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India has handed over 20 diesel-powered broad gauge locomotives to Bangladesh Railways as grant to ease the country's ongoing crisis of rail engines.

The locomotives entered Darshana railway station in Bangladesh from Gede station in India on Tuesday afternoon.

Railways Minister Nurul Islam Sujan and his Indian counterpart Ashwini Vaishnaw connected virtually and completed the handover process.

Nurul Islam Sujan said this a token of friendship and Bangladesh's relationship with India will be strengthened through railway communication.

He said that India's railway system has been converted to broad gauge. "Bangladesh is also taking such a decision. Gradually all lines will be broad gauge."

India's Railway Minister Ashwini Vaishnab said that increasing multi-directional connectivity is a priority for the governments of the two countries.

He also remarked that railway connectivity has the potential to transform the economy of both countries as well as the entire region.

He mentioned that Bangladesh is India's largest development partner of $10 billion.

Under the Indian line of credit, projects in the railway sector at a cost of $300 million have already been completed and projects worth more than $1.69 billion are in various stages of implementation, he added.

According to railway sources, while selecting the engines from India, it has been taken into consideration whether they will be compatible with the overall railway network of Bangladesh including railway tracks, stations, and signal systems.

Following the execution of an agreement between India and Bangladesh, the broad gauge engines were brought into the country after detailed verification of specifications, import clearance, customs duty, VAT and tax procedures, they said.

Earlier in 2020, Bangladesh received 10 broad gauge locomotives as a grant from India. The earlier locomotives are currently plying the western route.

Humayun Kabir, secretary at the Ministry of Railways, and Indian High Commissioner Pranay Kumar Verma were present during the handover process.

Locomotives in Bangladesh

According to Bangladesh Railways sources, there are 315 locomotives of meter gauge and broad gauge in the railway fleet.

Railways are currently operating around 400 trains with these engines.

However, the number of running engines is only 271. The majority of the engines in the fleet have reached the end of their economic life.

Although the economic life of railway engines is fixed at 20 years, most of the engines are over 40 years old.

Most of the trains cannot run at the desired speed on these old engines.

 

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Bangladesh and India will settle a portion of bilateral trade transactions in rupee, not through the taka-rupee swap that has been under extensive discussions over the past few months.

The Bangladesh Bank has permitted Sonali Bank and Eastern Bank Limited (EBL) to open nostro accounts in rupee with the State Bank of India and ICICI Bank.

Only the income earned in rupee from exports can be deposited into these accounts. And the money deposited in these accounts can only be used to meet the cost of goods and services imported from India.

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Besides, in the case of imports, advance payments can be made from these accounts with approval from the Bangladesh Bank. Overdrafts and short-term loans can be taken against these accounts following the central bank's guidelines for forex transactions.

Sonali, EBL apply to open nostro accounts

Sonali Bank and EBL have already applied to the Reserve Bank of India for opening nostro accounts, according to officials of the two Bangladeshi banks.

A nostro account refers to an account that a bank holds in a foreign currency in another bank. nostros, a term derived from the Latin word for "ours", is frequently used to facilitate foreign exchange and trade transactions.

Talking to The Business Standard, EBL Managing Director Ali Reza Iftekhar said, "The Bangladesh Bank has given us the approval to open a nostro account in Indian banks."

Accordingly, an application has been sent to the Reserve Bank of India for opening a nostro account in the State Bank of India, he added.

Amid the dollar crisis caused by the Russia-Ukraine war, there have been talks for months on settling parts of bilateral trade in local currencies, enabling Bangladeshi businessmen to sell goods or services to Indian counterparts for rupees.

Similarly, Indian businessmen will sell their goods and services to Bangladeshi businessmen for taka.

It was discussed that Sonali Bank and EBL will open accounts with the State Bank of India and ICICI Bank. Both the Indian banks will also open similar accounts with the two Bangladeshi banks.

But at one stage of the discussions, the Indian side asked for transactions only in rupee and Bangladesh agreed.

Banks hope to be ready by June

Officials from the two banks concerned hope the banks of the two countries will be able to finish preparations for such transactions by next June. After that, the official announcement will be made regarding the opening of LCs under the initiative.

Banks other than Sonali Bank and EBL will be able to conduct transactions with India through these two banks in this manner.

"Initially we said the Indian banks will open vostro accounts in our banks. But now the Indian side says it will not be necessary. Transactions can be done without opening an account in Bangladesh," Ali Reza said.

A vostro account is an account held by a foreign bank in domestic currency at our bank.

"Many transactions will not be possible in the beginning. You have to proceed step by step. As much as rupees will be available against Bangladesh's exports, the liabilities of import from India has to be paid with the same amount of rupees," said Ali Reza Iftekhar.

In the fiscal 2021-22, Bangladesh's exports to India amounted to $2 billion, while imports from India to Bangladesh were approximately $13.69 billion. Over the past two years, Bangladesh's exports to India have increased, and it is expected that the volume will further increase.

Majbaul Haque, executive director and spokesperson of Bangladesh Bank, recently told TBS that the central bank of India had issued guidelines for direct transactions in rupees several months ago.

"Bangladesh has reviewed the matter in the light of this decision of the Reserve Bank of India and has taken a policy decision to conduct bilateral transactions in rupees."

