Coastal shipping: New era in Indo-Bangla connectivity

Bangladesh and India are set to witness a new era of connectivity, particularly on road and coastal shipping, as various agreements on this  were signed on Saturday (June 06) in Dhaka in the presence of Prime Minister Sheikh Hasina and her Indian counterpart Narendra Modi.
Such a connectivity is a crucial input for mutual development of Bangladesh and India in terms of higher trade at a highly reduced cost.
"Trade between India and Bangladesh would be benefited by way of reduction in freight charges. It will also improve the utilization of port capacities and open up new opportunity for coastal vessels of the two countries. It will also help decongestion on roads, especially at the land custom stations/integrated check posts on the Indo-Bangladesh border," said Shipping Secretary of Bangladesh Shafiq Alam Mehedi.
The ports serving as trans-shipment routes for cargo of both countries will derive benefits by way of enhanced trade, said Shafiq Alam Mehedi, adding that both nations shall render the same treatment to the other country`s vessels as it would have done to its national vessels. The statement sums up the intention and benefits of the issue.
In fact, these days people do not like the term 'transit' or 'transshipment'. Connectivity is a more acceptable terminology economically and diplomatically. Bangladesh shares borders with India in the west and north exclusively and 85 per cent at the east with India. There are more than three dozen routes where the different regions of the two countries can have connectivity in trade and peoples' movement.
For absence of cross border connectivity, several Indian states, popularly known as Seven Sisters, suffer a lot of inconvenience in communicating with other parts of the country. These states and also land locked Nepal and Bhutan cannot trade freely with Bangladesh or use Bangladesh port facilities for international trade.  The multi-modal regional connectivity including road, rail and waterways, will open up a new horizon. India and Bangladesh can use each other's ports and other facilities to trade among themselves and with third countries. It remains to be seen how many of the connectivity would be ultimately agreed and implemented. Mere signing of MOU or agreements means little. The supporting infrastructure, customs facilities, visa and immigration formalities need to be modernized and updated.
A lot of things remain to be done. Road and railway infrastructure needs massive upgrading and development, security in country and across the border needs to be beefed up and digitized. The coastal shipping connections leading to Indian ports of Visakhapatnam, Paradeep and Haldia with Chittagong and Mongla can bring immense benefits for both countries and the region. The coast guards and navy of both countries must collaborate with each other in preventing human trafficking and illegal trading.
The connectivity of Assam and West Bengal, Tripura and West Bengal on road and rail across Bangladesh will also open up avenues for Indian states to use Chittagong and Mongla port for international trading. Bangladesh must also get opportunity to use Indian ports if and when required.  Using the connectivity through Indian territories Bangladesh, Nepal and Bhutan can also share Chittagong and Mongla port facilities.
The economies of South Asia are developing fast and energy security is a very essential facilitating element. Regional connectivity between and among India, Bangladesh, Nepal, Bhutan and even Myanmar will lead to power and energy grid connectivity for joint development of huge potential energy resources and sharing in regional grid. For this to happen on win- win basis there must be extensive regulatory reforms and vibrant private public partnership in the energy and power sector of the region.
Sharing of information, collaborating with experts' knowledge and joint development of resources must be the way to negotiate.
Trade between Bangladesh and India has grown rapidly during the past few years. Bangladesh is now India`s largest trade partner in South Asia.
Currently, there is no significant cargo movement between the sea ports of Bangladesh and India as it is not profitable for the big ocean going vessels to operate between the ports of the two countries.
Therefore, to reduce the cost of shipping operations, a lower but pragmatic standard of vessel known as River Sea Vessel (RSV) has been prescribed for coastal shipping.
The RSV category involves significantly lower construction and operation costs without compromising on safety aspect. For Indo-Bangladesh coastal shipping, the RSV category of vessel has been agreed upon by both the countries.
Bangladesh and India have moved closer to launching a direct coastal shipping line as the two countries have made progress on two vital issues - settlement of insurance for ships and determining the standards of the ships. Sadharan Bima Corporation of Bangladesh and General Insurance Corporation of India will act as the coastal vessels' insurers in their respective countries. Officials say, the two countries will buy insurance policies up to $10 million each.
Meanwhile, cargo vessel owners said that the move will benefit Bangladesh immensely as the country imported nearly $5.0 billion worth of goods from India during 2013-14. Many of these goods were brought to Chittagong or Mongla port via a third port such as Singapore or Colombo, which pushes up both freight costs and time.
Currently, Bangladesh imports goods from Visakhapatnam port in Andhra Pradesh, Haldia port in Kolkata or any other ports in India via Colombo or Singapore, which makes transportation of sea cargoes costlier - up to $110 per tonne.
Time may come when tourists from both Bangladesh and India will savour the majesty of the sea aboard luxury ships which may ply under the coastal shipping accord.  
The writer is a researcher on Indo-Bangladesh relations at East West University, Dhaka. satabdi2015@gmail.com