand for freshwater. As seen across the world, shortage of water for a growing population leads to security concerns for nations in a water deficit region. India has constantly voiced its displeasure over Chinese attempts to dam the Brahmaputra and deviate its course for the country’s consumption. Mutually binding diplomatic frameworks remain the only alternative to resolving water sharing issues that have developed in South Asia between countries such as Bangladesh, China, India and Pakistan. International Laws might provide essential mediation when it comes to non-conformity between water-warring nations. India due to its location has long been an epicentre for these water conflicts and might become water-deficient by 2050 if adequate steps are not taken.
A river-linking project which was proposed by the Atal Bihari Vajpayee-led NDA government has found new life with the advent of the Modi administration. This might further the cause of improving the irrigation apparatus in Bengal. However, the project which also envisions a linking of the Manas, Teesta and Ganges rivers has been vehemently opposed by Bangladesh,
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due to the downstream shortage likely to be faced in the case the linkages are constructed. India and Bangladesh might need to revert to the Joint Rivers Commission (JRC) which was set up in 1972 for the purpose of bilaterally resolving water management issues. The JRC might aid the process of setting certain norms to resolve all transnational river disputes between India and Bangladesh. The settlement of the land boundary problem and exchange of enclaves between the two countries might act to prove that anything can be possible if bilateral talks between two friendly nations are initiated. Taking into consideration the re-election of the Mamata Banerjee-led All India Trinamool Congress (AITC) in 2015 in West Bengal, the state government seems to have taken a placatory position with regards to the Teesta Water Sharing Agreement. On a personal level, Banerjee had promised her positive support to the Sheikh Hasina government visit with PM Modi in 2015 over the issue. While, regional politics has played a pivotal role in defining the opposition displayed by the AITC government to the water sharing agreement, the CM’s re-election as well PM Modi’s unwavering popularity across the country might lead to some breakthrough with regards to the issue in the days to come. That said, famine conditions that develop in both West Bengal, Bangladesh and the substantial number of regions that depend on the water of the Teesta and its tributaries might lead to further complications in the resolution of the water-sharing woes.
The settlement of the land boundary problem and exchange of enclaves between the two countries might act to prove that anything can be possible if bilateral talks between two friendly nations are initiated.
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DEFENSE PACT In October 2016, then Defence Minister Manohar Parrikar traveled to Dhaka to finalise the outline of a proposed long-term defense cooperation agreement. The comprehensive 25-year framework agreement is meant to lay the foundation for bilateral defense projects as well as future joint military exercises. India is also slated to offer Bangladesh a 500 million USD credit line for the purchase of military hardware, including purchasing of patrolling boats for the coastguard and hardware items such as radars in air defense. Several Memorandum of Understandings (MOU) have already been finalized and another dozen deals are likely to be signed between PM Hasina and the Modi administration. The traditionally close relations between Bangladesh and China with respect to defense following the 2002 defense agreement signed between the two nations can be cited as the reason for the Indian push in moving towards further bilateral defense cooperation with Dhaka. China currently supplies Bangladesh with arms, military equipment, tanks, frigates, fighter jets among other essential defense requirements. The recent sale of two Type 035G diesel-electric submarines to Bangladesh by the Chinese might have acted to further instigate India into moving in for the kill. India has also been concerned over China’s intentions of building seaports and bases for submarines in the Bay of Bengal, that could hold Chinese naval vessels and submarines in the future. Further, Bangladesh signed a 1 billion USD arms contract with Russia in January 2013. Moreover, news of procurement of eight multi-combat aircraft from Russia for the Bangladesh Air Force have been doing the rounds. Earlier, Bangladesh has bought MI-8, MI-171 helicopters and MiG-29 fighter jets from Moscow. The Bangladesh-India defense agreement that will be signed has been looked at with a degree of scepticism by subject matter experts in Dhaka. Sources have indicated that Bangladesh was earlier reluctant on signing a pact with Delhi along with the inclusive configuration of the agreement and was rather looking for a Memorandum of Understanding (MoU) with India with regards to the defense vertical. Balancing relations between the two Asian giants might have persuaded the Bangladeshi establishment in going forward for a circumstantial agreement with India. While the Sheikh Hasina government relies on China for most of its military requirements, it has shared cordial relations with India since the 1971 Liberation War when Indian troops had aided East Pakistan liberate itself from Pakistan. Further, over-dependence on a single country with regards to military equipment, might prove detrimental for Bangladesh in the long-run in a crucial sector such as defense, especially at this stage, when the country is developing at a phenomenal rate. Multiple procurement sources for the defense sector might aid Dhaka in increasing its collective regional capacity.
