New deal to link South Asian nations in pipeline

India, Nepal, Bhutan and Bangladesh working on a deal to boost regional trade and cultural exchange

A file photo of Prime Minister Narendra Modi. Photo: Reuters
A file photo of Prime Minister Narendra Modi. Photo: Reuters

New Delhi: With Pakistan scuttling an ambitious multilateral agreement to link South Asian nations via road and rail networks, India, Nepal, Bhutan and Bangladesh have come together to stitch together a similar deal to boost regional trade and cultural exchange among themselves.

“A meeting was held in New Delhi last week to work out the modalities. We hope to finalise it soon,” an official in the ministry of external affairs said on condition of anonymity.

The South Asian Association for Regional Cooperation, or Saarc, groups Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. Trade among Saarc countries rose 12.36% to $20 billion in 2013-14.

At the 18th Saarc summit held in Kathmandu in November, Pakistan refused to sign the Motor Vehicles Agreement and the Regional Railways Agreement, citing lack of “internal preparations”. India is keen on this multimodal connectivity plan, which will give it unhindered access to Afghanistan and central Asian countries. But Pakistan’s consent is necessary for connecting Afghanistan.

The proposal has now been revived as India looks to improve ties with its eastern neighbours in order to develop its insurgency-riven and economically backward North-East region.

At the Kathmandu summit, Prime Minister Narendra Modi had said: “Our relations become stronger when we connect the lives of the ordinary citizens of our countries. That is why connectivity and services by rail and road are so important.”

Ram Upendra Das, a professor at Research and Information System for Developing Countries (RIS), a Delhi-based think tank, said he sees it as a building block towards greater South Asian economic integration. “I hope one day Pakistan will be part of it so that the vision of seamless connectivity between Kabul to Dhaka will be true.”

The Saarc Regional Multimodal Transport Study, conducted by the Saarc secretariat in 2005, had recommended multilateral agreements permitting free movement of people, goods and services within the region by road and rail, later endorsed by member countries.

A Saarc summit in 2010 endorsed the idea to open up road transport. The summit declared 2010-20 as the decade of intra-regional connectivity in Saarc and agreed to step up negotiations aimed at finalizing deals on motor vehicles and railways.

Strengthened rail and road connectivity will not only provide stimulus to economic development in the region as a whole, but also encourage social and cultural contact and promote tourism among member-states. The rail agreement will enable low-cost, energy-efficient and environmentally sustainable transportation in the region and provide trade and economic links for land-locked countries and semi-isolated regions. The road agreement will lay down the protocol for vehicular traffic movement between Saarc countries for better people-to-people connectivity and cargo movement.

The agreement is also supposed to promote Afghanistan, Pakistan, India, Bangladesh and Myanmar (APIBM) transport corridors through a proposed Asian Highway, Trans-Asian Railway and land and sea-routes, which will connect South Asia with South East Asian countries, China, Central Asia and West Asia.

While the multimodal connectivity agreement seeks to open up transport activity across borders in the South Asian region, the Asian Development Bank (ADB) is providing financial assistance to build road and rail networks in the region under the South Asia Subregional Economic Cooperation (SASEC) programme.

SASEC is an initiative to promote economic cooperation between Bangladesh, Bhutan, India and Nepal. In 1996, these four South Asian neighbours formed the South Asian Growth Quadrangle (SAGQ) with the primary objective of accelerating sustainable economic development among them.

Under the programme, ADB and the Indian government would provide around $300 million and $58 million respectively, to complete the projects in about five years.

The initiative envisages road links for Panitanki-Fulbari on the Nepal-India-Bangladesh corridor, Jaigaon-Changrabandha on the Bhutan-India-Bangladesh corridor, Imphal-Moreh on the India-Myanmar border, and a bridge across Mechi river along the India-Nepal border. These projects involve construction of 245km of roads. ADB financing for state road projects which are to be converted into national highways in Manipur for connectivity with Myanmar and ASEAN (Association of Southeast Asian Nations) countries is also being explored for three road stretches.

More From Livemint