India interested in railway projects and road transportation and maintenance

India has offered a new line of credit for $5 billion, its biggest yet in the neighbourhood, to Bangladesh. The announcement is expected during Prime Minister Sheikh Hasina’s visit to Delhi next week, her economic adviser, Mashiur Rahman, said here on Thursday.

Mr. Rahman said the credit would be open-ended and would follow the $1 billion offered in 2010, when Ms. Hasina previously visited Delhi, and the $2 billion in 2015 during Prime Minister Narendra Modi’s visit to Dhaka.

Open LoC

“The $5 billion is an open LoC; we can use it to enhance the level of trade, movement, connectivity. The projects are yet to be fully identified, and there is no time line. We can spend it all at once, or as we need it. But where the Indian side has an interest is in connectivity: railway projects, road transportation, road maintenance,” Mr. Rahman said.

A senior Indian official said lines of credit were part of India’s “well-thought-out” strategy to “give Bangladesh smaller sums it can absorb” and building capacity.

The two sides are expected to announce a slew of agreements including one for the reconstruction of a seventh India-Bangladesh railway line between Agartala and Akhaura, a ₹1,000-crore project, for which Railway Minister Suresh Prabhu laid the foundation stone in August 2016.

The 15-km line from Bangladesh to Tripura is significant as it is part of India’s larger strategy of assisting Bangladesh’s infrastructure while using it to transit to the “north-eastern” States.

The line is expected to shorten rail routes by as much as 1,000 km once completed.

“In principle, we will be able to send trains from our western border with Bangladesh through to the eastern side, but in practice, we will have to wait until they standardise their track sizes as some are still on broad gauge and some on metre gauge,” the official said.

Ferry services

Ferry services connecting Assam, Bangladesh and West Bengal and permissions for running cruise liners between the two countries, along with several road projects, are expected to be among more than 40 agreements to be announced when Ms. Hasina meets Mr. Modi on April 8. Also included are power projects and a civil nuclear cooperation agreement, diplomats privy to the negotiations said.

Officials said the next part of the plan is to link Bangladesh to other neighbourhood countries. While the plan under the Bangladesh-Bhutan-India-Nepal initiative has hit a roadblock over the Bhutanese Parliament’s refusal to ratify the network, officials are understood to be working around it, to link Bangladesh, India and Nepal.

“When Prime Minister Manmohan Singh came here [in 2011], we had signed a framework for cooperation. The focus was on identifying projects that were mutually beneficial and bring in neighbours such as Bhutan and Nepal and increase the levels of cross-border investment. Because as you increase the investment, you can address the issues that people on both sides face, such as taxes, duties, transport problems,” Mr. Rahman said.

‘India a friend’

Bangladesh officials rejected comparisons of the plan for India’s $5 billion LoC in infrastructure with the recent announcement by Chinese President Xi Jinping of $24 billion in development aid, with $13 billion more in the private sector for Bangladesh, which joined China’s “Belt and Road initiative” in October 2016.

“India is a friend and neighbour, while all other countries including China are development partners,” Information Minister Hassanul Haq Inu said.

Mashiur Rahman, one of the key interlocutors, who visited India last year, said the difference between the loans from India and China was also cultural.

“The main difference is, in the case of China, the project is identified first and then the money comes in. With India, you get the promise of money first, and then they identify the projects,” he said adding that projects under the B&RI were new projects, while those with India consisted of restoring historical links.

(The reporter travelled to Dhaka as part of a media delegation hosted by the Bangladesh government ahead of Prime Minister Hasina's visit)