India and Bangladesh Sign 22 Agreements, Discuss Water Sharing

Narendra Modi offered $5 billion in two separate lines of credit to Sheikh Hasina, including $500 million for defence procurement meant to wean Bangladesh off Chinese military purchases.

New Delhi: While Prime Minister Narendra Modi said that ‘only’ his and Bangladesh Prime Minister Sheikh Hasina’s governments that could resolve the intractable Teesta water-sharing issue, he offered $5 billion in two separate lines of credit the visiting prime minister. The two leaders also took implicit pot-shots at Pakistan for ‘victimising’ both countries with a ‘terror mentality’.

After being received by Modi at the airport in a special gesture on Friday, Hasina met her host again at Hyderabad House in Delhi on Saturday morning, where they had one-and-half hours of talks.

Twenty-two agreements were signed in the area of defence, nuclear energy, cyber security and media, though the two leaders witnessed the signing of only four pacts – on the judicial sector, a $4.5 billion development assistance line of credit, on outer space and on passenger and cruise services. In addition, India has offered a new $500 million line of credit specifically for defence purchases.

The two leaders on Saturday released the Hindi translation of the unfinished autobiography of Sheikh Mujibur Rahman and also named a road after Bangladesh’s founding father in the middle of Lutyens Delhi. Modi announced that both countries will jointly produce a biopic on Sheikh Mujib, which will be released in 2020 on his birth centenary. West Bengal chief minister Mamata Banerjee then joined the two prime ministers to launch three new transport links from West Bengal to Bangladesh.

Later, Indian foreign secretary S. Jaishankar pointed out that the visit was a reflection that both countries shared “an exceptional relationship”. “The word that we have used in the joint statement is ‘fraternal friendship’,” he asserted.


Modi raised the Teesta issue himself in his statement to the media – with India aware that this issue was of utmost interest to the audience in Bangladesh.

“Along with our shared land boundaries are our shared rivers. They sustain our people and their livelihood. The one that has attracted greatest attention is Teesta. This is important for India, Bangladesh and India-Bangladesh relations,” he said.

The Indian prime minster pointedly noted that Banerjee was also present on the occasion. “I am very happy that the chief minister of West Bengal is my honoured guest today. I know that her feelings for Bangladesh are as warm as my own,” he said. Banerjee’s opposition to the draft Teesta pact has been the reason why there has been no agreement, ever since she famously made a U-turn on the eve of Prime Minister Manmohan Singh’s visit to Dhaka in September 2011.

“I assure you and the people of Bangladesh of our commitment and continued efforts. I firmly believe that it is only my government and excellency, Sheikh Hasina, your government, that can and will find an early solution to Teesta water sharing,” he said.

In her statement, the Bangladesh prime minister added that not only the Teesta, but the Ganges barrage project was also discussed in the formal talks.

“We discussed the issues of water resources management including sharing of water of common rivers, including Teesta, the Padma-Ganga barrage project and basin management of common rivers. I sincerely believe that we will be able to get India’s support to resolve these issues expeditiously,” she said.

On Saturday evening, Banerjee called on Hasina at Rashtrapati Bhawan, where she apparently informed the prime minister that her government has “problems” with the Teesta pact due to scarcity of water in west Bengal. She proposed an alternate agreement in which four to five rivers in north Bengal, including Torsha, which could be diverted to meet Bangladesh’s water needs.

In the run-up to the visit, both Indian and Bangladeshi officials had admitted that any progress on Teesta water sharing was not possible during this summit. Then, Dhaka had tentatively floated the possibility of some positive language on the Ganga barrage project. This was dismissed by the Indian side, who pointed out that the Ganga barrage project faced the same obstacle as the Teesta – the involvement of West Bengal government.

However, the joint statement did have some solace for Bangladesh, with a joint technical sub group on Ganges barrage project established as well a study commissioned on riverine border in the upstream area of the project. “Both leaders directed the concerned officials of the ‘Joint Technical Sub Group’ to meet soon and hoped that the matter would be further taken forward through continued engagement of both sides,” it said.

Prime Minister Narendra Modi with his Bangladeshi counterpart Sheikh Hasina watch as external affairs minister Sushama Swaraj exchanges documents of MoUs between India and Bangladesh at Hyderabad house in New Delhi on Saturday. Credit: PTI/Vijay Verma

Prime Minister Narendra Modi with his Bangladeshi counterpart Sheikh Hasina watch as external affairs minister Sushama Swaraj exchanges documents of MoUs between India and Bangladesh at Hyderabad house in New Delhi on Saturday. Credit: PTI/Vijay Verma

Third line of credit

With the new $4.5 billion offer, India has thrice extended lines of credit during bilateral visit of Bangladesh prime ministers in the last six years, which have been the biggest soft loans that New Delhi has proposed to any foreign country during that period.