In a commerce minister-level meeting of the two countries held in New Delhi in December last year, the Indian side gave a verbal proposal to use their rupee in bilateral commercial transactions. Bangladesh then asked India to make a formal proposal.

RBI, the Indian central bank, in a circular on 11 July last year, has allowed international trade transactions to be settled in rupees. It is said that all import-export transactions will be in rupee. The exchange rate between the two countries will be market-based.

India trades in rupee with 18 countries

In March, Indian Union Minister of State for Finance Bhagwat Krishnarao Karad told the Rajya Sabha that the Reserve Bank of India has already arranged for trade with 18 countries to be settled in rupees.

This arrangement has already started with Malaysia. India wants to increase the value of the rupee in the international market. For this, the country has initiated discussions with several countries, including Russia, besides Bangladesh.

Bangladeshi businessmen and analysts, however, recommended proceeding with caution about this and said this arrangement may create dependency on rupee.

Besides, Bangladesh has a big trade deficit with India and therefore, it may be at risk in dealing in rupees.

Businessmen, bankers express apprehension

A businessman, on condition of anonymity, said he fears that at some point it will be seen that banks in India are not accepting LCs in any currency other than rupees. Then rupees have to be bought with dollars and in that case, the exchange rate may suffer losses.

A banker also thinks so. He said the raw materials of the products that are being exported to India are imported from other countries.

"Where will the exporter get the money to import the raw material by exporting in rupees? There is doubt if any bank will be found in the country to buy dollars with rupees. As a result, such initiatives will take time to succeed."

And exports to India should increase, he added.

Of late, there have been discussions in countries around the world about free trade agreements and currency swaps to increase bilateral trade. Asian Clearing Union (ACU) countries are negotiating payment of import duties in their own currencies.

Last year, Bangladesh Bank approved the opening of LCs in the Chinese currency yuan. Some banks including Uttara Bank have opened such LCs. Bangladesh is also working on signing a currency swap agreement with Russia.

Amid the rise in commodity prices due to the Russia-Ukraine war, several countries are facing a dollar crisis. Apart from this, due to geopolitical reasons, different countries around the world are becoming interested in doing transactions in their own currencies, avoiding the dollar. India also wants to increase international transactions in its currency.

The BRICS countries – India, Russia, China, Brazil and South Africa – have also started discussions on starting import and export in their own currencies, avoiding the dollar. Saudi Arabia has also decided to export fuel oil to China in yuan.

Economist advises proceeding with caution

Executive Director of South Asian Network on Economic Modeling (Sanem) Selim Raihan thinks the initiative to trade in other currencies other than the dollar is fine in the current foreign currency crisis.

"And it is better if it can be done with a big trading partner like India. But we need to check how realistic it is for Bangladesh. Because the import of Bangladesh from India is about 15 billion dollars. And Bangladesh is exporting 2 billion dollars to India," he said.

"Where will Bangladeshi traders or banks get enough rupees to pay the entire import bill from India? If rupees have to be bought with dollars, it needs to be reviewed," he added.

On the other hand, Indian currency is not an internationally convertible currency. Therefore, the rupees available against exports to India cannot be used to meet the liabilities of any other country.

For this reason, Selim Raihan says, Bangladesh should do the transaction in rupees as much as it will get from export to India. If the rupees earned by Bangladesh can be used to import from India, it will reduce the pressure on the dollar.

 

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India on Thursday (1 June) gave its nod to Bangladesh and Nepal's request to allow them to conduct power trade using its transmission network, reports Business Standard.

The decision was made known during talks between India's Prime Minister Narendra Modi and his Nepalese counterpart Pushpakamal Dahal 'Prachanda', officials said.

"Last year, we adopted a landmark vision document for cooperation in the power sector," Modi said adding, "Taking this forward, a long-term Power Trade Agreement has been signed between India and Nepal today,"

Bangladesh and Nepal held Joint Working Group and Joint Steering Committee meetings in Dhaka on 15-16 May to discuss taking India in a tri-nation agreement regarding power trade.

Nepal can only sell electricity to Bangladesh through India due to the absence of a direct geographical connection between Nepal and Bangladesh.

The proposed transmission routes include Anarmari (Nepal) to Panchagarh (Bangladesh), spanning a total length of 49km. Should this transmission line be constructed, it would require utilizing 24km of Indian territory, as reported by the Power Grid Company of Bangladesh Limited during a presentation.

Another proposed route is from Anarmari (Nepal) to Thakurgaon (Bangladesh), covering a distance of 83km. Constructing the transmission line along this alignment would necessitate the utilisation of 33km of Indian territory.

Apart from the dedicated transmission lines, Nepal is also considering enhancing the capacity of existing transmission infrastructure to facilitate increased power trade between Nepal and Bangladesh through India.

 

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There has been sharp reaction and debate in Bangladesh's political circles over the map of 'Akhand Bharat' (Undivided India) that is on display in the form of a mural at India's new parliament building. Various political parties in Bangladesh have expressed their anger at Bangladesh being included in such a map. These parties have criticised the map and protested against it, as well as demanded that it be removed.

Ruling Awami League, however, has had no reaction on the issue. The party leaders have said they are trying to find out what is trying to be conveyed by means of this map.

