India and BRI | Interdependent Neighbours

For years, the Indian foreign policy experts viewed China through the lens of encirclement. The theory of ‘strings of pearls’ was propounded to explain People’s Liberation Army Navy’s (PLAN’s) forays into the Indian Ocean Region (IOR).  Here China cultivated a series of friendly ports all along the islands in the IOR to further enhance the endurance of its naval vessels. Indian experts argued that all this was aimed at encircling India and restricting the Indian Navy.
However, with the launch of the Belt and Road Initiative (BRI) in 2013, China has taken the ‘string of pearls’ theory to an entirely new level. It is no longer about encirclement of any one country, but creation of multiple modes of connectivity across the world — land, sea and digital — for greater cooperation. But can this cooperation be without conflict? This is the question that the world, including India, is grappling with.
This month onwards, FORCE starts a series in which it will look at India’s ties with the countries that have signed up for the BRI. This edition we start with Bangladesh.

Palak Gupta

India is wary of the growing Chinese influence in the region and is working to keep Bangladesh from falling into Beijing’s orbit. Foreign secretary Harsh Vardhan Shringla made his first official visit to Bangladesh from 2 to 3 March 2020. During the visit, the foreign secretary also met minister of road, transport and bridges Obaidul Quader and security affairs adviser to Prime Minister of Bangladesh Maj. Gen. Tarique Ahmed Siddique (retd).

Bangladesh PM Sheikh Hasina with PM Modi

In South Asia, Bangladesh is the second-largest recipient (after Pakistan) of Chinese loans under Beijing’s ambitious Belt and Road Initiative (BRI) which is also known as the New Silk Road. The project, estimated to cost an estimated USD4-8 trillion, aims to connect Asia with Africa and Europe via land and maritime networks along six corridors. Dhaka is also an important player among South Asian states which holds a great deal of significance for China on trade, military, strategic and diplomatic fronts.

Bangladesh’s strategic location in the Bay of Bengal, with a coastline of 580km, adds to its importance as both a trading and defence asset. Diplomatic relations between Bangladesh and China were established in 1976, five years after Dhaka’s independence.

 

Trade Ties

On 4 July 2019, touting her country’s ballooning economic prosperity, Bangladesh Prime Minister Sheikh Hasina invited Chinese businessmen to ‘explore full trade potentials with Bangladesh.’

Local reports quoted Hasina as saying, “The total volume of trade between our two countries was USD12.4 billion in the 2017-18 financial year. However, majority of this trade consisted of imports from China.” She added that China has already emerged as the largest trading partner of Bangladesh.

When Chinese President Xi Jinping visited Bangladesh in 2016, the two countries signed 27 agreements for investments and loans worth some USD24 billion. This was an addition to the already existent USD13.6 billion investments in joint ventures, crowning Beijing as the biggest single investing state in Bangladesh.

Indeed, China overtook India as Bangladesh’s primary trading partner in 2003. However, the trade deficit between India and Bangladesh stands at less than USD7 billion and the trade gap between China and Bangladesh is USD11 billion higher than India. In July 2019, at the two-day B2B trade summit held in Kolkata,  Sheikh Fazle Fahim, president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) stated that bilateral trade between Bangladesh and India was USD9.5 billion in FY2017-18 with exports to India pegged at USD0.87 billion and imports at USD8.6 billion.

In Making the Most of Bangladesh-India Trade, author Mustafizur Rahman, a distinguished fellow at Dhaka-based think tank Centre for Policy Dialogue notes that Bangladeshi traders often complain about non-tariff barriers (NTBs) when exporting to India. NTBs or Non-Tariff Measures (NTMs), as they are also known as, are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs. NTBs include quotas, embargoes, sanctions, and levies. Bangladesh roughly imports 80 per cent of goods from India through the land ports. India, which largely exports raw-materials to Bangladesh for its export-oriented sectors, has imposed anti-dumping and countervailing duties on Bangladeshi exports.

Both India and China have signed Asia-Pacific Trade Agreement (APTA) which was previously known as the Bangkok Agreement. Other members include Bangladesh, Republic of Korea, Lao PDR and Sri Lanka.

According to Dr Mohammad Tarikul Islam, associate professor in government and politics, Jahangirnagar University of Bangladesh, “Informal diplomacy is an important apparatus to encourage the formation of the mutual understanding of differing perceptions and needs based on strong problem-solving relationships. The relation between Bangladesh and India is a great example here.”