When Hasina visited India in 2010, a $1-billion line of credit was the largest that India had every offered – and also the Bangladesh had got from a foreign country, till then. A part of that, $200 million, was then converted into a grant, which Bangladesh will largely utilise for the Padma bridge construction.

As per Export-Import (Exim) Bank statistics, out of the $862 million line of credit which was signed in August 2010, around $325.94 million has been disbursed till now.

India then extended $3-billion soft loan during Modi’s first ever visit to Dhaka in June 2015. According to Indian officials, the Exim Bank has given the green light on the projects suggested by the Bangladesh government under the second line of credit, but funds are yet to be disbursed as no contracts have been signed.

India’s third offer for $4.5 billion comes after Xi Jinping’s visit to Bangladesh in October 2016, when the Chinese president extended a line of credit of $24 billion.

A recent report by Centre for Policy Research’s Indian Development Cooperation Research on India’s aid for Bangladesh noted that heightened Chinese interest should mean that kinks in the implementation of Indian development aid be ironed out fast.

Referring to Bangladesh media reports, the paper pointed out that projects implemented under the 2010 line of credit were “plagued by problems including cumbersome tendering process, escalation of material costs and lack of adequate competitive bidders in the Indian market”.

“Moreover, such an active Chinese interest necessitates India to push forward its own model of development cooperation, express its weight as Bangladesh’s support structure at global level and importantly, to filter out some of the problems highlighted above with respect to disbursal of LOCs and implementation of Indian LOC financed projects in Bangladesh,” said the report.

In February, Kaustuv Chakrabarti, a programme officer with the NGO Participatory Research in Asia, travelled to Dhaka and Ashuganj to assess the impact of four of the projects that have been completed under the first line of credit.

Around 290 double-decker and 50 articulated buses have been deployed to ease Dhaka’s congested traffic, while 88 air-conditioned buses are on inter-city links. “From my discussion with BRTC officials, these buses are very hardy, easy to maintain and spares not expensive,” Chakrabarti told The Wire. He cited this example on how India may have done better than China. “Buses were brought from China too… but most of them were scrapped as they were constantly breaking down,” he said.

Therefore, the similar context between India and Bangladesh should be a big advantage for Indian development aid. However, Chakrabarti does feel that India could do better in ‘branding’ its ‘assistance’. “We can do better in telling to the citizens of Bangladesh that this service has been provided with support from India,” he said.

Under the third line of credit, Jaishankar said that the both countries have already identified 17 projects to utilise the $4.5 billion, with the intention of “faster delivery”. These projects include upgradation of the ports of Payra, Chittagong and Mongla, making more roads four lane, airport upgradation and increasing railway lines.

Building a defence relationship

China’s presence is more dominant in another sector, where India offered a completely new soft loan on Saturday. Around 80% of Bangladesh’s military equipment is brought from China, including strategic purchases like submarines.

In fact, India has been steadily trying to work with the Bangladesh military to ensure that it doesn’t automatically see New Delhi as the prime threat. Till a few years ago, war games fought by Bangladesh defence personnel usually had an opponent which had an uncanny similarity to India. The military institutions set up after Bangladesh got independence were established by Pakistan-trained officers, which influenced their structure.

The Indian army chief had himself asked his counterpart in 2012 to modify these table-top war games to not make the enemy synonymous with India.

However, it is much more difficult to wean Bangladesh off Chinese defence equipment. According to the Stockholm International Peace Research Institute, around 17% of Chinese arms exports in 2015 and 2016 went to Bangladesh.

Therefore, while Bangladesh has been sending an increasing number of military personnel to India for training, Dhaka still looks towards Beijing for technical training to use Chinese defence platforms.

The new line of credit, which allows Bangladesh to buy around $500 million worth of Indian defence equipment, has been planned to chip away at this dependence on China.

In toto, four defence-related agreements were signed, which include a defence framework pact and two MoUs between defence colleges.

To appeal to sentiment, India also stressed the need for a defence relationship through the prism of the 1971 war of independence. This was explicitly underlined in the joint statement: “The two leaders agreed to foster mutually beneficial and deeper defence cooperation, taking into account the illustrious history of cooperation which began with both forces’ joint operation during Bangladesh’s Great Liberation War in December 1971”.

After their lunch at Hyderabad House, Hasina and Modi took a ride to Delhi’s cantonment area, where the Bangladesh prime minister honoured the next of kin of seven Indian soldiers who died in the 1971 war. She also met a retired Indian army officer, who had rescued Sheikh Mujib’s family from the Pakistani army in December 1971 as a young major.