Prothom Alo spoke to three senior leaders of Awami League and two ministers. They were unwilling to comment on the matter. They said they had no idea about the mural of the Akhand Bharat map in India's parliament building. They will try to find out what India is trying to convey through such a map. Attempts were made to contact Bangladesh foreign ministry in this regard, but no immediate statement was provided.

Speaking to Prothom Alo, Hasanul Huq Inu, president of JaSad, a major ally of the Awami League-led 14 party alliance, said there is no such thing as Akhand Bharat in the post-1947 political map. The display of a map of undivided India in India's parliament building is unwarranted. He hoped that the Indian authorities would amend this and display the accurate map.

Opposition BNP has criticised and protested the making of such a map. The party has said this is an insult to sovereign Bangladesh. BNP secretary general Mirza Fakhrul Islam Alamgir, speaking to Prothom Alo, said, "Displaying Bangladesh as part of the undivided map of any other country is a threat to the country's independence and sovereignty." He feels this is an insult to Bangladesh.

The map of Akhand Bharat on display at India's parliament includes Afghanistan, Pakistan, Nepal, Bangladesh, Sri Lanka and Myanmar. There has been reaction within Nepal against this too.

A number of left leaning parties in Dhaka, on Saturday, issued a statement criticising and protesting against such a map in India. President of the Communist Party of Bangladesh (CPB) Mohammad Shah Alam and general secretary Ruhin Hossain, in a statement said that the Indian government, out of petty political motives, had put up this mural of the objectionable and misleading map. The CPB leaders demanded immediate removal of the map. They feel that this mural will lead to a deterioration of India's relations with its neighbours.

Rastra Sangskar Andolan, in a statement, protested against the drawing up of such a map. It said, "It is objectionable for Bangladesh to be included as part of Akhand Bharat in the imagined map of the Indian rulers."

General Secretary of Biplobi Workers Party, Saiful Huq, in a statement on Saturday, said the map of Akhand Bharat depicts Bangladesh and other countries of the region as a part of India. This is a threat to the country's independence and sovereignty as well as national security.

Several political analysts feel that the Bangladesh government should ask India for an explanation about the matter. Writer and researcher Mohiuddin Ahmed, speaking to Prothom Alo, said, "Many Indian politicians have not accepted the partition of India in 1947. They may still cherish the aspiration of undivided India." However, he feels, the Bangladesh government should ask India for an explanation as to what they are trying to convey by drawing this map.

 

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@Nilgiri @Gessler

And Now we have Akhand Bharat mural in India's New perlament.

I told you, it was more serious than some fanboy made map on twitter.
 

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There has been sharp reaction and debate in Bangladesh's political circles over the map of 'Akhand Bharat' (Undivided India) that is on display in the form of a mural at India's new parliament building. Various political parties in Bangladesh have expressed their anger at Bangladesh being included in such a map. These parties have criticised the map and protested against it, as well as demanded that it be removed.

Ruling Awami League, however, has had no reaction on the issue. The party leaders have said they are trying to find out what is trying to be conveyed by means of this map.

Prothom Alo spoke to three senior leaders of Awami League and two ministers. They were unwilling to comment on the matter. They said they had no idea about the mural of the Akhand Bharat map in India's parliament building. They will try to find out what India is trying to convey through such a map. Attempts were made to contact Bangladesh foreign ministry in this regard, but no immediate statement was provided.

Speaking to Prothom Alo, Hasanul Huq Inu, president of JaSad, a major ally of the Awami League-led 14 party alliance, said there is no such thing as Akhand Bharat in the post-1947 political map. The display of a map of undivided India in India's parliament building is unwarranted. He hoped that the Indian authorities would amend this and display the accurate map.

Opposition BNP has criticised and protested the making of such a map. The party has said this is an insult to sovereign Bangladesh. BNP secretary general Mirza Fakhrul Islam Alamgir, speaking to Prothom Alo, said, "Displaying Bangladesh as part of the undivided map of any other country is a threat to the country's independence and sovereignty." He feels this is an insult to Bangladesh.

The map of Akhand Bharat on display at India's parliament includes Afghanistan, Pakistan, Nepal, Bangladesh, Sri Lanka and Myanmar. There has been reaction within Nepal against this too.

A number of left leaning parties in Dhaka, on Saturday, issued a statement criticising and protesting against such a map in India. President of the Communist Party of Bangladesh (CPB) Mohammad Shah Alam and general secretary Ruhin Hossain, in a statement said that the Indian government, out of petty political motives, had put up this mural of the objectionable and misleading map. The CPB leaders demanded immediate removal of the map. They feel that this mural will lead to a deterioration of India's relations with its neighbours.

Rastra Sangskar Andolan, in a statement, protested against the drawing up of such a map. It said, "It is objectionable for Bangladesh to be included as part of Akhand Bharat in the imagined map of the Indian rulers."

General Secretary of Biplobi Workers Party, Saiful Huq, in a statement on Saturday, said the map of Akhand Bharat depicts Bangladesh and other countries of the region as a part of India. This is a threat to the country's independence and sovereignty as well as national security.

Several political analysts feel that the Bangladesh government should ask India for an explanation about the matter. Writer and researcher Mohiuddin Ahmed, speaking to Prothom Alo, said, "Many Indian politicians have not accepted the partition of India in 1947. They may still cherish the aspiration of undivided India." However, he feels, the Bangladesh government should ask India for an explanation as to what they are trying to convey by drawing this map.