Further, Bangladesh signed a 1 billion USD arms contract with Russia in January 2013. Further, news of procurement of eight multi-combat aircraft from Russia for the Bangladesh Air Force have been doing the rounds. Earlier, Bangladesh has bought MI-8, MI-171 helicopters and MiG-29 fighter jets from Moscow.
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MILITANCY Bangladesh and India share a 4,096 kilometre international border, which has historically been porous due to its riverine and marshy nature, that makes it relatively unchallenging for illegal migrants to enter Indian border states such as Assam, Mizoram, Meghalaya, Tripura and West Bengal. The Indian Border Security Force (BSF) and the Border Guards Bangladesh (BGB), man the frontier on their respective sides of the international border. The problem of recurring illegal migration into India from Bangladesh led to Delhi’s call for a 4,000 kilometre fence, to seal the Indo-Bangladesh border. The total length of the Indo-Bangladesh border to be fenced is 3286 kilometres out of which 2535 kilometres fencing was completed by 2008. Plans for fencing the remaining portion of the international border has been delayed due to non-feasibility of this area which is riverine or low lying and is also attributed to pending land acquisition cases. This porous international border has helped Bangladeshi militant groups infiltrate into India and raised concerns about the potent threat by them to India’s national security. Sources indicate that, militant infiltration increased more than threefold in 2016, compared to last year’s statistical data, with approximately 2,010 militants, mainly belonging to the Jamaatul Mujahideen Bangladesh (JMB) and Harkat-ul-Mujahideen Bangladesh (HuJI-B) crossing over into India. The number of militants that infiltrated into India in 2015 and 2014 was 659 and 800 respectively. Three basic militant organizations have been identified to be operational till date in Bangladesh. These are the JMB, HuJI-B and the Ansarullah Bangla Team (ABT). However, constant eradication efforts by the Bangladeshi government (specifically the Sheikh Hasina administration) in the form of targeted counter-terrorism measures have led to the destruction of certain groups and formation of multiple factions within these outfits.
Sources indicate that, militant infiltration increased more than threefold in 2016, compared to last year’s statistical data, with approximately 2,010 militants, mainly belonging to the Jamaatul Mujahideen Bangladesh (JMB) and Harkat-ul-Mujahideen Bangladesh (HuJI-B) crossing over into India.
