Development Cooperation between India and Bangladesh IAS Target

Development Cooperation between India and Bangladesh

23 Aug 2020

Category : International Relations

Topic: Development Cooperation between India and Bangladesh

Development Cooperation b/w India and Bangladesh

  • Bangladesh is the biggest development partner of India today. India has extended 3 Lines of Credits to Bangladesh in the last 8 years amounting to US$ 8 billion.
  • India had declared Line of Credit (LOC) for Bangladesh covering projects in railways, roads, public transportation, bridges and inland waterways, etc. Most of these projects have been accomplished and the remaining is at various stages of implementation.
  • India has also extended LOC for projects in areas of roads, power, shipping, railways, SEZs, health & medical care, and technical education. India extended LOC cover projects in areas of port construction, roads, airports, telecommunications, railways, and shipping, etc.

The Dollar Credit Line Agreement, for implementation of Line of Credit, was signed on 4 October 2017. In addition, to LOC funds, the Government of India (GoI) has also been providing grant support to Bangladesh for various socio-economic and infrastructure projects including the Agartala- Akhaura rail link, India-Bangladesh Friendship, and Pipeline dredging of inland waterways. Various small development projects in the areas of health, culture, education, urban development, water, disaster management, and community welfare, etc are also being executed.

India-Bangladesh: Power Energy Sector Cooperation

Cooperation in the power sector has become one of the hallmarks of India-Bangladesh relations. Bangladesh is presently importing 1160 MW of power from India. The 1320 MW coal-fired Maitree thermal power plant, a 50:50 JV b/w National Thermal Power Corporation (NTPC) of India & Bangladesh Power Development Board (BPDB), is being constructed at Rampal. Other agreements for supply/generation/financing of more than 3600 MW electricity were signed between Bangladeshi and Indian public /private companies. Import of bulk Liquefied Petroleum Gas (LPG) from Bangladesh Energy sector cooperation between India and Bangladesh has also seen significant progress in the last 2 years. Different Indian public sector units such as Indian Oil Corporation, Numaligarh Refinery Limited are working with their Bangladeshi counterparts in the oil & gas sector of Bangladesh. ONGC Videsh Limited has acquired two shallow-water blocks in consortium with Oil India Ltd and is presently exploring these blocks.

Connectivity project b/w India and Bangladesh

Improvements in connectivity are a significant prerequisite for trade, investments, and people-to-people ties. This has been the main area of focus for India and Bangladesh. To promote connectivity, various initiatives have been taken in the last few years. The overland movement of goods b/w India and Bangladesh is operationalized through various functional Land Customs Stations (LCSs) and Integrated Check Posts (ICPs) along the border at Petrapole and Agartala.

Petrapole Integrated Check Post

  • It will also be the biggest land port in South Asia.
  • The Prime Minister, Shri Narendra Modi, and the Prime Minister of Bangladesh, Sheikh Hasina recently jointly inaugurated the Petrapole Integrated Check Post.
  • Petrapole ICP will be the second ICP on the India-Bangladesh border after the Agartala ICP at the Agartala (India)-Akhaura (Bangladesh) land border.
  • The Petrapole ICP will provide better facilities for efficient and effective discharge of functions such as customs, security, immigration, quarantine, etc. while also providing support facilities for smooth cross-border movement of persons, goods, and transport.


  • Petrapole-Benapole is an important land border crossing for India-Bangladesh trade.
  • More than 50% of the India-Bangladesh trade passes through Petrapole.

India and Bangladesh have a Protocol on Inland Waterways Trade and Transit (PIWTT), to facilitate trade and transit between the countries, since 1972. PIWTT permits the movement of goods over barges/vessels through the river systems of Bangladesh on eight specific routes between points in India and Bangladesh, and between points in India through Bangladesh. The use of the Chattogram and Mongla ports in Bangladesh for the movement of goods to and from India, particularly from Northeastern India.

The PIWTT also enables for transshipment of goods to India’s North- the Eastern States through the Ashuganj River Port (and from there to Akhuara-Agartala by road) in Bangladesh. Coastal Shipping Agreement signed in June 2015 has also allowed direct sea movement of containerized/bulk/dry cargo between the two countries. Both the countries signed an agreement in October 2018 on the use of Chittagong and Mongla Ports for the transshipment of goods to and from India. The MoU (Memorandum of understanding) on the movement of passenger and cruise vessels on the waterways and coastal routes between the two countries is anticipated to be operationalized soon to facilitate tourism between the two countries.