State Minister for Foreign Affairs Md Shahriar Alam said that the Bangladesh Embassy in Delhi has been instructed to contact the country's Ministry of External Affairs to get India's official explanation on this matter.

Shahriar Alam told reporters at the Ministry of Foreign Affairs on Monday afternoon: “There is no reason to express doubts about it. However, for further clarification, we have asked the mission in Delhi to speak to the Indian Ministry of External Affairs to find out what their official explanation is.”

He said: “What we learnt is that India's Ministry of External Affairs spokesperson said that this is a map of the Ashoka Empire, 300 years before the birth of Christ. It includes a map of the area at that time and a mural. The mural depicts the journey of people. There may be cultural similarities, but it has nothing to do with politics.”

 

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@Nilgiri @Gessler

And Now we have Akhand Bharat mural in India's New perlament.

I told you, it was more serious than some fanboy made map on twitter.
Dude it's literally a map of Empire of king Ashoka but all of you suddenly has to make it "Akhand bharat" mural.overreacting to things you don't completely understand has become a trait for our neighborhood
 

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Dude it's literally a map of Empire of king Ashoka

Officially? Yes.

but all of you suddenly has to make it "Akhand bharat" mural.

Well, BJP politicians are themselves calling it that name.

"The resolve is clear - Akhand Bharat," Parliamentary Affairs Minister Pralhad Joshi said on Twitter.

Or this one.

overreacting to things you don't completely understand has become a trait for our neighborhood

It is not Rocket science.
Clearly it was provocative.
Hence you have diplomatic reaction from Napal, BD and Pak.
 

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Officially? Yes.



Well, BJP politicians are themselves calling it that name.

"The resolve is clear - Akhand Bharat," Parliamentary Affairs Minister Pralhad Joshi said on Twitter.

Or this one.



It is not Rocket science.
Clearly it was provocative.
Hence you have diplomatic reaction from Napal, BD and Pak.
Bruh.. he means the places of culture similarity and if you are gonna go that way many Islamists nutjobs in Bangladesh also advocate for "greater Bangladesh"some fringe fanboy ideas of some dumb nitwits and people go gaga over it as if india gains anything other than harm from assimilating these countries
 

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Bruh.. he means the places of culture similarity and if you are gonna go that way many Islamists nutjobs in Bangladesh also advocate for "greater Bangladesh"some fringe fanboy ideas of some dumb nitwits and people go gaga over it as if india gains anything other than harm from assimilating these countries

It is absurd to equate between fringe radical's advocacy and ministers, government high official's Remarks.

The later carry much more consequences.

And that is precisely the problem.

In Bangladesh fringe radicals are the ones who advocates for 'greater Bangladesh'. While in India, advocacy for 'Akhand Bharat' comes from people with actual authority and government officials. Thus, making it much more consequential and mainstream.
 
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Marlii

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It is absurd to equate between fringe radical's advocacy and ministers, government high official's Remarks.

The later carry much more consequences.

And that is precisely the problem.

In Bangladesh fringe radicals are the ones who advocates for 'greater Bangladesh'. While in India, advocacy for 'Akhand Bharat' comes from people with actual authority and government officials. Thus, making it much more consequential and mainstream.
If you really take shit politicians tell to get votes seriously then may God be with you.politicians here babble about taking back Kashmir since 2014 🤣 if you guys are still paranoid then it's fine by me.even if someone protests they ain't gonna even take it seriously.
 

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The border guarding forces of India and Bangladesh have agreed to initiate five development projects along the 4,096-kilometre shared boundary aimed at improving the lives of the local population and reducing tensions along the border, reports the Business Standard

The five projects include the construction of a bailey bridge, road repair, and the strengthening of retaining walls. The projects will be implemented in five states along the border: Assam, West Bengal, Mizoram, Meghalaya, and Tripura.

The agreement to initiate the development projects was reached at the end of the 53rd Director General level border coordination conference in Delhi from 11-14 July between the Border Security Force (BSF) of India and the Border Guard Bangladesh (BGB).

"During this conference, in a momentous decision, that will have a profound positive impact on the lives of the population along the India-Bangladesh border, a total of five developmental projects were agreed upon, enhancing the joint efforts towards progress and prosperity in the region," said the BSF in a statement.

It added, "This decision is a significant step towards improving the overall quality of life and will serve to foster stronger bilateral trade and relations between the two countries."

The two parties also said that they are working together to reduce misunderstandings and miscommunications that lead to violence and deaths along the border.

Acting BSF DG Sujoy Lal Thaosen said his troops had to fire on miscreants "only as a last resort".

"We have discussed various measures to reduce these killing incidents and sometimes it was seen that there was misunderstanding or miscommunication between lower-level or ground-level troops and we (BGB and BSF) are working together on this issue," said BGB DG Maj Gen AKM Nazmul Hasan.

They also discussed monitoring trespassing, intensifying public awareness programmes, sharing of real-time information and making all-out efforts to bring criminals to justice.

A BSF delegation is expected to travel to Dhaka for the next round of these talks later this year.

