How16 new routes to Chattogram and Mongla ports of Bangladesh can lift northeast’s economy

The National Board Revenue (NBR) of Bangladesh recently passed a permit allowing India access to the Chattogram and Mongla ports in Bangladesh for transit and transshipment of cargo.

This decision is a game-changer for landlocked North-Eastern states of India, whose close proximity to the ports will make movement of goods to and from it much faster and cheaper, potentially boosting economic activity in the region. It will also connect the rest of India through a shorter alternate route via Bangladesh.

 

The North-Eastern region of India- comprising 8 states- is connected with the rest of India through the Siliguri corridor, a narrow strip of land, commonly referred to as ‘The Chicken’s Neck’.

While blessed with an abundance of natural resources, this region has historically lagged behind economically due to a number of factors, the most significant one being its geographical isolation from the rest of the country and poor connectivity and infrastructural development. Strategically, the region is of great importance due to its geographical position and territorial, cultural and ethnic links to neighbouring Bangladesh and South East Asian countries. The overhang of China, which has eyed the Siliguri corridor, adds to the region’s strategic importance, reinforcing the need for alternate routes that can by-pass the “chicken’s neck”.

The importance of the latest move is further amplified as the permit is opening up 16 routes- spanning the landlocked states of Assam, Meghalaya and Tripura- for transit. Under the new system, cargo can be transported from Chattogram and Mongla ports to Agartala (Tripura) via Akhaura, Dawki (Meghalaya) via Tamabil, Sutarkandi (Assam) via Sheola and Srimantapur (West Bengal) via Bibirbazar. This development is also significant because it was followed shortly by Bangladesh’s announcement of its Indo-Pacific outlook, which makes way for far greater opportunities for cooperation between India and Bangladesh.

The Chattogram Port is situated in the south-east of Bangladesh near the Karnaphuli river. It is the most lucrative port for Bangladesh, as 90% of its import-export traffic goes through it. The Mongla port is located near the Bay of Bengal coastline and is the second largest port in Bangladesh.

Access to these ports allows the north-east to be connected to the rest of the country through a shorter and alternative route, bypassing the Siliguri Corridor. For example, while earlier the distance between Kolkata and Agartala through the Siliguri Corridor was about 1600 km, the distance from Kolkata to the Chattogram port by sea would be around 650 km and about 250km from the port to Agartala via Akhaura. A rail link has also been proposed between Agartala in Tripura and Akhaura in Bangladesh and the construction of the Maitree Setu over the Feni river that connects Sabroom, also in Tripura to the Chattogram port will open the north-eastern states to not only national, but also global markets. Bangladesh has a lucrative market for its products in West Bengal and the North-Eastern states and keeping that in mind, India has also offered concessions to Bangladesh under the South Asian Free Trade Agreement (SAFTA) to facilitate bilateral trade between the two countries.

This official grant of access  to the Bangladeshi ports has come five years after  New Delhi and Dhaka signed an ‘Agreement on the use of Chattogram and Mongla Ports for Movement of Goods to and from India’ in 2018. The Standard Operating Procedure was finalized in 2019 during Sheikh Hasina’s India visit. However, the Covid-19 pandemic and the global shutdown that ensued had delayed the implementation of the agreement indefinitely. Since 2020, however, both countries have been conducting trial runs to test the transshipment of goods through these ports. The first trial run took place in 2020 from Haldia port in West Bengal to Chattogram Port and then to Tripura.

This was followed by the second trial run in 2022, this time from the Mongla port to Tripura through Bibirbazar in Bangladesh. The trial runs were met with a lot of enthusiasm from both sides of the border- especially in Tripura, which, thanks to the permit, would act as the gateway to the North-East. Tripura, which has historically shared a porous border, spanning over 800 km, with Bangladesh, is integral to India-Bangladesh relations.

 

Comments made by The Union Minister of state for Social Justice and Empowerment Pratima Bhoumik- the first person from Tripura to be a union minister- after the successful second trial, emphasized the shared connection between Tripura and Bangladesh- “it’s a fact that we are separated by borders but the social and cultural bond that the people of Tripura and Bangladesh shared for many decades has proved that we are one. Religion, caste, creed etc, can’t separate us from each other.” In a later post on social media, she also hailed this move as heralding the emergence of Tripura as the hub of trade and commerce in the North-East.

Under its Act East Policy, India has been attempting to gain a foothold in the South East Asian nations, which is also important for India’s aspirations in the Indo-Pacific region. North-East India therefore is crucial for outreach to South East Asia, and the development of the north-eastern states, facilitated through enhanced connectivity is of utmost importance to India. The access to the Chattogram and Mongla ports in this context is of crucial importance for enhancing trade and connectivity in the region.

It would also build on the solid partnership between the Indian and Bangladeshi governments that in recent times has gone from strength to strength and help further the cause of regional connectivity that both the countries have championed along with its Himalayan neighbours Nepal and Bhutan through the BBIN initiative. In fact, in the past, there have been talks of allowing landlocked Bhutan and Nepal access to the Chattogram and Mongla ports, which would act as the gateway to the Bay of Bengal.

Furthermore, Bangladesh has in the recent past been plagued by energy shortage concerns, which has affected its readymade garment sector-arguably one of the biggest contributors to Bangladesh’s GDP- and the north-eastern states of India have huge oil, coal and natural gas reserves. Therefore, with greater connectivity, energy trade between Bangladesh and the North-Eastern states could flourish.

Also Read: How India and Bangladesh are set to transform regional connectivity, bolster Act East policy