"Padosi pehle, lekin Bangladesh sabse pehle (Neighbours first, but Bangladesh foremost)," External Affairs Minister Sushma Swaraj was reported to have said at an event during her 2017 visit to the country, describing bilateral relations as having gone beyond a strategic partnership. And as Bangladesh readies to vote on December 30 in a parliamentary election in which Prime Minister Sheikh Hasina is seeking a third straight term in office, India cannot take its eyes off its eastern neighbour with which it has shared what a former Indian foreign secretary called "an exceptional relationship".
In the last 10 years, Bangladesh has emerged as India’s closest geostrategic and geo-economic partner in South Asia. This is not just because of the excellent working relationship the two governments have shared over the years; it is a sphere where the country's bilateral, sub-regional and regional cooperation policies have cohered, yielding "good results" on both sides. In its election manifesto, the ruling Awami League has said cooperation with India will continue in all sectors, including security.
Sunday’s election is keenly watched because Sheikh Hasina is seen as a key player in maintaining peace and boosting development. She is fighting the election promising to put the country on a “highway to development.” But unlike 2014, there is an element of uncertainty about the outcome as it is a bipolar contest this time and the presence of some 23 million youth who will vote for the first time. Reports, however, say that she would sail through as her core support base of about 40 per cent voters is intact.
Ties with Bangladesh can be expected to get energised in the coming years with Sheikh Hasina’s likely return to power, that would bolster political stability in the country. The absence of the ‘India factor’ in Bangladesh politics, especially in the run-up to this election, signifies the support among people for stronger ties with India. Her decade-long rule, although criticized as authoritarian by human rights groups and others, has enabled the country to log in 6-7 per cent consistent economic growth, reaching 7.86 per cent last year. The per capita income has risen almost three times since 2009, reaching $1,750 this year.
Once called a basket case, Bangladesh, with its economic growth is now projected to enter the list of middle-income countries by 2024. Earlier this month, Hasina said Bangladesh's rapid economic expansion would pick up to hit 10 per cent over the next three years. “Bangladesh will be a middle income country in 2021, the year when the golden jubilee of our country will be celebrated. The per capita income of the people of Bangladesh will be over $5,479,” she said, releasing her party manifesto.
Bangladesh is a pioneer in financial inclusion and tops South Asia in gender equality. It has left India behind in the human development index, with higher life expectancy and lower infant mortality rates.
It has the most liberal investment policy in South Asia, allowing FDI in most sectors and simplifying conditions for doing business. It protects foreign investment, allows generous tax holidays, concessionary duty on import of machinery, remittances of royalty, 100 per cent foreign equity, unrestricted exit policy, full repatriation of dividend and capital on exit and other benefits. In a recent interview with Nikkei Asia, Hasina said Bangladesh could become Asia's fastest growing economy through a range of policies. She referred to the country's network of 100 special economic zones, 11 of which are now functioning while 79 more are under construction.
Her economic policies related to energy and infrastructure and technology offer greater scope for relations with India to grow. After the election, Bangladesh will invite bids for a 2,400 MW nuclear power plant, its second. India and Russia are building the country's first nuclear plant in Rooppur. She has pledged 100 per cent access to electricity by the middle of next year. The country is also planning to step up imports of liquefied natural gas to meet growing demands for energy. After a cross-country power grid, Bangladesh and India have joined through a cross-country oil pipeline to carry diesel from Siliguri in West Bengal to Parbatipur in Dinajpur district of North Bangladesh. India has also plans to double power supply this year.
Bangladesh also has an ambitious infrastructure programme and plans to digitise its financial and educational sectors. It wants to use Artificial Intelligence, Internet of Things, Big Data, blockchain and robotics.
Bangladesh has emerged as India’s largest trade partner in South Asia. Two-way trade has increased by 31.5 per cent to $9.3 billion.
Over the past four years, the government of Prime Minister Narendra Modi has worked to build and strengthen the relationship as Bangladesh has emerged as an important player in India’s Act East policy. Except the Teesta water-sharing, it has sorted out most issues, including the land boundary and maritime boundary agreements, and initiated first-ever defence deals. Passenger train and bus services have been expanded and the visa regime has been eased to people-to-people contacts significantly. India has issued a record number of 14.4 lakh visas in 2018.
India and Bangladesh have signed an agreement to use Chattogram (Chittagong) and Mongla Ports in Bangladesh for movement of goods to and from India. Both countries have also decided to initiate river cruise services between Kolkata- Dhaka- Guwahati- Jorhat.
All these and the ongoing intelligence sharing between the two sides to combat terrorism and beat insurgency in India’s Northeast have created a positive ambience for taking ties to a newer height.
India regards Hasina as a key player to maintain peace and boost development in the region. “We are successful fellow travellers on the road to development,” Modi had said and the two prime ministers have had 10 meetings and inaugurated jointly 19 development projects.
India’s development assistance to Bangladesh has gone up to US$ 8 billion from $3 billion in 2015. At their last meeting during the August BIMSTEC Summit in Kathmandu, both agreed to work together for the development of the two countries. Taken together the outlook appears bright and promises to open up possibilities for developing a new paradigm for relations in South Asia.
(The author is a veteran journalist and analyst. He can be contacted at email@example.com)