What does the trilateral Tripura meet mean for Bangladesh?
On 11-12 April, Bangladesh, Japan, and India will gather in Tripura to discuss connectivity projects that will help the region realise its commercial potential
The India-Bangladesh-Japan trilateral Tripura meet is being organised by the Northeast Indian think group Asian Confluence in association with the Indian Foreign Ministry.
According to the Economic Times, it will be attended by the chief minister of Tripura, the deputy foreign ministers of Bangladesh and India, as well as the Japanese envoy to India.
Japan is making investments in Bangladesh and Northeast India, especially in the Matarbari deep sea port that will link the area's landlocked region with the Bay of Bengal.
In a recent study by Asian Confluence, it was concluded that Northeast India and Bangladesh should increase their multimodal connectivity in order to boost the region's competitiveness and close development gaps.
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The report recommended that both organisations cooperate to facilitate trade and create express routes for the transhipment and transit of commodities from the Northeast Region to the Chattogram Port. These efforts should be undertaken concurrently.
The research also recommended the development of industrial value chains to benefit Japanese businesses operating in the region as well as other stakeholders in Bangladesh and India.
A Northeast India-Bangladesh-Japan CEO Forum and the Japan-Northeast India Chamber of Commerce were also recommended in order to foster Japanese investment in NE India and to provide the necessary corporate leadership.
Japan's participation in establishing an industrial value chain between Bangladesh and Northeast India and linking the Northeastern Region (NER) to the Bay of Bengal may have a significant impact on the region's geopolitical landscape.
Depending on the degree to which the three nations participate, the initiative has the potential to establish a thriving and long-lasting NER-Bangladesh economic corridor (let's name it NBEC), igniting a shared desire to draw in private capital by utilising natural advantages.
During a recent visit to Delhi, Japanese Prime Minister Kishida Fumio declared, "We will promote the Bay of Bengal-Northeast India industrial value chain concept in cooperation with India and Bangladesh to foster the growth of the entire region. We view Bangladesh and other areas to the south as a single economic zone."
The plan is an expansion of the conversation that took place at the Japan-India Summit in 2022 and is a part of the ongoing collaboration between India and Japan to create a "free and open Indo-Pacific (FOIP)".
The importance of collaborative initiatives in the Indo-Pacific region was reiterated by the Prime Ministers. They recognised the development of active initiatives in Bangladesh.
Besides, they further recognised the value of continuing their cooperation through the Act East Forum (AEF) for the long-term economic growth of India's North Eastern Region and for improving the Region's connectivity with Southeast Asia, according to a joint statement released in 2022.
The Economic corridor
The initiative is a win-win for both countries. India-Bangladesh commerce increased to nearly $16 billion in 2021 from less than $3.5 billion in 2010. More initiatives are being implemented, and trade logistics have improved.
But the development of the local value chain weakened. The three main causes of this failure were a lack of complementarity, historical weaknesses of the border economies of West Bengal and the Northeastern Region (NER) of India, and political-economic realities in Bangladesh.
The dramatic improvement in NER's infrastructure and investment readiness over the past ten years has brought in new opportunities, while West Bengal continues to be an economic backwater of India and is not showing much intent to capitalise on the opportunity.
In fast-growing Bangladesh, the opening of the Padma Bridge ensures simple connectivity between the northern and southern regions of the nation, removing two significant structural barriers to the development of a cross-border value chain.
A deep-sea harbour is being constructed by the country in far-east Asia at Matarbari in Cox's Bazar, Bangladesh. The project, which is in the Indian state of Tripura near to the Sabroom border, is anticipated to be finished in 2026.
Deep-sea ports are expensive. Access to NER could increase Matarbari's viability as there are numerous such sites in eastern India. Similarly to this, having complete port access will increase northeast India's appeal to international investors.
NER was given entry to Chattogram port by Bangladesh in 2018, but only for the transportation of goods to the rest of India. Only 80 kilometres separate the harbour, which is located near Matarbari in Tripura, and the Sabroom border.
The Japanese proposal is fantastic because Bangladesh and India are already constructing the required transportation infrastructure to connect Tripura and the NER to Chattogram port.
The project's Indian component, which includes a cutting-edge cargo and passenger terminal connected by both train and road at Sabroom, is nearly finished and scheduled to be completed in 2023.
Bangladesh is building related facilities, but at a slower rate. The limited access to Chattogram port barely justified the significant investments made in cross-country connectivity, given the dramatic increase in rail and highway connectivity between NER and the rest of India over the previous ten years.
That issue will be resolved by granting Matarbari complete port access.
Enormous chance
Over the past nine years, Northeast India has undergone a significant transformation. More transformation is coming. It is becoming a cost-competitive, modern economy as a result of significant investment in the infrastructure and energy industries.
Now, the area has affordable choices for moving goods both within and between regions. Guwahati became the centre for regional transportation, reducing the reliance of remote states like Tripura on Kolkata.
By June of this year, NER will have an energy surplus instead of a deficit because the 2000 MW Subansiri (Lower) project will begin to operate. It will serve as a hydroelectricity generation centre in the coming years.
By 2024, a plethora of possibilities will become available with the completion of the Paradip (Odisha)-Numaligarh (Assam) crude pipeline, the operationalisation of the nine million tonnes per annum (mtpa) Numaligarh Refinery (NRL), and the implementation of the vast Indradhanush Gas Grid connecting all NER states.
First, the neighbouring countries' imports of petro-products like cooking gas (LPG) and diesel will leave NER with a massive exportable surplus.
Second, refiners in isolated Northeast India will undoubtedly search for a nearby market. Over the next four to five years, the argument for the regional value chain will be stronger as a significant portion of the 15 mtpa refining capacity in NER will be converted into petrochemicals.
It should ideally open up investment possibilities in nearby downstream units. The newly opened India-Bangladesh diesel pipeline marked a significant milestone and will likely replace up to one-fifth of Dhaka's fuel import through the maritime route as well as satisfy all of northern Bangladesh's fuel needs.
Pipeline transportation will eliminate the typical 30-day delay between the Middle East and Bangladesh's consumption point, the accompanying capital block, and the risks connected with currency volatility.
Geostrategy and geoeconomics
The Act East Forum was founded by Japan and India in 2017. Since then, the two nations have been in communication to promote regional connectivity and NER development that is sustainable.
On possible connectivity initiatives between NER and Southeast Asia via Myanmar, discussions between Delhi and Tokyo have also taken place.
So, the successful implementation of trilateral cooperation will be crucial for all parties. The eventual winners will be the peace and security of the region, which has been the foundation of India-Japan ties for the past ten years.
Therefore, the partnership may prove to be a special chance for both Bangladesh and Northeast India to draw a portion of the shifted Japanese policy.
Anup Sinha is a researcher and freelance columnist specialising in South Asian Affairs with particular focus on the Rohingya issue, India-Bangladesh relations, water sharing etc. He has an MSS degree in International Relations from the University of Dhaka.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
