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Subir Bhaumik
Date of Publish: 2015-11-21


Transit for India sparks debate in Bangladesh

Sheikh Hasina's government is facing some flak for what many in Bangladesh to be poor deal for providing transit to India. When the Shipping secretaries of the two countries last week finalised a rate of 192 rupees per tonne for goods shipped to Tripura through the Chittagong port and Asuganj land port, many experts in Bangladesh immediately pointed out that this was far below the recommendations of a committee the Hasina government has set up in 2011.  That committee had recommended 580 Taka (just above 500 rupees on current exchange rate) per tonne for all goods  that would be moved from the Indian mainland to the northeastern states.  The current rate finalised also has an additional element -- a security surcharge of Rs 50 per tonne . This is to cover expenses for police escorts for the Indian goods in transit.

The most widely circulated Bengali daily " Prothom Alo" ran a front page analysis on the day after the agreement , saying the transit rate was 'appalling'. The analyst had three major issues with the rate . One, he found it much below the one recommended by the 2011 committee. Two, Bangladesh would not earn enough to cover the cost of upgrading infrastructure like dredging of the Meghna river or maintaining the roads which would now have to take much extra pressure of the Indian transit cargo traffic. Three, much of Bangladesh's earnings would be eaten away by 'administrative costs' like employing staff to seal the cargo in transit at the point of entry into Bangladesh so that the goods were not offloaded in the country .

Other experts I encountered at a seminar in Dhaka (13-14th November) organised by the Asiatic Society of Bangladesh were equally circumspect. They said Bangladesh has agreed to allow transit so that its earnings would help it considerably offload the adverse trade balance. If the earnings were not enough, the decision would not be worth taking, specially because the additional load of the Indian cargo traffic would lead to  wear and tear on Bangladesh's infrastructure. But all Bangladesh scholars at the seminar insisted Dhaka must further develop its relations with India's northeastern states.

Now India and Bangladesh has decided to seek assistance from multilateral agencies for river dredging and the transit rate fixed last week was said to be 'experimental' that would be reviewed after a while. So there is a chance that the rate may be revised after a while. But most Bangladesh economists and analysts do not believe that would be the case. They say Bangladesh does not have seasoned economic diplomats who can drive a hard bargain and the Hasina government is only too keen to keep Delhi in good humour for the strong political support it gets.  That is not a wild allegation -- there are those in the Hasina government who are happy at getting India to agree to a rate after the opposition BNP had alleged that India was getting transit for next to nothing after an Indian truck carrying goods from Calcutta to Agartala last week had paid a token one rupee as transit. Indian diplomats in Dhaka were quick to point out that this was because the truck was on a trial run and nobody in Delhi expected the transit for free.

Once the transit is regularised and most goods headed for the Northeast from the Indian mainland and vice versa start moving through Bangladesh, an early review of the rates and a reasonable hike may be in order. India will save between 30 to 35 percent of transport costs for goods send to Northeast if it goes through Bangladesh. Some analysts say the savings would be more . To institutionalise the process, India has to make sure Bangladesh gains enough so that Hasina can tell her voters she has opened a new source for the national economy that is as good as its garment exports or remittances by expatriate Bangladeshis. Only if that happens can Hasina put the Opposition on the defensive that their anti-Indian postures had so far deprived Bangladesh of a major source of revenue. With finance minister AMA Muhith desperate to meet revenue targets in his ambitious 2015-16 budget, the transit income should be sustantial enough for Hasina and the Awami League to hold up to the nation as a boon .  

The transit means India can now use Chittagong or any other port of Bangladesh to access the Northeast. That is a huge game changer for the landlocked region. But Hasina is already facing criticism from a section of Bangladesh business who argue that by allowing transit for Indian goods, Dhaka has closed down the opportunity for its own products to access the markets of Northeast Indian states. It is too early to assess whether that is true or not. But for a trusted ally like Hasina who has delivered on all that India wanted  -- from handover of insurgents who then joined the peace process to allowing use of Chittagong port to transit -- it is important that she can show her electorate some gains from her efforts to improve relations with India. It is time for those who crib over small patches of territory like the swap of the enclaves to realise that the gains of having a regime like Hasina's is crucial for both India and its Northeast. The least Hasina can expect to get for all she has done for India is a favourable transit rate and a deal on the Teesta waters.  

Subir Bhaumik

(Subir Bhaumik is a former BBC Correspondent and now works as Senior Editor of Dhaka-based bdnews24.com. His books on Northeast "Insurgent Crossfire" and "Troubled Periphery" are well acclaimed. His forthcoming book "Agartala Doctrine" is being published by Oxford University Press. )



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