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India-Bangladesh Relations
Issues, Problems and Recent Developments
97 Piyali Dutta
SEPTEMBER 2010
www.ipcs.org
ABOUT THE AUTHOR
Piyali Dutta was a Research Intern at the Institute of Peace and Conflict Studies. .
Indias Look East Policy: A Critical Assessment, Interview with Amb. Rajiv Sikri
Address: Anna Louise Strachan, Tuli Sinha and Harnit Kaur Kang, Special Report #85, October
B 7/3 Lower Ground Floor 2009
Safdarjung Enclave
New Delhi 110029 Suicide Terrorism in Pakistan: An Assessment
INDIA Jeremie Lanche, Special Report #84, September 2009
Tel: 91-11-4100 1900, 4165 2556, 4165 2557, How Prepared Are We? India and the Challenge of Nuclear Terror
4165 2558, 4165 2559 Sitakanta Mishra, Special Report #82, September 2009
Fax: (91-11) 4165 2560 From Bomb to the Base Camp: Global Nuclear Disarmament and the Ensuing Debate,
Email: officemail@ipcs.org Interview with Dr. Scott Sagan
Web: www.ipcs.org Rekha Chakravarthi and Yogesh Joshi, Special Report #81, August 2009
INDIA-BANGLADESH RELATIONS
ISSUES, PROBLEMS AND RECENT DEVELOPMENTS
PIYALI DUTTA
Impositionofstatetax
Antidumping(AD)isoneoftheWTO Another kind of informal trade, termed
legitimate measures introduced by technical smuggling, involves explicit
Indiaduringthe1990s, illegal practices such as under invoicing,
Countervailingduties misclassification and bribery of Customs
and other officials. During the 1990s
90% of industrial tariffs are now at about three quarters of imports were by
12.5%, far lower and far more uniform landandseawhichhasrecentlyshowna
then they have ever been in the past 50 decline to between 50% and 60%. The
years.4 From the perspective of SAARC cause of concern for Bangladesh, thus, is
countries, including Bangladesh, these more intense than that of India, since
changes mean that Indian domestic much larger volumes of goods are
markets, for most manufactured goods, smuggled from India to Bangladesh
are highly competitive, with prices that escaping customs duties. Trade deficit is
areclosetoworldprices,andarelikelyto intertwined with other issues like trans
be difficult to penetrate even with shipment, transit and export of natural
complete exemption from Indian tariffs gas,oneofthenaturalresourcepossessed
under bilateral or multilateral free trade bytheindependentnationofBangladesh.
arrangements such as those planned InarecentvisittoIndia,Mr.H.E.TariqA.
underSAFTA. Karim,BangladeshHighCommissionerto
IndiaattheInstituteofPeaceandConflict
IllegalandInformalTrade Studies, New Delhi noted that if India
Informal trade carried out through weretofacilitateBangladeshsexportsto
porous land border between India and India by completely removing all tariff
Bangladesh adds to the trade deficit, and nontariff barriers, then the loss in
dating back to the initial years of revenues to India from duties and levies
Bangladeshs birth. The substantial, would be insignificant while in return,
informal and unrecorded trade, carried hugegoodwillwillbecreated5whichis
across the IndiaBangladesh border, is actually essential for a progressive
more quasi legal in nature, and is often relationshipbetweentwodemocracies.
describedasinformalratherthanillegal,
since there is wide participation of local II
peopleintheborderareaswhooperatein TRANSIT
liaison with the antismuggling
enforcement agencies. Informal trade of Transit was used by India with Pakistan
thiskindofteninvolveslarge numbersof till the 1965 war, after which it declined,
local people individually transporting but with the consequent emergence of
smallquantitiesasheadloadsorthrough Bangladesh, it failed to change.
bicyclerickshaws,alsoknownasbootleg Immediately after Bangladeshi
smuggling. independence,itallowedtransitinairand
sea routes to India while the major issue
http://horizonspeaks.wordpress.com/2010/02/02/ of transit through road remained
on-india-bangladesh-trade-imbalances unattended.
4
Executive Summary Report, Studies on India-
Bangladesh Trade, Trade Policies and Potential
FTA,
http://www.worldbank.org.bd/WBSITE/EXTER
5
NAL/COUNTRIES/SOUTHASIAEXT/BANGL Seminar Report, #313, 17 February
ADESHEXTN/0,,contentMDK:20610536~menu 2010, India-Bangladesh Relations,
PK:295780~pagePK:64027988~piPK:64027986 http://www.ipcs.org/seminar/bangladesh/indiaba
~theSitePK:295760,00.html ngladesh-relations-829.html
2
India-Bangladesh Relations: An Update
While air transit is still widely used than India, New Delhi is left with the only
water transit, it has been considered option of urging the reopening of the
uncompetitive over the years. The goods northeastern routes through Bangladesh
carried from the Northeast of India toitsWest,andwithMyanmarandsouth
reaches the mainland after traversing East Asia to the East. The region that is
Assam and North Bengal, taking a route also rich in energy resources like natural
much longer than what could have been gas and hydroelectricity can progress,
theshortestthroughBangladesh.Inspite thusaddressingproblemsthatgiveriseto
ofIndiasfrequentattemptstopursuethe long standing grievances, which in turn
Bangladesh government to open transit encourage insurgency surrounding the
foritseconomicactivities,evenatthecost region.
