India-Bangladesh Economic Ties Boosted by Sheikh Hasina Visit

Posted by Reading Time: 5 minutes
By Bradley Dunseith

Bangladesh Prime Minister Sheikh Hasina was on a four day visit to India from April 7 to April 10; her first bilateral visit in seven years. Bangladesh goes to elections next year and market watchers expect stronger bilateral economic and strategic engagement in the meantime.

Investments in building trade and connectivity with Bangladesh holds many objectives. It is highly beneficial to the development of India’s northeast states and serves India’s foreign policy goal of balancing China’s presence in the region. 

Professional Service_CB icons_2015RELATED: Pre-Investment, Market Entry Strategy Advisory

Sphere of Indian influence

India is investing an approximate US$9 billion into Bangladesh, securing a strong economic and political partner while showcasing the country’s ability to lend assistance.

The two countries signed 22 agreements in various areas that saw the participation of both private and public sectors in India – in defense cooperation, hydrocarbon sector, civil nuclear cooperation, cyber security, power cooperation, skill development, and developmental cooperation, among others. India is avidly trying to maintain its sphere of influence from an encroaching China who, last year, promised Bangladesh US$20 billion in investments.

The promised investments will also increase India’s presence in Bangladesh’s energy sector and foster stronger connectivity between the two countries – adding to greater business and development opportunities in India’s northeastern states.

Professional Service_CB icons_2015 RELATED: Business Strategy & Operation Advisory

India Bangladesh MoUs

Over the course of Hasina’s visit to India, the two countries signed a total of 16 Memorandums of Agreement (MoUs) and six other agreements.

The pacts focus on the following areas of cooperation:


  • India has extended Bangladesh US$4.5 billion in credit for the development of infrastructure, and 17 infrastructure projects have already been identified by Delhi and Dhaka;
  • India has committed to financing a diesel pipeline from Numaligarh (Assam state, India) to Parbatipur (Bangladesh).


  • India and Bangladesh have agreed to develop an inland waterway from Sirajganj (Bangladesh) to Daikhowa (India) and Ashuganj (Bangladesh) to Zakiganj (Bangladesh) on the Indo-Bangladesh river protocol route;
  • India and Bangladesh will establish train and bus links between West Bengal’s capital Kolkata and Dhaka via Khulna (Bangladesh);
  • India and Bangladesh will establish a goods train between Kolkata and Khulna via Petrapole (India) and Benapole (Bangladesh);
  • India and Bangladesh agree to ‘border markets’ (haats) on the Indo-Bangladesh border.


  • India has committed to a US$500 million credit for Dhaka’s defense procurement;
  • MoUs have been signed between Defense Colleges in India and Bangladesh to enhance cooperation on strategic, defense, and operational studies;
  • Pact on Defense Cooperation Framework between India and Bangladesh.

Joint cooperation

India and Bangladesh agree to enhance cooperation on:

  • Peaceful uses of outer space;
  • Nuclear safety;
  • Information technology and electronics;
  • Aides (i.e. lighthouses) to sea navigation;
  • Earth science and development;
  • Passenger and cruise services;
  • Mass media and audiovisual development;
  • Cyber security.

Related Link Icon-IB RELATED: Import and Export Licensing Procedures in India

Where will these developments be felt?

The most important outcome of Hasina’s visit is India’s offer of US$4.5 billion for various infrastructure and development projects, which also marks the largest single line of credit India has ever extended to another country. India is strengthening its commitments to Bangladesh while attempting to reassert its role as a frontier power in South Asia in the backdrop of China’s increasing reach.

Stronger regional connectivity and infrastructure growth will encourage the flow of more people, resources, and goods between the two countries, and is sure to have a positive impact on the Indian states that border with Bangladesh.

The diesel pipeline going from Numaligarh in Assam state to Parbatipur in Bangladesh, for instance, will help develop a promising yet underdeveloped region. Assam is one of the ‘seven sister states’ that makes up northeast India – a small yet resource rich region. The northeast acts as India’s ‘gateway’ to the ASEAN states, and India is already working to increase the region’s connectivity with these states through Thailand and Myanmar.

Further links to Bangladesh will help establish the northeast region as an economic hub, providing channels for the development of its many untapped resources. The agreement to build a navigable inland waterway (fairway) on the Ashuganj-Zakiganj stretch of the Kushiyara river and the Sirajganj-Daikhawa stretch of the Jamuna river on the India Bangladesh protocol route will reduce the logistics cost of cargo movement to northeast India. This in turn will lessen the present congestion along the Siliguri ‘Chicken Neck’ corridor that connects Bhutan, Nepal, Bangladesh, Sikkim, Darjeeling hills, northeast India, and the rest of India.

Stronger relations between the two countries also means increased stability across borders and more commercial movement on India’s trade routes with Bangladesh. Watch the northeast states of India as well as frontier cities in West Bengal as commercial activity and new opportunities for regional trade continue to improve.


About Us 

India Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEAN, China, Indonesia, Russia, the Silk Road, & Vietnam. For editorial matters please contact us here and for a complimentary subscription to our products, please click here.
Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout India and the Asian region. We maintain offices in Delhi and Mumbai and throughout China, South-East Asia, India, and Russia. For assistance with India investment issues or into Asia overall, please contact us at or visit us at


Related Reading-IB

dsa brochure

Dezan Shira & Associates Brochure

Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.

 An Introduction to Doing Business in India 2017

An Introduction to Doing Business in India 2017 is designed to introduce the fundamentals of investing in India. As such, this comprehensive guide is ideal not only for businesses looking to enter the Indian market, but also for companies who already have a presence here and want to stay up-to-date with the most recent and relevant policy changes.

Working as an Expat in IndiaWorking as an Expat in India
In this issue of India Briefing Magazine, we look at India’s living and working environment, HR and payroll laws, and the taxation norms as applicable to foreign nationals. India is the second most favored destination for expatriates that want to work in the emerging markets. Expatriates should take note of the basic social and welfare concerns as well as the regulatory and tax issues that apply to foreigners that work in the country.