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The JMB remains the most potent out of these militant groups. The militant group was formed in 1998, but gained prominence after its proscription in 2005 by the then Khaleda Zia-led Bangladesh Nationalist Party (BNP) government. Notably, opposition leader and Awami League-chief Sheikh Hasina had forced the BNP government for imposition of the ban, due to the arms training and radicalization provided by the JMB to its members as well as the potential threat the group posed to Dhaka’s security. However, no concrete steps were taken to halt the operations of the JMB, culminating into 500 simultaneous bombings in 63 of the 64 districts of Bangladesh on August 17, 2005. Following the incident, a comprehensive crackdown against the top leadership of the JMB (Majlis-e-Shura) was launched resulting in the execution of several JMB big-wigs. In the aftermath of this crackdown, the JMB split into three basic factions as shown in the infographic above. The old guard of the JMB formed a core group, which today stands completely depleted due to the aforementioned executions. Another group, inspired by the Al-Qaeda aligned itself with the HuJI-B. The third faction, known as the JMB was formed as an amalgamation of breakaway members from the Old JMB, HuJI-B, ABT and Bangladeshi militants living abroad, popularly known as the Neo-JMB. This faction claimed responsibility for the attack on the Gulshan Cafe
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in Dhaka’s diplomatic zone. The Neo-JMB supposedly seeks inspiration from the Islamic State (IS), with the IS’ propaganda ‘Dabiq’ magazine even declaring its complicity in the July 2016 Gulshan attack. Indian intelligence agencies have indicated that JMB operatives have been successfully entering India through the Indo-Bangladesh border for several years. Further, a number of mosques and madrasas that have been constructed in towns along the border and have allegedly aided efforts of the JMB in recruiting, indoctrinating and training militants. A number of shocking revelations came to the fore following the Burdwan attack of 2014, which was perpetrated with the use of Improvised Explosive Devices (IED). Investigations revealed that the JMB has clandestinely formed cells in West Bengal, in the districts of Birbhum, Burdwan, Murshidabad and Nadia for facilitating its proposed operations in India. Similar bases were supposedly formed by the organization in neighboring state of Assam.
Districts in West Bengal which have a JMB presence Giving further credence to this argument was the confession of a captured JMB operative, who brought to light the presence of multiple leaders of the JMB at a Madrasa in Nalbari district of Assam to provide training and inspiration to Muslim youths with regards to the initiation of ‘Jihad’ against the Indian administration. These findings have raised questions in India pertaining to the degree of penetration achieved by groups such as JMB and HuJI-B. Furthermore, the developing Rohingya crisis and reported instances of militant activities by certain sections of the Myanmarese refugees as well as the support extended by international terrorist groups such as Al-Qaeda to the Rohingyas might lead to further complications for both Bangladesh and India in dealing with the Rohingya exodus.
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INDIAN ECONOMIC INVESTMENT IN BANGLADESH
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Volume of bilateral trade between Bangladesh and India has currently reached approximately 6.6 billion USD. However, according to sources there is a potential for this volume to quadruple. India is likely to extend its third credit line to Bangladesh (3.5 billion USD), with the announcement slated to be made during PM Sheikh Hasina’s visit to Delhi. Earlier, during PM Modi’s visit to Dhaka, India had provided credit worth 2 billion USD while earlier a 800 million USD loan package was given to Bangladesh. Dhaka will reportedly use the funds infused in the nuclear, petrochemical, infrastructure, railways sectors as well as in the development of Special Economic Zones (SEZ). Exports from Bangladesh have doubled, after India provided duty-free access to all but 25 tariff-lines in 2011. This was possible due to the South Asian Free Trade Area (SAFTA) agreement. Average exports from Bangladesh were at approximately 550 million USD, but remained stagnant after a sudden rise. Trade deficit reduced to 4.76 billion USD in Fiscal Year (FY) 2016 from 5.57 billion USD in FY 14 and 5.3 billion in FY 15. This might be related to the reduction in imports from India of Bangladeshi goods in the last three years.
Earlier, during PM Modi’s visit to Dhaka, India had provided credit worth 2 billion USD while earlier a 800 million USD loan package was given to Bangladesh. Dhaka will reportedly use the funds infused in the nuclear, petrochemical, infrastructure, railways sectors as well as in the development of Special Economic Zones (SEZ). The ‘Blue Economy’ slogan, forwarded by PM Modi has found resonance in Bangladesh and in the SAARC countries region. Areas of mutual cooperation likely to be stressed on include exploration in the petrochemical sector, specifically development of hydrocarbon deposits in the Bay of Bengal, evolution of fisheries and increasing connectivity through maritime routes. Multi-nodal transit provided by India to Bangladesh with the aim of bolstering maritime trade with the usage of waterways has acted to help both countries on the economic front. The Ashuganj River Port in Bangladesh is one such example. The BCIM corridor, a Chinese initiative might further the cause of connectivity and link the Yunnan Province in China to West Bengal. The project involves the construction of an expressway from Kumning in Yunnan to Kolkata. The expressway will pass through Mandalay in Myanmar and Chittagong and Dhaka in Bangladesh. The corridor is expected to provide greater market access for goods, services and energy as well as the elimination of Non-Tariff Barriers (NTB).
