By Business India Editorial

Given our relatively tension-free relationship, the Bangladesh Prime Minister Sheikh Hasina’s visit to India is expected to produce positive outcomes and a raft of agreements. Hasina had last visited India in 2017. Subsequently, Prime Minister Modi visited Bangladesh in 2021 for the 100th birth anniversary of Sheikh Mujibur Rahman, the founding father of the nation. There have been several two-way ministerial visits as well. Such visits and interactions have set India-Bangladesh ties on a firmer footing, and on course for closer engagement in trade, connectivity and people-to-people ties.

The positive trend in ties goes further back, to Hasina’s advent to power in 2009, her unilateral moves to shut down terror training camps, and hand over more than 20 wanted criminals and terror suspects to India. The centre piece of her latest visit will be the conclusion of the first water sharing agreement in 26 years, the launch of free trade agreement talks, and infrastructure projects, particularly in the railways sector.

Much of Hasina’s focus is also on attracting investment by Indian industry. The total amount of FDI inflow to Bangladesh was $1.37 billion in 2021-22, out of which India’s contribution was only $15.751 million, barely a little over 1 per cent. Given the proximity and the kind of relationship we share, Dhaka is hoping that this figure can be upped substantially.

It is pinning hopes on the dedicated Special Economic Zones for Indian companies, coming up at Mongla and Mirsarai, that will act as a magnet for Indian investments. She is wooing the Adani Group in particular, as her scheduled meeting with Gautam Adani on her first day in India indicates.

Over the last decade or so, the performance of the Bangladesh economy — which grew at a rate of over 6 per cent per annum — and its achievements in the field of human development has often been called a development miracle by several leading economists. Although the pandemic and the Ukraine war have had a negative impact on the country’s economy as the rate of growth slowed down and the country’s foreign exchange reserves dwindled, the outlook for Bangladesh — expected to graduate from the list of the UN’s Least Developed Countries (LDCs)in 2026 — still remains positive.

As the graduation will expose the economy to an entire gamut of new challenges — like loss of specific international support measures given to the LDCs such as preferential market access that will hit exports to European and North American markets — Hasina seems to be preparing in advance. Indian investment (in Bangladesh) can help Bangladesh to make up for the loss of economic opportunities.

Greater economic cooperation is also aimed at reducing the trade imbalance between the two countries. Though bilateral trade crossed $18 billion in 2021-22, it is heavily tilted in favour of India. This has been a pet peeve for the Bangladeshis. They think it can be addressed through a comprehensive economic partnership agreement (CEPA), discussions for which are likely to begin this year.