 

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The Bangladesh Bank has decided to launch a taka-rupee based debit card in the country from September, aiming to save dollars.

This card will allow users to make various payments, including domestic purchases, using Taka, as well as enable them to spend in Indian rupees when traveling to India.

Bangladesh Bank Governor Abdur Rouf Talukder made this announcement while presenting the new monetary policy for the first half of FY23-24 on Sunday (18 June).

"Holders of this card will be able to use it as a debit card within Bangladesh. When traveling to India, they will have the convenience of spending up to $12,000 worth of rupees through their travel quota using this card," said the governor.

The introduction of this card is expected to eliminate the need for double currency exchanges, thereby saving the 6% expenditure loss incurred in converting taka to dollars and then dollars to rupees, the governor added.

He said this convenience will be particularly beneficial for Bangladeshi tourists who frequently visit India.

Bangladesh holds the distinction of being among the countries with the highest number of tourists visiting India, with over 21.56 lakh Bangladeshis visiting in 2017 on tourist visas.

Governor Abdur Rouf Talukder further mentioned that Bangladesh and India have reached an agreement to settle a portion of their bilateral trade transactions in their respective currencies, aiming to alleviate the pressure on dollar reserves.

He stated, "We have nearly $2 billion worth of exports to India, and this portion will be settled in rupees."


 

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The Indian Railway Ministry has recently allocated Tk202.99 crores (Rs153.84 crores) for the ongoing construction of a railway line connecting Tripura in India to Bangladesh, reports The Economic Times.

"The Tk1138.18 crore Agartala-Akhaura (Bangladesh) railway project is expected to be operational by the end of this year or early next year," the report said.

Northeast Frontier Railway's (NFR) Chief Public Relations Officer Sabyasachi De stated, "The funding of the project is being done by the Ministry of Development of North Eastern Region (DONER) and already about Rs708.74 crores [Tk935.18 crores] of the anticipated cost has been provided and utilised."

He added that the rail project would boost relations between the two countries, and facilitate the growth of small businesses and tourism in the border regions. It would also boost imports and export between the countries.

Spanning a length of 15.064km, the railway line comprises 5.05km in India and 10.014km in Bangladesh.

It would link Bangladesh's Akhaura to Tripura's Agartala through an international immigration station at Nischintapur, which would be a dual gauge station for both passenger and goods interchange between India and Bangladesh, according to the report.

The project includes one major bridge and three minor bridges.

"After completion of the project, the travel time between Agartala and Kolkata via Dhaka of about 31 hours would get reduced to 10 hours," Sabyasachi said.

Officials from the NFR in Agartala have reported that over 90% of the work on the Indian side of the Agartala-Akhaura railway project has already been completed.

 

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Four more proposed development projects are in the process of being dropped from the Indian Line of Credit (LoC) list due to complications over implementation and loan terms. India was supposed to lend $1.01 billion to these projects.

A proposal was sent to the Indian authorities to withdraw these projects from the LoC list due to the unwillingness of the implementing agencies, according to officials of the Economic Relations Division (ERD).

However, the $1 billion loan meant for these projects will be transferred to other ongoing projects running under Indian credit and are facing cost increases.

At present, 40 projects are running under Indian LoC and the number will come down to 36 if the four proposed projects are dropped.

ERD officials said two projects were dropped from the LoC list in May this year with the consent of the Indian authorities. However, the consent to delist the proposed four projects is yet to be obtained from the Indian authorities even though the government proposed the exclusions last December.

According to ERD sources, the projects that are being withdrawn are a railway project for constructing a new carriage workshop in Saidpur at $70.28 million, the Bangabandhu Sheikh Mujib Shilpa Nagar project at $165 million, Bay Container Terminal project at $400 million, and Saidpur Airport project at $375 million.

Implementing agencies allege that the Indian loan scheme has various conditions, which include sourcing 75% of construction materials from India. Apart from this, approvals from the Indian authorities are delayed at various stages, starting from the preparation of tender documents to the appointment of contractors.

Besides, only Indian contractors can participate in Indian debt financing. It was observed that the Indian contractors often bid more than the estimates. Due to these complications, implementing agencies are not interested in implementing these projects.

The two projects that were excluded with the consent of the Indian authorities last May 2023 were Solar Based Stations for Strengthening the Teletalk Network project with a loan of $30 million and Supply Machinery for Solid Waste Management project with a loan of $24.83 million.

Six projects have been dropped from the LOC list in the last three years, including two projects dropped in May 2023.

Besides, packages of two more projects — construction of the Rooppur power transmission line and Khulna-Mongla railway — have also been excluded from the LoC list. India's loan offer for these projects and packages was $1.13 billion.

India is lending a total of $7.362 billion under the three LoC credit agreements. Of these, the first contract on the LoC for $862 million was signed on 7 August 2010. The second LoC loan agreement for $2 billion was signed on 9 March 2016 and the third LoC with India worth $4.5 billion was signed in March 2017.

Additional loan sought from India

Bangladesh is seeking an additional $804.26 million loan from India for the ongoing projects.

ERD officials said the cost of these projects has increased due to design changes, addition of new components and implementation delays.