of a hefty sum, it has been continuously
refused on grounds that it is a possible The benefits of transit facility between
threattonationalsecurity. India and Bangladesh are not limited to
theIndiangrowthlist.Bangladesh,whose
TransshipmentversusTransit average GDP is 6% per year, can also
Transshipment refers to the shipment of becomearegionalhub.
goods or containers to an intermediate
destination, and then to yet another RoleoftheAsianDevelopmentBank
destination. This has been achieved by ADB (Asian Development Bank) Country
India in its relationship with Bangladesh. DirectorHuaDu,pointedoutinaseminar
Transit refers to the passage of Indian to Bangladesh, You can benefit
good across Bangladeshi borders to and tremendously through opening up of
from the North Eastern states of Indian transit and great opportunities for
owned surface transport, while crossingfromeasttowestandgivingthe
transshipmentmayalsorefertothesame landlocked neighbours access to the
movement using Bangladeshowned sea.6
transport. This remains an issue of
contention. The controversial issue of connecting
Bangladesh to the Asian Highway is
Bangladesh, on the 31 May, 2010 signed sustained by the anti Indian groups in
an agreement to finalize a transshipment Bangladesh. The Asian highway, also
deal with India to allow Indian goods to known as the Great Asian Highway, is a
betransportedtothenortheasterncityof cooperative project among countries in
Tripura in the state of Assam through Asia and Europe and the United Nations
Bangladeshiterritory.Anythingproduced EconomicandSocialCommissionforAsia
in the northeast region of India faces the and the Pacific [ESCAP], to improve the
difficulty of marketing to the rest of the highway systems in Asia. AntiIndia
country, the main reason being the groups in Bangladesh for the opposition
distance to the port of Kolkata. With of the Asian highway scheme feel that:
globalization and the policy of
liberalization no foreign or private Transit facility once given is difficult
companyis goingtobeinclinedtoinvest totakeback.
inthenortheastcornerofIndiaowingto
several hassles, including the rise in
transportation cost. Thus hampering the 6
Salah Uddin Shoaib Choudhury, Transit,
developmentofthenortheasternmarket. Asian Highway and other issues on table for
Bangladeshi Government, American Chronicle,
To deal with such logistical problems of September 24, 2009,
linking the Northeast with the rest of http://www.americanchronicle.com/articles/view
/118555
IPCS Special Report 97, September 2010
4
India-Bangladesh Relations: An Update
The 30 year water sharing treaty interpretation says that this treaty is
envisaged that the water of the Ganges successfulinsettlingthedisputeoverthe
River would be distributed from Farakka sharing of water, but contrary views on
for the two countries between 1 January the part of India and Bangladesh have
and 31 May of each year, and that India been extended over this treaty that also
was required to maintain the flow of hastheprovisionofbeingreviewedatthe
Farakka at the average level of the end of five years, or even at the end of
previous 40 years including any critical twoyears,ifsowished.
period when Bangladesh would continue
toreceive35000cusecofflow.Thistreaty TheBangladeshiviewsuggests:
essentiallyregardedtheleanseasonflows There was unilateral diversion of
related to actual flows at various levels Ganga water by India at Farakka
not exceeding 75% dependable flows, as prior to the 30 year water sharing
in past agreements. The basic formula of treaty.
equal sharing during the lean season
flowshadtwomodificationsattheupper
and lower extremes. Governmental
7
http://www.defence.pk/forums/bangladesh-defence/59471-india-going-ahead-tipai-dam-2.html
Thiswas a caseof alarge and more share and realize that water is an
powerful country disregarding the intangible asset that does not recognize
needs and interests of a small and political boundariesthere should be an
weaker neighbor, resulting in emphasis on water conservation and
reduction in flows that had serious optimumwatermanagement.9
adverse effects on Bangladesh. This
view further ascribes to the big TeestaRiverDispute
brotherly attitude of India over her The Teesta River enters Bangladesh near
neighbours.8 Nilphamari district and courses 45
Critics also emphasized kilometersthroughthepredominantrice
environmental hazards such as growingdistrictsofRangpur,Lalmonirhat
raised salinity levels, contaminated and Gaibandha before meeting the
fisheries, hindered navigation and a Brahmaputra River in Kunigram. The
threat to the water quality and Teesta River floodplain that includes the
quantity. Silt levels were believed to extreme northwest region of the country
have an adverse effect on the accounts for 14% of the total cropped
HooghlyRiverandtheKolkataPort. area in 2001. Around 63% of the total
cropped area in the region is irrigated
TheIndianviewsuggests: laying down a direct link between
That the water allocated to irrigational water availability and
Bangladesh leaves India with less agricultural use. The floodplain which is
waternecessaryforthefunctioningof presently considered a dry zone depends
the Kolkata port and the National on the Trans Boundary River flows
Thermal Power Corporation at betweenIndiaandBangladesh.