The Indian prime minister also announced three new schemes for ‘muktijoddhas’ – an additional 10,000 scholarship slots for children of freedom fighters, five year multiple-entry visas and medical treatment in India for 100 Bangladeshi veterans of independence struggle.

Talking about terrorism

With Hasina on his side, Modi again took aim at Pakistan for fomenting terrorism in the neighbourhood at the event to commemorate Indian contribution to Bangladesh’s fight for independence. “There is a mentality in South Asia opposed to the approach of India and Bangladesh to promote development. This mentality nurtures and inspires terrorism,” he said.

Describing India and Bangladesh as ‘victims’ of this mentality, he said that this mindset regards “terrorism as higher than humanism, destruction greater than development and annihilation better than creation”.

Modi noted that the India’s doors “were always open”, but that this “mentality” of supporting terrorism had to be “abandoned”.

The Indian prime minister had also talked about Pakistan during his 2015 visit, where he had explicitly named the South Asian country. “Pakistan constantly disturbs us and has created a nuisance,” he said in a speech at Bangabandhu Convention Centre in Dhaka. Pakistan had then seized on his remarks to claim that it proved that India was behind the splitting up of Pakistan and creation of Bangladesh.

Meanwhile, Modi publicly expressed his admiration for Hasina’s “zero-tolerance” policy for terrorism.

Decrying the international community for double standards, the joint statement said that that the “fight against terrorism should not only seek to disrupt and eliminate terrorists, terror organizations and networks, but should also identify, hold accountable and take strong measures against States and entities which encourage, support and finance terrorism, provide sanctuary to terrorists and terror groups, and falsely extol their virtues”.

“They shared the view that there should be no glorification of terrorists as martyrs,” it said, adding that the Comprehensive Convention on International Terrorism should be finalised at an early date.

The two premiers “expressed their determination to take concrete measures to further step up cooperation and coordination among law enforcement, intelligence and security organizations of both countries”.

“They reiterated their commitment to ensure that their respective territories would not be allowed to be used for any activities inimical to the other,” it added.

Bangladesh is crucial for India’s security strategy in the northeast. Meanwhile, Dhaka is also facing the threat of transnational terror groups, with both al-Qaeda and ISIS having trying to create a presence.

Power and connectivity

Along with transport connectivity, India and Bangladesh are also bound through power and fuel links. Bangladesh already draws 600 megawatt from the Indian grid, with another 500 megawatt to added through the Bheramara-Bahrampur inter-connection. The two countries have agreed on a power evacuation scheme between Assam and Bihar, from which Bangladesh can draw 1000 MW power supply through tapping points at Parbatipur. Discussions have also begun for additional supply of 340 megawatt from NTPC stations.

One of the transport links that the two premiers remotely launched was the delivery of a diesel consignment, which is the harbinger of a much closer relationship on fuel supply.

India his already constructing a Indo-Bangla friendship pipeline from Siliguri to Parbatipur for supply of high speed diesel as a grant-in-aid. Indian Oil Corporation and Bangladesh Petroleum Corporation are also constructing a LPG terminal and pipeline.

Three MoUs were signed in nuclear energy on Saturday, which included an inter-government cooperation in peaceful uses of civil nuclear energy. Russia is constructing Bangladesh’s first nuclear power plant at Rooppur, for which India has been training Bangladeshi nuclear scientists for the last two years.

Opposition in Bangladesh

Meanwhile, the principal opposition party in Bangladesh have criticised the Hasina government for signing the defence agreements and failing to get any resolution on Teesta water-sharing and bridging the trade deficit.

The Bangladesh prime minister had earlier noted the formal discussions did cover concerns about the trade deficit of over $6 billion, which is in favour of India, imposition of duties on jute and electricity trade from Nepal and Bhutan.

According to the Indian high commissioner to Bangladesh, Harsh Vardhan Shringla, a positive way to bridge the trade deficit would be to increase investments, which can be done by improving the business climate and connectivity, and reducing non-tariff barriers. On April 10, around 12 investment deals amounting to $9 billion will be inked.

He also pointed out that India has liberalised and streamlined the visa application procedure for Bangladeshis, which had been a source for perennial complaint. “As a result, the perception of India in Bangladesh is much better,” noted Shringla.

He pointed out that India earns considerable revenue from the arrival of Bangladeshis, as they spend liberally on medical treatment and shopping.

On a specific question on whether India raised the attacks on minorities, Jaishankar noted that it was not a new issue and has been raised at previous occasions. “Our is assessment is that this government is a progressive, liberal, secular government… They are trying”.

Note: In an earlier version of this article, it was incorrectly stated that Prime Minister Manmohan Singh’s visit to Dhaka was in January 2010 instead of September 2011.