The Barapukuria–Bogura-Kaliakair 400 KV line project requires an additional $385 million, the construction of 3rd and 4th dual gauge tracks in the Dhaka-Tongi section and the doubling of the dual gauge track in the Tongi-Joydebpur section project $178 million, Khulna-Mongla railway line project $80 million, Ashuganj River Port-Sarail-Akhaura four-lane project $71.06 million, $55 million for setting up IT, hi-tech parks in 12 districts and an additional $35.18 million in Ashuganj Container river port project.

These projects initially had an Indian loan proposal of $1.17 billion. Due to the cost hike, the debt is now increasing to $1.97 billion.

 

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India's Amara Raja Infra Private Limited (ARIPL), a part of the $1.75 billion Amara Raja Group, has forayed into the international solar power market by bagging a $130 million project in Bangladesh along with Hyderabad-based solar modules manufacturer Premier Solar Powertech.

The project, which would be built on over 326 acres at Madarganj in Jamalpur district, is slated for completion in the next 18 months, reports the Times of India.

"In a short period of time, we have taken on some of the biggest renewable energy projects in India, and with this project we can establish ourselves as a serious player in the international market as well," said ARIPL Director Vikramaditya Gourineni.

EXIM Bank of India is funding the 100MW project, it was secured from Rural Power Company Ltd in Bangladesh and its scope includes engineering, design, supply, installation and commissioning.

ARIPL will also be providing comprehensive operation and maintenance services for a period of two years, along with warranty spares and consumables.

 

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The Asian Development Bank, a long-time partner of Bangladesh in improving railway infrastructures and promoting sub-regional connectivity, now turns its eye on rail-based cargo movement between India and Bangladesh.

The lender has already initiated a study to identify infrastructure gaps, propose technology-based solutions for cargo and container movement, and recommend regulatory reforms to facilitate freight train operations between the two countries.

Also, the study, under its South Asia Subregional Economic Cooperation Programme, will explore the potential for transit cargo to and from Nepal and Bhutan, benefiting all stakeholders.

The ADB's latest study aimed at quantifying the benefits of rail-based cargo and container movement between India and Bangladesh.

3 Categories of rail traffic

An ADB mission has already met with Bangladesh Railway and National Board of Revenue officials on 23-25 May and discussed the prospects of three categories of railway traffic between the two neighbours: bilateral trade, Bangladeshi and Indian traders using rail network and ports of each other's country, and Indian domestic cargo movement between the North East and the rest of India transiting through Bangladesh.

Dhaka suggests inclusion of Nepal, Bhutan

In response to the proposals, Bangladesh officials, while highlighting the importance of connectivity with India's northeast, suggested if Nepal and Bhutan could be incorporated in such a rail cargo network. The study team was advised to come up with a proposal for a transit fee to be applied on rail-based cargo that should be justified and acceptable to stakeholders on both sides of the border.

The outcome of the study will be a clear "go-no go" analysis of the concept of rail-based cargo movement and containerised rail movement and find their feasibility for different products, different origins and destinations, prepare a comprehensive list of enabling infrastructure projects and regulatory intervention that is required, reads an ADB document.

During the meeting, the Bangladesh Railway has proposed that the ADB study should provide recommendations on the pipeline of projects that can bring in transport and logistics efficiency in India – Bangladesh trade with a special focus on containerised movement by rail.

The new rail route opening via the Padma Bridge also needs to be covered by the study, it was suggested in the meeting, attended by railway senior officials including its director general.

The study should come up with a roadmap beneficial for Bangladesh, Bhutan, India and Nepal, officials said, emphasising the importance of restoring old links and addressing missing links in India to enhance regional transit connectivity.

SM Salimullah Bahar, Chief Planning Officer of the Bangladesh Railway, said they suggested ADB include some more issues in the study.

He expressed optimism about securing ADB financing for the rail-based cargo movement project.

ADB likely to fund

An official at the Economic Relations Division (ERD), who wished not to be named, said the ADB is not only doing the study on the rail cargo link, it will fund the necessary infrastructures after the study. "The ADB is promoting regional connectivity as well as regional trade. It is hoped that the agency will invest in expansion of trade through railways," the official said.

"The new study will determine which infrastructures will be needed for introducing cross-border rail cargo-based trade and what will be the cost. On the basis of the study, ADB will decide its lending programme," the ERD official added.

The final report of the mid-term survey is scheduled for submission in September this year, according to the ADB document.

The study also aims to assess the infrastructure status at interchange points, such as Benapole, Darshana, Rohanpur, Birol, and Burimari, and identify gaps in the existing railway network. Upgrading loop lines, sidings, container handling and storage infrastructure, and goods sheds at key stations are among the proposed recommendations. The study will also explore additional commodities that Bangladesh can export to India, Nepal, and Bhutan.

The ADB team believed that the Electronic Cargo Tracking System (ECTS), being used in the India-Nepal containerised movement, can well be replicated in such an arrangement between Bangladesh and India.

Analysts and businesses said the rail-based cargo movement initiative between India and Bangladesh holds immense promise for both countries. With existing railway infrastructure and the ongoing efforts of the ADB, this mode of transportation has the potential to unlock new opportunities and foster stronger economic ties between the two nations.

Dr Mostafa Abid Khan, a former member of the tariff commission, has said rail cargo-based trade links with India have been in talks for long. Though a small quantity of merchandise trade is now being carried by rail cargo, there is a scope for expansion.

