Modi makes history in Bangladesh with land swap

Wednesday 10th June 2015 06:02 EDT

India and Bangladesh opened a new chapter in their relations as they settled the 41-year-old boundary dispute and promised to do more in other areas, amid Prime Minister Narendra Modi’s announcement of a fresh line of credit of $2 billion to the neighbouring country.

With West Bengal chief minister Mamata Banerjee standing by his side, Modi, on his maiden visit to Dhaka, also expressed confidence to have a “fair solution” to the Teesta and Feni river water sharing issues with Bangladesh “with the support of state governments in India”.

After extensive talks between Modi and Bangladesh Prime Minister Sheikh Hasina, the two sides signed 22 agreements, including on cooperation in maritime safety and to curb human trafficking and fake Indian currency.

Hasina, whose country is seen as a hiding ground for insurgents of north-east India, also promised “zero tolerance” against terrorism. She said the countries agreed to set up two special economic zones to bridge the growing trade deficit. Modi promised to do “everything” to address it.

He announced a fresh $2 billion line of credit for Bangladesh and promised quick implementation of the earlier line of credit of $800 million and full disbursement of $200 million.

The highlight of the Modi’s first day was the exchange of documents related to the Land Boundary Agreement (LBA), which paves the way for exchange of territories to settle the 41-year-old border dispute, which has been an irritant. Under the Agreement, 111 border enclaves will be transferred to Bangladesh in exchange for 51 that will become part of India. The agreement settles the question of citizenship for over 50,000 people.

“The visit is at a historic moment. We have resolved a question that has lingered since Independence. Our two nations have a settled boundary. It will make our borders more secure and people’s life there more stable,” Modi said at a joint press interaction with Hasina. Referring to the unanimous passage of the LBA by Parliament last month, he said it “reflects the consensus in India on relations with Bangladesh”. Noting that the two countries had accepted the settlement of the maritime boundary last year, he said, “it is evidence of the maturity of our ties and our shared commitment to international rules. So, we stand at a moment of huge opportunity in our relationship. Prime Minister (Hasina) and I recognise that.”

Of equal significance is an agreement that will allow Indian cargo vessels to use the Chittagong and Mongla ports in Bangladesh. This has immediate connectivity benefits - Indian ships at present have to travel all the way to Singapore to offload cargo onto vessels that bring them back to Bangladesh, typically taking 30-40 days. With this agreement, their travel time will come down to a week. This will be the first time India and Bangladesh will utilize their common seas.

Strategic implications are huge as well. Chittagong port has been developed by China and is part of its famed “string of pearls.” Ostensibly a commercial port, there has been a belief that China could use it for strategic purposes, particularly since China is also believed to be developing a deep sea port off the island of Sonadia at Cox's Bazar. For India to gain access to use the port is a big achievement both in economic terms, and also as an expression of greater trust with Bangladesh.

Modi announced a $2billion line of credit for Bangladesh to use for infrastructure, power, health and education projects. Making connectivity a big part of the agreements, Modi also announced “Power supply from India to Bangladesh will grow from 500 MW to 1,100 MW within two years.” Modi, Hasina and Mamata flagged off two bus services that would connect north-eastern states to Kolkata. Bangladesh would in turn be able to use Indian territory to access markets in Nepal and Bhutan.

Keeping the Teesta deal alive, Modi indicated a similar political process would be employed for that deal as well.“Our rivers should nurture our relationship, not become a source of discord. Water sharing is, above all, a human issue. It affects life and livelihood on both sides of the border. We have shown political resolve and mutual goodwill with the Land Boundary Agreement. I am confident that with the support of state governments in India, we can reach a fair solution on Teesta and Feni Rivers.”

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