The three countries are expected to take advantage of major connectivity projects that will be completed in the next few years. Japan has been active in sponsoring infrastructure projects in both Bangladesh and the Northeast region of India.
New Delhi: India, Japan and Bangladesh are in discussion to coordinate connectivity efforts in Bangladesh and India's northeastern states to attract regional value chains and manufacturing to the region over the next five years. The plan of major strategic importance vis-a-vis China includes adjusting tariffs, boosting connectivity and joint investments especially from Japanese enterprises and bringing India closer to countries on the Mekong river system like Myanmar, Laos, Thailand . Cambodia and Vietnam.
According to sources familiar with the proposal, such joint collaboration aims to attract investment from existing manufacturing hubs in Southeast Asian countries such as Thailand to Bangladesh and India's northeastern states. Rising wages have forced manufacturers to look elsewhere for opportunities.
According to people with knowledge of the matter, preliminary discussions are underway for a joint approach. It is learned that the initial response from Bangladesh side has been positive while the matter is under consideration of the Government of India. The Ministry of External Affairs did not respond to a press query.
The three countries are expected to take advantage of major connectivity projects that will be completed in the next few years. Japan has been active in sponsoring infrastructure projects in both Bangladesh and the Northeast region of India. In the past, Tokyo has helped build the deepwater Matabari Port. Mint had earlier reported that the Japan International Cooperation Agency (JICA), which funded the construction of Matabari, hopes to help Indian companies establish a strong base in the Bay of Bengal region. Japan has also funded road connectivity projects in the northeastern provinces of India. These infrastructure building efforts by India and Bangladesh will help connect the region and attract attention and investment from the private sector.
Rather than viewing India's Northeast and other regional connectivity efforts in silos, this joint effort reflects a broader strategic vision to link India and Bangladesh economically to Southeast Asia and Japan. This happens against the backdrop of a strong Chinese effort to boost investment and infrastructure connectivity in India's neighbourhood. Beijing hopes to use trade and economics to expand its footprint and influence.
While infrastructure connectivity efforts continue, the three countries are looking to discuss a number of policy responses that would attract business to Bangladesh and India's northeast. It is proposed that New Delhi, Tokyo and Dhaka form a mechanism to discuss three major barriers to investment in the region: tariffs, customs procedures and connectivity.
India and Bangladesh are in the process of negotiating a Comprehensive Economic Partnership Agreement (CEPA) which is expected to boost bilateral trade. As per reports, Dhaka and Tokyo are also in talks to conclude an economic cooperation agreement that will boost trade and investment.
With infrastructure projects to be completed over a five- to ten-year horizon, the proposal for joint discussions on investment incentives, customs duties and tariffs will set the stage for an economic boom in India's Northeast.
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