There are currently four inter-country bus services in operation.

These are:
  • Dhaka-Kolkata
  • Shillong-Dhaka;
  • Agartala-Kolkata via Dhaka
  • Kolkata-Khulna.

Training and Capacity-Building support by India

A number of training courses are being conducted for Bangladesh officials. Bangladesh is an important ITEC partner country, and around 800 participants from Bangladesh get training courses under the ITEC programme annually. Furthermore, 200 scholarships are awarded by ICCR (Indian Council for Cultural Relations) every year to students from Bangladesh for pursuing courses in drama, culture, music, fine arts, and sports, etc.

Cultural Exchanges b/w South-Asian neighbours

The Indira Gandhi Cultural Centre (IGCC) in Dhaka often organizes cultural programmes and also conducts classes in various Indian cultural elements like Hindi, Hindustani music, yoga, Manipuri and Kathak dances, etc. These courses are very admired by Bangladeshi students. IGCC Hindi teacher also teaches Hindi at the Institute of Modern Languages at the University of Dhaka. The ICCR has initiated a Tagore Chair at the University of Dhaka since 2011. MoUs were signed to establish Hindi and Urdu language chairs in Dhaka University.

Consular Services

The Indian High Commission in Dhaka and the Assistant High Commissions in Bangladesh simultaneously issue the highest number of Indian visas compared to any other Indian Mission. The numbers are increasing manifold with figures exceeding 14 lakhs in 2018.

People-to-people contacts and Indian Diaspora in Bangladesh

About 10,000 strong Indian communities are expected to be living in Bangladesh. Most of the Indians are engaged in the Ready-Made Garment (RMG) sector or as top professionals in MNCs. Around 3000 Indian students are also pursuing medical courses in different Universities/colleges in Bangladesh. Consensus on lifting restrictions on entry and exit from land ports in India for Bangladeshi citizens travelling on valid documents.

Recalibrating a New India-Bangladesh bonhomie

Today Bangladesh is considered the fastest-growing economies in the world, even the GDP growth of Pakistan and India is low than that of Bangladesh. After seeing this rapid economic growth and strategic maritime location on the Bay of Bengal, it can be anticipated that Bangladesh is no longer the nation which former U.S. Secretary of state Henry Kissinger dismissed as a “basket case”. Bangladesh is one of the biggest export destinations for India. Dhaka is still a historic strategic partner that could play a significant role besides India in countering the presence of china in the Indian Ocean. For now, China is also a top exporter of defence tools to Bangladesh. The BRI project of china has also fueled Chinese investment in Bangladeshi infrastructure growth. After the visit of Xi Jinping in 2016, Bangladesh has seen an extra boost in Chinese investment and loan offers as well. But this rapid interest of china in Bangladesh has also generated rising unease. There is no strong bond b/w china and Bangladesh, like India and Bangladesh relationship. Additionally, the debt-trap tactics of china in Sri Lanka underline the threat of moving close to Beijing.

Despite New Delhi's recent tactics/diplomacy disregard for its smaller neighbour, it is doubtful that Bangladesh will overtly break with India. This decades-old alignment with India won’t be warned by china’s recent moves in Bangladesh. The Modi government should carefully consider how its own domestic policies i.e, NRC and CAA act to drive a nail in the Bangladesh-India relationship. It is a relationship that can’t be broken by Beijing, China. It must raise alarm in New Delhi that after the June 2020 border conflict b/w India and china, all the neighbours of South Asia, (India) including Bangladesh didn’t condemn china and remained silent. The road ahead in India – Bangladesh relations will remain chaotic. The invalidation of official state visits by various Bangladeshi officials to India, the reluctance of Bangladeshi Prime Minister to meet India’s High Commissioner to Bangladesh, and Pakistani PM Imran Khan infrequent phone calls to Bangladesh’s PM Hasina, highlights the disputes faced by New Delhi to restructure bridges with Bangladesh. Although, if these bridges are reconstructed, Bangladesh can play a significant role in helping shape India’s tactical environment.