Underscoring the disputes between the two countries on water, transit and trade issues, the professor told FORCE that academics and professionals of Bangladesh want friendly relations with India based on a common culture, heritage and political systems.

Former Bangladesh high commissioner Tariq Karim, in one of his interviews to an Indian daily said, “Dhaka needs water and energy security and that even if most of the agreements are delivered, many in Bangladesh will only ask why Teesta has not been done?” Talking of energy security, Bangladesh has a huge pile of natural gas deposit.

 

Defence

China has emerged as a major supplier of arms to the Bangladeshi armed forces. The People’s Liberation Army (PLA) takes care of the post-selling technicalities like accessibility to spare parts and training facilities of the client state.

It can be concluded this is in line with the country’s Forces Goal 2030 which started in 2009 and is the modernisation programme of the Bangladesh Armed Forces. Under this initiative, Bangladesh aims to transform its navy into a three-dimensional force.

Sino-Bangladesh bilateral cooperation has traversed from the economic length and breadth to the strategic and a military one in contemporary times. Notably, China is the only country with which Bangladesh has signed a defence agreement. China also provides training to officers of the Bangladesh Army.

In 2016, Bangladesh purchased two used ‘Ming’ class conventionally powered submarines from China at a cost of about USD203 million. According to media reports, China would help Bangladesh build a base for its submarine fleet. Named Nobojatra and Joyjatra, the two submarines operate from a makeshift base at the moment.

Col Vinayak Bhat, who is a military intelligence veteran of the Indian Army and who has worked on China for four decades told FORCE, “The Chinese have also been studying under-sea information in Indian Ocean Region (IOR). Their survey activities have been stepped up in this area especially Bay of Bengal. Recent forays of Chinese hydrographical survey ships around Andaman and Nicobar Islands, South of Colombo and in Arabian Sea off India’s West Coast since last decade indicate a continuous oceanographic surveillance for smooth movement of submarines. Bangladesh already has more than 25 Chinese ships in its navy and is acquiring more. These are extremely worrying trends and India needs to take urgent steps to alleviate these danger drifts in the Bay of Bengal.”

China’s President Xi Jinping with Bangladesh’s Prime Minister Sheikh Hasina

Emerging as a major player in arms trade, China has exported some USD15.7 billion worth of conventional weapons across the globe between 2008 and 2018, making it the fifth largest arms supplier in the world — behind the United States, Russia, Germany, and France.

The dragon state has developed a huge military-industrial complex with its growing footprints in Central Asia, South East Asia and Africa, according to a March 2019 report by Swedish think-tank Stockholm International Peace Research Institute (SIPRI). China’s primary customers include Bangladesh, Myanmar, Middle East and Africa among others.

Dr Tarikul Islam shares with FORCE that Bangladesh Prime Minister Sheikh Hasina is now trying to capitalise on the geopolitical advantage that Dhaka enjoys as a country which overlooks the strategically important sea lanes of the Indian Ocean linking China with the Persian Gulf, which have a role in securing energy supplies for Beijing.

“Such an approach speaks of her vision to move ahead with an essentially ‘win-win’ situation, by leaving behind China’s hostile attitude during Bangladesh’s liberation war in 1971. Bangladesh–China–India–Myanmar Forum for Regional Cooperation (BCIM) is a sub-regional entity of Asian nations aiming for greater integration of trade and investment between the four countries,” he added.

The professor goes on to explain that the Bangladesh Prime Minister Sheikh Hasina has adopted a diplomatic outlook in line with the guiding principle of the country’s Constitution — ‘Friendship towards all, malice toward none.’ However, in trying to ensure this, Bangladesh’s dependence on China has increased.

According to him, to keep strengthening the relationship, these two nations need to agree to continue exchanging high-level visits and contacts, intensify friendly exchanges between government agencies, parliaments, political parties, armed forces, and non-governmental groups of the two countries; promote communication and cooperation at the local government level, and enhance the cooperation mechanisms.

In April 2019, the Bangladesh Navy received two Type C13B ‘corvettes’ from China. The two new warships, bearing pennant numbers F113 and F114, arrived at the Chittagong port on April 27, the Bangladesh ISPR had then said in a statement. Apart from this, the Bangladesh Army has been equipped with Chinese tanks, missile launchers and several weapons systems. Its air force flies Chinese fighter jets.

