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India-Bangladesh Relationship (Part - 1)

Updated: 6 days ago

In India's east is situated Bangalesh, our neighbor that shares a land border of 4096 km with us, touching its boundaries with the Indian states of Assam, Tripura, Mizoram, Meghalaya, and West Bengal. Bangladesh was part of India and only got separated from it in 1947. Hence both modern-day countries share common social, cultural, and historical relations, and also share riverine and maritime boundaries.

The modern-day Inda-Bangladesh relation started in 1971 when India helped Bangladesh (known as ‘East Pakistan’ priorly) to get freedom from Pakistan. India was the first country in the world to recognize it as an independent and sovereign nation. It’s an entry point for India’s northeastern states and provides land connectivity to Southeast Asian nations. This makes Bangladesh important for India's foreign policy. No wonder, since Bangladesh’s independence, the two countries have continued to consolidate their political, economic, trade, and cultural relations. 2021 marks the 50th year of Bangladesh’s independence and diplomatic relations of 2 countries. In March 2021, India conferred the Gandhi Peace Prize 2020 to Sheikh Mujibur Rahman, Father of the Nation of Bangladesh. India and Bangladesh today enjoy one of the best periods of their relationship under present governments, with positive development in the areas of diplomatic, political, economic, and security relations.

India-Bangladesh Relations

Trade and Economic relations:

Bangladesh is India’s biggest trade partner in South Asia. Bilateral trade between India and Bangladesh has grown steadily over the last decade. India’s exports to Bangladesh in FY 2018-19 stood at USD 9.21 bn and imports from Bangladesh during the same period were USD 1.04 bn. The same has risen to USD 12 billion and 2 billion respectively in FY23. India mainly exports Raw cotton, non-retail pure cotton yarn, and electricity to Bangladesh, whereas it imports pure vegetable oils, non-knit men’s suits, and textile waste. India is Bangladesh’s second largest market for imports after China. Both countries are currently negotiating the signing of the Comprehensive Economic Partnership Agreement (CEPA), enabling trade, investment, industrialization, and overall economic cooperation. Both countries have also agreed to settle trade transactions in Rupee to reduce dependence on US dollars.

Standing true to its neighborhood-first commitment, India is going to sign a Tripartite agreement with Bangladesh and Nepal. This would enable Bangladesh to import electricity from Nepal. However, amid growing trade links, the Indian investments in Bangladesh are still quite low. In the fiscal year of 2021-22, foreign direct investment to Bangladesh totaled USD 1.37 billion, with India accounting for only USD 15.7 million, or 1.15%. To promote cooperation on bilateral trade, both countries have created the India-Bangladesh CEO’s Forum to provide policy-level inputs in various areas of trade and investment and also to facilitate exchanges among the business communities of both countries.

India-Bangladesh Border Peace

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