Wednesday, 14 April, 2021

Nepal, Bangladesh Forge Economic Partnership

President Bidya Devi Bhandari’s two-day state visit to Bangladesh from March 22 to 23 has further bolstered the bilateral relationship between the two friendly nations. The visit was instrumental in boosting high-level political understanding and economic partnership. This was the first highest level visit from Nepal to Bangladesh in one-and-a-half decades. The trip remained fruitful in the sense that the two sides signed four memorandums of understanding (MoUs) and letters of exchanges on the areas of connectivity, trade, energy cooperation, tourism and culture. It was Bhandari’s reciprocal trip. In November 2019, Bangladeshi President Mohammad Abdul Hamid had visited Nepal. The bilateral relations between the two nations have been cordial since they established diplomatic ties in 1972. Bangladesh is the youngest nation of South Asia and Nepal was the 7th country to recognise it. This is one reason behind the sound bonhomie between the two countries. Their ties are guided by the goodwill, mutual understanding and cooperation. They share common interest and similar views at various regional and international forums.

The accord on designation of Rohanpur-Singhabad railway as an additional transit route for the movement of traffic-in-transit is expected to enhance the bilateral trade and Nepal’s third country transit trade. Likewise, the deal on strengthening sanitary and phytosanitary (SPS) cooperation will ease the SPS measures and promote the trade of farm and other organic products. The two nations are for harmonising the SPS standards and technical barriers to trade (TBT) as both are facing the non-tariff barriers since long. Of late, the volume of bilateral trade has increased and it can further grow if various hurdles are sorted out to the benefits of the two nations.

The two nations hold huge potential in expanding and diversifying their trade. Nepal primarily exports vegetables, lentils, oil seeds, herbal plants, fruits and miscellaneous grains to Bangladesh while the imports from Bangladesh include fruit juices, paper and paperboard, jute and textiles, among others. In 1997, Kakarbhitta-Phulbari-Banglabandha transit route opened. Bangladesh also permitted Nepal to use the port facilities in Mongla and offered additional rail transit corridor to Nepal via Rohanpur (Bangladesh)-Singhabad (India). However, these facilities have not been effectively utilised owing to various factors. As the two countries have agreed to relax the SPS standards, the trade of agricultural items is expected to gather steam.

The two nations can well buttress their cooperation in the energy sector, too. Bangladesh has witnessed impressive economic growth in recent years. It is facing growing demand of electricity to fuel its industrialisation drive. That is why it has shown its interest in signing a power trade agreement to buy around 9,000 MW of electricity from Nepal by 2040. Nepal is rich in water resources and is going to complete a number of hydropower projects in the near future. So both the nations need to follow practical policy to promote energy collaboration that enables them to achieve rapid economic growth. The two nations have been working closely in a number of regional groupings such as the SAARC, South Asian Free Trade Area (SAFTA) and the Bangladesh, Bhutan, India, Nepal (BBIN) Initiative and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). It is imperative for them to advance their common interests and vision through these forums, thereby making bilateral relations more profound and productive.