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India and Bangladesh decide to launch talks on trade pact this year

Prime Minister Narendra Modi and his Bangladeshi counterpart Sheikh Hasina signed several MoUs. ptiPremium
Prime Minister Narendra Modi and his Bangladeshi counterpart Sheikh Hasina signed several MoUs. pti

  • Modi and Hasina directed officials from ‘the concerned ministries to commence negotiations on a bilateral comprehensive economic partnership agreement (CEPA) this year in 2022 and complete it in time for Bangladesh’s final graduation from the LDC status’

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NEW DELHI : India and Bangladesh on Tuesday decided to launch talks on a planned trade pact this year as the two sides signed seven memorandums of understanding on the second day of Prime Minister Sheikh Hasina’s visit to India.

Prime Ministers Narendra Modi and Hasina directed officials from “the concerned ministries to commence negotiations on a bilateral comprehensive economic partnership agreement (CEPA) this year in 2022 and complete it in time for Bangladesh’s final graduation from the LDC status," said foreign secretary Vinay Mohan Kwatra.

The CEPA, essentially a free trade pact, will look to build on the existing strengths in bilateral trade, valued at $18 billion dollars in the last financial year, said Kwatra, The announcement follows a recent joint study that sought to examine the feasibility of a bilateral trade pact. Bangladesh is India’s largest trade partner in South Asia with major exports from India including cotton, cereals, fuel, vehicle parts and machinery and mechanical appliances.

The MoUs covered a sweeping range of issues, with the agreement on Kushiyara water sharing marking a significant breakthrough. “This would be the first bilateral water sharing arrangement between our two countries since the Ganges Water Treaty in 1996", said Kwatra.

Speaking at a separate event, Hasina thanked Modi for his support in resolving once-stalemated negotiations. However, she also pointed to the work yet to be done on water sharing and hoped that “all outstanding issues including the Teesta water sharing treaty would be concluded at an early date."

The other agreements were in the fields of railways, media, capacity building and science and technology. Security and defence cooperation was another key feature of negotiations. Both leaders “underscored the importance of continuing close security cooperation in the fields of counter-terrorism, border management and addressing cross-border crimes".

Asked about the status of the $500 million Line of Credit (LoC) that India had extended to Bangladesh for military purchases, Kwatra revealed that a modest sum from that LoC had been utilized.

However, he believed it was an encouraging sign that could pave the way for expanded defence cooperation between the two countries.

The two sides also made strides in establishing cooperation on energy security and connectivity. On the latter, Kwatra said the two leaders sought to further expand road, rail, inland waterways and coastal connectivity. Kwatra pointed specifically to multi-modal freight through Chattogram and Mongla ports in Bangladesh to India’s Northeast as an encouraging sign.

MoUs in railways included training Bangladesh’s railway employees in India and deploying Indian IT and computerization services for Bangladesh Railway. Increased cross-border connections were also seen as key to both sides achieving their energy security needs.

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