"If there is more trade through rail cargo, the cost will come down both at import and consumer levels. This will cut export-import time, which will benefit both countries," he said.

But which routes would be suitable for rail cargo trade need to be determined through study and customs points developed accordingly, the trade policy analyst said.

If regular rail cargo trade is introduced, it will widen the scope for transit through Bangladesh in future, he added.

Railway officials informed the ADB mission of the interest expressed by some apparel and other commodity exporters in using Indian Ports (Mumbai Nava Sheva and others) for exporting to third countries to take the benefit of direct connectivity without transshipment, as offered by India to Bangladesh.

NBR grants permission to trains to India

Until November 2022, rail trade between India and Bangladesh heavily favoured India, with one-sided transportation. However, on 4 November last year, the National Board of Revenue granted permission for trains carrying Bangladeshi goods from Benapole to make return journeys into India, marking a significant shift in trade dynamics.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), feels that full-fledged operation of rail cargo trade will benefit both Bangladesh and India, as it will relieve traders of hassles in land port-based trades.

"Now a small volume of products are shipped through rail from India, which is very negligible compared to the total imports from India. But there is hardly any export from Bangladesh being transported by rail," the apparel sector leader said, stressing that there should be arrangements for export-import through rail in the interest of the economy.

Rail cargo-based trade links can be introduced on the priority basis through four routes--Benapole, Darshana, Hili and Akhaura, said Hatem.

Unilever wants raw materials import by train

Unilever Bangladesh, which depends on around 40% of its raw materials on India, had been trying for over two years to convince both Bangladesh and India to allow the import of bulk raw materials by train.

"Why does Bangladesh not use the railway as a means of carrying raw materials in bulk? It can unclog the roadways," Kedar Lele, then CEO of Unilever Bangladesh, told The Business Standard in an interview in July 2020.

Finally, it happened in July two weeks ago as a cargo train came from India, where Unilever Bangladesh brought in nearly 1,200 tonnes of much-needed raw materials. Unilever imported raw materials in 22 bogies, taking 60 trucks off the roads.

In support of the RMG and textile business in Bangladesh, for the first time, 468 tonnes of cotton yarn was transported to Benapole by rail in the same year. As a result, bilateral trade via rail has recorded an unprecedented year-on-year growth of 130%, according to the Indian High Commission in Dhaka.

No transit fee

Dr Mohammad Yunus, senior research fellow at Bangladesh Institute of Development Studies (BIDS), also believes rail cargo will reduce cost of business which will benefit traders of both countries.

Asked about the railway's proposal for applying transit fee on rail-based cargo, the economist said as per the World Trade Organisation (WTO) rules, no transit fee can be applied. Instead, a long-term marginal cost is charged to compensate for the damage, if there is any, during movement of Indian cargo trains through Bangladesh's territory, he said.

 

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Bangladeshi businesses engaged in trade with India now have the option to settle their transactions in a currency other than the US dollar as the two neighbouring countries will be able to commence transactions in the rupee from today (11 July).

Currently, Bangladesh conducts its external trade exclusively in the American greenback. However, over the past 12 months, the appreciation of the US dollar against the taka by approximately 25% has significantly impacted foreign exchange reserves, which have shrunk by a third since the onset of the Russia-Ukraine war.

"We are providing an option to businesses that wish to conduct trade with India in rupee. This will gradually alleviate the pressure on the US dollar, which has made it challenging for many businesses to import," said Ali Reza Iftekhar, managing director of Eastern Bank Limited, one of the two local banks authorised to settle import bills from India in rupee. The other is the state-owned Sonali Bank.

Under the new arrangement, banks will be able to settle the import liability equivalent to the amount of rupees received from export proceeds. In the fiscal 2021-22, bilateral trade between Bangladesh and India amounted to about $16 billion, with Bangladesh's exports reaching only $2 billion. According to recent data, more than 19% of the country's total imports came from India until March of the fiscal 2022-23.

Considering the present bilateral trade figures, it is evident that Bangladeshi businesses can settle their import bills with Indian suppliers in rupees, up to a maximum value of $2 billion. The transaction in rupee will increase if Bangladesh can ship more products to India, bankers said.

However, not all businessmen may be interested in the rupee settlement, as it is not mandatory for them, clarified Iftekhar. He stated, "We will announce on Tuesday that we are ready for trade in rupees. Now we need to raise awareness among businesses about this issue so that they feel comfortable trading in a new currency."

Iftekhar said trading in rupees may save Tk1 per dollar in terms of exchange rate losses. Regarding the taka-rupee exchange rate, the top banker stated that the US dollar will serve as the reference rate. This means that the rate will be determined based on the US dollar-rupee and US dollar-taka exchange rates.

According to him, they have applied for transactions in both rupees and taka, and the Reserve Bank of India has approved it. He mentioned that initially, the transactions will be conducted in rupees only for small amounts, with the volume gradually increasing in phases. Furthermore, trading in taka will be introduced later, he informed TBS.

Afzal Karim, the managing director of Sonali Bank, said all concerned parties, including traders, will receive detailed information about the matter. He noted that transactions may not take place on the opening day, as those interested in availing of the facility need to make necessary preparations.