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THE BCIM CORRIDOR
The ‘Blue Economy’ slogan, forwarded by PM Modi has found resonance in Bangladesh and in the SAARC countries region. Areas of mutual cooperation likely to be stressed on include, exploration in the petrochemical sector, specifically development of hydrocarbon deposits in the Bay of Bengal, evolution of fisheries and increasing connectivity through maritime routes.
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POLITICAL OPPOSITION TO INDO-BANGLADESH RELATIONS While economic and defense agreements between Bangladesh and India have been developing over the last decade, certain issues pertaining to the planned umbrella defense agreement and certain development projects have led to diplomatic tensions and multiple protests in Bangladesh. While the defense deal with India will help Dhaka in expanding its purview with regards to procurement of arms and training for its defense forces, the deal has raised concerns in the country and has been pursued by the primary opposition party, the BNP. BNP’s founder, Ziaur Rahman was the architect of Sino-Bangladesh relations, thus the current opposition to the Indo-Bangladesh agreement might originate from supposed historically close relations between the Khaleda Zia-led political outfit and its proximity to China. Further, the execution and arrests of BNP leaders by the Sheikh Hasina government in the last two years, in connection to war crimes committed during the Liberation War of 1971, in which India played a decisive part, are likely to have been instrumental in the opposition displayed by the BNP to the engagement. That said, given that the BNP ranks have been considerably exhausted following a targeted campaign launched by Sheikh Hasina against the opposition party, the BNP lacks the leverage required to force the incumbent government’s hand. The Rampal Coal Powered Plant, a 1,320 megawatt project, has been a matter of contention for both countries. The plant’s location has been the biggest hurdle for the governments of Bangladesh and India, given that it is located at a world heritage site, the Sundarbans marshlands, home to a diverse ecological system and also to the indigenous Royal Bengal Tiger. UNESCO has also remained firm on its opposition to the plant and called upon the incumbent government to scrap the project on October 20, 2016. The power plant has been opposed by activist groups as well as the BNP citing that the Indian government has vested interests in constructing the plant and India would benefit more from the plant, rather than Bangladesh which is likely to suffer environmental and monetary losses in the short term. The recurring protests over the plant, few of which have been violent, have provided a perfect sample on how environmental activism plays a major role in blocking projects that are perceived to be beneficial for the overall development of the country. However, in the case of the Rampal Power Plant, the concerns of the environmentalists can be regarded as legitimate due to the supposed vast effects it is liable to have on the world heritage site. Moreover, unilateral steps taken by the Indian government with regards to goods such as the imposition of a dumping duty in 2016 on Bangladeshi jute products and chemicals such as Hydrogen Peroxide might act to deteriorate bilateral relations but should affect the semantics of various agreements between India and Bangladesh.
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Source: Bangladesh Poribesh Andolan, Government Pension Fund of Norway & National Committee for protection of oil, gas natural & other resources
The recurring protests over the plant, few of which have been violent, have provided a perfect sample on how environmental activism plays a major role in blocking projects that are perceived to be beneficial for the overall development of the country.