Bangladesh Prime Minister Hasina also visited India as recently as in October 2019 during which ‘both Prime Ministers welcomed the initiatives for development of closer maritime security partnership, and noted the progress made in finalisation of an Memorandam of Understanding (MoU) on Establishment of Coastal Surveillance Radar System in Bangladesh and encouraged both sides for early signing of the MoU.’

The two sides also agreed to expedite work towards drawing upon a USD500 million defence Line of Credit (LoC) extended by India to Bangladesh, for which implementation arrangements had been finalised in April 2019. India and Bangladesh, during Sheikh Hasina’s four-day visit to New Delhi in April 2017, signed MoU in areas of defence cooperation.

There are already mechanisms in place between the two countries to provide training and exchange of military experts; military courses and information; mutual cooperation on maintenance of military equipment.

As part of the ongoing Indo-Bangladesh defence cooperation, the ninth edition of the joint military training exercise SAMPRITI-IX was conducted at UMROI, Meghalaya, from 3-16 February 2020 to get familiar with each other’s organisational structure and tactical drills. The drill is hosted alternately by both countries and the eighth edition of the exercise was conducted at Tangail, Bangladesh.

Soldiers from both the armies held joint tactical operations like cordon and search, raid and house clearance drills during the 14-day long exercise.

 

Infrastructure Building

China has heavily invested in infrastructure projects in Bangladesh. These include the Chinese Economic and Industrial Zone, the 8th China Bangladesh Friendship Bridge, and the International Exhibition Centre. It is actively carrying out a number of developmental projects in Bangladesh particularly in power, communication, infrastructure development and telecommunication sectors. China is also aiding in modernisation of the prominent river ports of Bangladesh – the Chittagong port, Khulna port and Mongla port.

In September 2018, Prime Minister Narendra Modi, Bangladesh Prime Minister Sheikh Hasina, West Bengal Chief Minister Mamata Banerjee, and Tripura Chief Minister Biplab Kumar Deb jointly inaugurated three projects in Bangladesh through video conferencing. The first project was supply of 500 MW additional power supply from India to Bangladesh through Baharampur-Bheramara interconnection. The second project — construction work of the Bangladesh part of Akhaura-Agartala railway link and the third project is on the rehabilitation of Kulaura-Shahbazpur section of Bangladesh Railways.

Meanwhile, there are two trains running between India and Bangladesh – Maitree Express and Bandhan Express. The Maitree Express runs between the cities of Kolkata and Dhaka, while the Bandhan Express connects Kolkata to Khulna city in Bangladesh.

Bangladesh has received about USD600 million from China from July 2018 to June 2019, while New Delhi’s investment was only USD65 million during the same period, according to the latest data of Bangladesh Bank.

An enormous chunk of these investments flow into Dhaka’s power generation and mega infrastructure. Bangladesh has an ambitious target of producing 24,000 megawatts of power by 2022, an increase from 17,000 megawatts for which it massively is dependent on China.

The Padma Bridge, a major road-rail project across the Padma river, is being built by the China Major Bridge Engineering Company. And China’s Exim Bank is providing USD3 billion for the construction of the rail link accompanying the bridge.

While many analysts and observers of South Asia opine that this Chinese investment is a debt trap, it can not be overlooked that the Chinese investment invites stiff competition from India. In between the rivalry of two competing countries, Bangladesh benefits immensely. It is evident from this statement that Bangladesh’s GDP is growing faster than India.

 


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Interdependent Neighbours

For years, the Indian foreign policy experts viewed China through the lens of encirclement. The theory of ‘strings of pearls’ was propounded to explain People’s Liberation Army Navy’s (PLAN’s) forays into the Indian Ocean Region (IOR). Here China cultivated a series of friendly ports all along the islands in the IOR to further enhance the endurance of its naval vessels. Indian experts argued that all this was aimed at encircling India and restricting the Indian Navy.

However, with the launch of the Belt and Road Initiative (BRI) in 2013, China has taken the ‘string of pearls’ theory to an entirely new level. It is no longer about encirclement of any one country, but creation of multiple modes of connectivity across the world — land, sea and digital — for greater cooperation. But can this cooperation be without conflict? This is the question that the world, including India, is grappling with.

This month onwards, FORCE starts a series in which it will look at India’s ties with the countries that have signed up for the BRI. This edition we start with Bangladesh.


 

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