Karim mentioned that they have completed all the required procedures, such as opening the Relationship Management Application (RMA) with the State Bank of India and the Industrial Credit and Investment Corporation of India (ICICI) bank. The RMA is necessary to open import letters of credit (LCs), he added.

He said a dedicated desk has been established for traders, which will provide all kinds of assistance to importers or exporters wishing to trade in rupees.

Both top bankers mentioned that if there is a shortage of rupees, they can obtain loans from the State Bank of India (SBI) and ICICI under a credit line, but these loans are short-term.

Abdul Matlub Ahmad, the president of the India-Bangladesh Chamber of Commerce and Industry, emphasised that Bangladesh's trade with India in rupees will benefit small businesses the most, as they struggle to obtain the greenback. He added that they will also benefit from saving on exchange rate losses.

The move to trade in rupees follows the Reserve Bank of India's decision last year to allow the settlement of international trade in the Indian currency.

Since the war began in February 2022, Bangladesh has been grappling with settling import bills and opening new LCs for imports due to a dollar crisis. The country's forex reserves have decreased by more than a third since then, reaching below $30 billion, which is a seven-year low.

In February 2022, the value of Bangladesh's taka fell to Tk109 for LC payments, compared to Tk86 per US dollar.

Industry insiders stated that LCs can be opened in five currencies recognised by the International Monetary Fund (IMF) and Canadian dollars, from any bank branch involved in foreign exchange transactions. No separate permission from any bank is required for this. The five currencies recognised by the IMF are the US dollar, euro, British pound, Japanese yen, and Chinese yuan. Although China's currency has been recognised by the IMF since 2016, the Bangladesh Bank allowed opening of LCs in yuan last September. Since 2018, the opening of a clearing account with the Bangladesh Bank in yuan has been permitted. However, there has not been much interest in trading in other currencies, including the yuan, outside of the dollar.


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Bangladesh and India are gearing up to sign a Memorandum of Understanding (MoU) that will ensure mutual cooperation by both parties in conducting scientific research in the Bay of Bengal and the Indian Ocean, as well as facilitate an exchange of scientific and technical data and samples.

According to the draft agreement seen by The Business Standard, areas of mutual cooperation in research will include monsoon and climate change, air-sea interaction, ocean processes, circulation and dynamics, biogeochemistry, ecosystem characteristics and marine biology, sedimentology and marine sedimentary processes, marine pollution, and paleo-oceanography and tectonics.

Bangladesh has already finalised the draft agreement based on the one sent by India at an inter-ministerial meeting held on 9 April.

The Bangladesh Oceanographic Research Institute (BORI) and India's National Institute of Oceanography (NIO), will sign the MoU.

When asked about the progress in the MoU signing process with India, BORI Director General (additional charge) Md Moinul Islam Titas told The Business Standard, "Efforts are underway to finalise the draft…But it is not possible to say at what stage the process is now, without seeing the file."

In its draft, India proposed conducting research in the entire Bay of Bengal – "the open Bay of Bengal" as the draft said, but Bangladesh did not agree to it.

Bangladesh decided to drop the term "open Bay of Bengal" and, in addition, included "any area within the Indian Ocean mutually agreed by the two parties" in the draft instead of "Indian Ocean" as the geographical area of investigation.


Bangladesh agrees to joint research only in those areas of both oceans that the two countries will agree upon.

The draft also says data and samples collected during the research can be exchanged between the two countries but cannot be handed over to a third party and cannot be used for commercial purposes. Any unutilised samples have to be sent back to the coordinators identified in the agreement.

Both parties shall take all measures to protect the secrecy of and avoid disclosure and unauthorised use of the information which is confidential as agreed by both parties and outside the public domain.

The exchange of biological materials, if any, shall be governed by the applicable provisions of the Indian Biodiversity Act 2002 and Bangladesh Biodiversity Act 2017 or equivalent legislative provisions of the respective countries, the draft MoU said.

The two countries will jointly bear the cost of the research and if any publication or document is created as a result of the research, it will be owned by the two countries.

Officials of Bangladesh Oceanographic Research Institute said the institute was established in 2018 for the purpose of oceanographic research, application of research findings and related work.

The BORI Act 2015 allows the signing of MoUs between various domestic and foreign institutions and universities to boost cooperation in oceanography.

After the establishment of the Bangladesh Oceanographic Research Institute, four Bangladeshi scientists and officials visited NIO in Goa, India, and the National Institute of Ocean Technology in Chennai.

Later, the Director of NIO proposed a Memorandum of Understanding with the Bangladesh Oceanographic Research Institute and sent a draft to that end.

Bangladesh finalised the draft and sent it to India in September 2019. In November of that year, the Indian High Commission in Dhaka changed the draft MoU and added some sub-articles before handing it back to the Bangladesh government.

A technical committee of the government reviewed the draft sent by India and decided that the inputs incorporated in the latest draft sent by India were inconsistent with the capacity and experience of Bangladesh Oceanographic Research Institute as a new institution. The committee agreed to proceed with the previous draft finalised in September 2019.

The draft finalised in 2019 was once again sent to India through the Ministry of Foreign Affairs. Later the Indian side agreed to it with some comments.

The Ministry of Science and Technology has sent the draft to the Ministry of Finance, seeking the opinion of the Finance Division on this matter.

 

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