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FORECASTS ●
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The Indo-Bangladesh relationship is liable to progress in the coming days and years, specifically if the Sheikh Hasina administration manages a reelection and consolidates power at the centre. India on the diplomatic front has remained silent on allegations of human rights violations against the incumbent government with regards to execution opposition leaders and targeted arrests. Reciprocation in the form of support to India on the Kashmir issue and especially the Uri attack, with the Bangladeshi boycott of the South Asian Association for Regional Cooperation (SAARC) which was supposed to be held in Islamabad in November 2016 has strengthened the alliance. Bangladesh will reportedly extend its support to Delhi, if India-Pakistan have a military altercation in the future. This stand of the Bangladeshi government can also be traced back to the 1971 Liberation War and Pakistan’s wartime excesses in East Pakistan. China’s growing interests and investments in Bangladesh will remain a cause of concern for India as two other SAARC countries, namely Sri Lanka and Pakistan are already heavily dependent on Beijing’s economic aid. India is likely to counter these overtures by China by extending its own financial support to Dhaka. However, if Delhi can match the massive credit lines extended to Bangladesh by China remains a question to be answered. In the current scenario, India can only rely on warm relations between the two countries and diplomatic means (in the form of various agreements adhered to by the nations) at its disposal to garner the support of Dhaka on crucial issues. The status-quo on the Teesta Water-sharing agreement will primarily remain, as the agreement has been converted into a regional political issue in West Bengal by the AITC government led by Mamata Banerjee. Further, the centre-ruling Bharatiya Janata Party (BJP) is also looking to enlarge its political base in West Bengal and might shy away from taking a strong stance in favor of Bangladesh. That said, Mamata Banerjee has taken a more conciliatory viewpoint on the water sharing agreement, indicating that some headway will be achieved in the near future. In the case that West Bengal agrees to the water sharing agreement with Dhaka, other states in India that share the waters of Teesta are liable to follow suit and accept the centre’s proposal. The umbrella defence pact to be signed between Bangladesh and India has faced stiff opposition from certain sections of Bangladesh’s defense community and particularly from opposition parties such as the BNP. Keeping this in mind, Sheikh Hasina might be advised to not directly finalize the defence pact at this juncture. A Memorandum of Understanding (MoU) might be signed by the nations to further defense cooperation and to placate the scepticism emanating from Bangladesh. However, as earlier mentioned this might act to minimize Dhaka’s range with respect to procurement of defense equipment and training while also increasing its reliance on China for military aid. The Bangladeshi government might want to maintain a geopolitical balance between China and India while receiving dividends from both
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the countries to further its economic progress. The recurring infiltration across the international border has continued to trouble the Indian government and BSF, as border towns along the Indo-Bangladesh border have allegedly turned into safe havens for outfits such as the JMB and HuJI-B. While the Bangladesh government has displayed an iron-will in combating terrorism and internal militant elements, the shadow of radicalization and attacks from militant cells in Bangladesh and India remains potent. That said, after the effective crackdown on the JMB and its affiliated outfits, the militant groups originating in Bangladesh have faced a comprehensive depletion. Further, following the Burdwan attack, the Indian government has been cognizant of the looming threat of Bangladeshi militancy and the danger it poses to communal harmony in India, specifically the border states of Assam and West Bengal, where the Muslim population has been ever-increasing. The Indo-Bangladesh economic partnership is destined to grow at an outstanding rate if political stability persists in Dhaka. Several collaborative projects between the two countries are in the pipeline and a number of agreements have been signed aiming at economic development in Bangladesh. Connectivity has been an area of concentration for bilateral relations and construction and maintenance of roads and waterways have remained vital for the growing trade in South Asia. In this context, Indian investments in transportation, infrastructure and marine trade are liable to increase. While India might oppose the One Belt One Road initiative, proposed by China, it is likely to approve of the BCIM corridor due to the advantages it provides with regards to linking important trade hubs in neighboring countries. India’s only cause of worry with the One Belt One Road initiative seems to be its passage through disputed territories in Jammu and Kashmir. The political opposition to India’s growing economic interests should not act to impede further engagement, given that the opposition parties in Bangladesh are currently battled and bruised and face obliteration in the case the Sheikh Hasina government retains power in the 2019 general elections. Projects such as the Rampal Power Plant will give essential fodder required for projecting an anti-India front in Bangladesh and the Indian government might act to not involve itself in future projects which might be deemed a hindrance in furthering bilateral relations. Strong measures taken by the Modi administration with the levying of duties on dumping of jute projects and other commodities might increase the friction between the administrations in Delhi and Dhaka, however the immense benefits likely to be achieved through mutual cooperation are liable to supercede minor impediments.
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