Farakka.
Bangladesh has taken an Sheikh Hasina in her three day visit to
unnecessarily rigid and unreasonable Indiaon10January2010exchangeddraft
stand on this issue. Greatly agreements on the Teesta water sharing
overstating its water needs, issue with India, after a twoday
Bangladeshclaimsadisproportionate ministeriallevelmeetingoftheJointRiver
shareofwater. Commission was held. While Bangladesh
presented a draft on an interim
Bangladesh High Commissioner to India agreement, India presented a draft of a
Mr. H.E. Tariq A. Karim, during his Statement of Principles on the sharing of
address at the Institute of Peace and river water during the dry season. The
Conflict Studies in New Delhi, regarding immediate achievement of this meeting
water sharing between India and was the decision that, within a year, an
Bangladesh commented that agreement over the Teesta River water
Transparency in these matters is very sharingwouldbesigned.Itwouldprovide
importantIndia and Bangladesh must key support to agricultural production in
notquibbleaboutcusecsorpercentageof the northwest region of Bangladesh. One
question that remained unanswered
regardedtheamountofriverwaterlikely
8
Executive Summary Report, 2005, Studies on to be shared between the countries.
India-Bangladesh Trade, Trade Policies and
Potential FTA,
9
http://www.worldbank.org.bd/WBSITE/EXTER Seminar Report, #313, 17 February
NAL/COUNTRIES/SOUTHASIAEXT/BANGL 2010, India-Bangladesh Relations,
ADESHEXTN/0,,contentMDK:20610536~menu http://www.ipcs.org/seminar/bangladesh/indiaba
PK:295780~pagePK:64027988~piPK:64027986 ngladesh-relations-829.html
~theSitePK:295760,00.html
India-Bangladesh Relations: An Update
settle the above dispute Bangladesh In the Northeastern states like Nagaland,
proposedsendingajointIndoBangladesh the population of Bangladeshi, mostly
teamtodeterminetheflowofchannelsof Muslim immigrants, have more than
the river on the basis of existing tripled in the past decade, from 20,000
International Law of the Sea. But the Bangladeshiimmigrantsin1991,tomore
Indian counterpart sent forces to than75,000asof2001.
establish claims by stationing naval
troops on the island in 1981. After initial DrugTrafficking
resentment by Bangladesh, India agreed Bangladeshisincreasinglybeingusedasa
toresolvetheissuethroughnegotiations. transitpointbydrugdealersandthedrug
Till now the sovereignty over the island mafia, which dispatches heroin and
nation remains undecided, and recent opium from Burma, and other countries
reports of the press and media suggests of the golden triangle, to different
that Bangladesh views India with destinations. As a result, Bangladeshs
suspicion in its activities over the Department of Narcotics Control has
disputed piece of landmass on the breast comeunderthescannerseveraltimesand
ofaninternationalwater. invited criticism. Bangladesh has become
the prime transit route for trafficking
heroin to Europe from Southeast Asia,
V according to a report from the
SECURITYCONCERNS International Narcotics Control Board
(INCB)2007annualreport10.
Illegalimmigrationisaperennialproblem
in almost all nations. Problems of INCB notes that the most common
immigration considered illegal have even methodsandroutesforsmugglingheroin
led to the outbreaks of xenophobic into Bangladesh are by courier from
violence in certain places. India has Pakistan, commercial vehicles and trains
completedaround1357kilometerfencing fromIndia,andviaseathroughtheBayof
of the international border with plans to Bengal or overland by truck or public
cover another 2429 kilometer of border transportfromBurma.
in the second phase and also plans to
illuminate around 300 kilometer of AntiTerrorCooperation
international border to prevent illegal TheMinistryofDefence,India,expressed
migration. Cooperative measures like its interest in seeking Bangladeshs firm
joint patrolling of the border areas, cooperation in fighting antiIndia terror
consular access to prisons and signing of and insurgent outfits operating from its
an extradition treaty are on the verge of soil.Thearmiesofbothcountrieshave,in
materializing as steps to increase vigil to the past, proved their might by fighting
check drug and arms trafficking, as well the ULFA cadres, by, for example, the
as illegal immigration, especially the handingoverofArabindaRajkowatothe
trafficking women and children. The IndianSecurityagencies.
Centre for Women and Children Studies
based in Bangladesh estimated in 1998
that27,000Bangladeshishadbeenforced
into prostitution in India. Illegal
10
Bangladeshi migrants enter Indian Bangladesh used as Heroin Trafficking
Territory to settle in rural areas like routes, March 07, 2008, Narinjara News, Burma
News International,
Nandigram in West Bengal, as share
http://www.bnionline.net/news/narinjara/3719-
croppers. bangladesh-used-as-heroin-
traffickingroutes.html.
8
India-Bangladesh Relations: An Update
10