Dhaka, Delhi explore each other's port use for trade with third countries 

Infographic: TBS

Bangladesh and India want to use each other's ports for trade with third countries, and as part of the plan, a delegation left Dhaka on Saturday to visit such facilities in the neighbouring country and engage with relevant authorities.

Bangladesh, currently exporting goods via ports in Singapore, Sri Lanka, and Malaysia, eyes ports in its bordering states of India, while India aims to use Chattogram Port for its trade with third countries.

The 16-member team will visit seaports in Tamil Nadu's Chennai, Andhra Pradesh's Visakhapatnam and Krishnapatnam, and West Bengal's Haldia, according to an order from the shipping ministry in Dhaka.

The shipping ministry order seen by The Business Standard mentions that the delegation, headed by SM Mostafa Kamal, a joint secretary at the shipping ministry, states that a port in Kolkata is also scheduled for the visit.

The delegation includes representatives from the ministries of shipping, commerce, foreign affairs, and several trade bodies, who will stay in India from 6-12 July to visit various ports and engage in discussions with stakeholders.

Currently, Bangladesh exports goods to third countries via ports located in Singapore, Sri Lanka, and Malaysia.

India has transhipment agreements enabling the use of Bangladesh's road, rail, sea, and seaports, and also provides free transit for Bangladesh to export goods to Nepal and Bhutan.

According to sources from the shipping ministry, India plans to either export goods to third countries or facilitate the import of goods from third countries through Bangladesh's Chattogram port. Specifically, India aims to utilise the Bay Terminal currently under construction at Chattogram Port by Bangladesh.

Sources indicated that the Bangladeshi delegation departed to assess the feasibility following high-level approval from both countries. This initiative was agreed upon during shipping secretary-level talks between Dhaka and New Delhi in December 2023.

Senior Shipping Secretary SM Mostafa Kamal told TBS that India intends to export goods to third countries using Chattogram port, while Bangladesh is also considering exporting to third countries using Indian ports.

He mentioned that two committees are involved in this matter – one related to seaports and another to inland seaports – with a joint committee overseeing decisions and reporting. Any decisions will be discussed during future secretary-level meetings if deemed permissible under the law or constitution.

Kamal highlighted that the current bilateral visit involves Bangladesh visiting India first, followed by an Indian delegation visiting Bangladesh, with each topic being bilateral.

He emphasised that Bangladesh expects reciprocal benefits from India, mirroring what Bangladesh offers.

The shipping secretary said India will propose sending a delegation to Bangladesh through the foreign ministry once the Bangladeshi delegation returns. The Bangladesh Inland Water Transport Authority (BIWTA) will coordinate, and visit dates will be mutually convenient.

Regarding financial benefits, he assured that Bangladesh will receive advantages including port charges, value-added tax, and taxes, ensuring no losses.

However, he noted that the programme may not start immediately, stressing the need to plan the use of the Bay terminal to avoid underutilization.

He clarified that when referring to Chattogram port, it pertains to future use involving the Bay terminal, expected to be operational by 2027 for mutual economic benefits without favouring one country over the other.

During Prime Minister Sheikh Hasina's visit to India in September 2022, Indian businessmen proposed to their Bangladeshi counterparts the idea of exporting to third countries using Indian ports.

The "Bay Terminal" project was initiated a decade ago for the expansion of Chattogram Port. The process of awarding 501 acres of land for this project at a nominal price was finalised last May. On 28 June, the World Bank's Board approved a loan of $650 million for the construction of breakwaters and the excavation of shipping lanes.

Due to the approval of this new loan by the multilateral lender, the issue of speeding up the development of the Bay Terminal project has resurfaced.

The Bay Terminal project area, larger than the existing terminal area of Chattogram Port, will extend from the back seat of the Chattogram Export Processing Zone at the end of the port waters to Rasmanighat near Zahur Ahmed Chowdhury Stadium and will primarily handle the loading and unloading of containers and goods from ships.