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Updated: Jun 07, 2015 07:37 IST

India and Bangladesh on Saturday formalised a land boundary agreement after 41 years and pledged zero tolerance against terrorism on the first day of Prime Minister Narendra Modi’s visit marked by a bonhomie the Indian leader described as “a wonderful feeling of visiting a close neighbour”.

Modi sweetened the deal for the eastern neighbour with a slew of economic pacts and a $2-billion line of credit before bonding with his Bangladesh counterpart Sheikh Hasina over some khaman dhokla and veg Hyderabadi biryani at a state banquet.

The historic boundary pact between the two countries will not only demarcate the international border clearly but also allow 52,000 people living in border enclaves to choose their nationality after decades of being stateless.

History is made as the Instruments of Ratification of the Land Boundary Agreement are exchanged. pic.twitter.com/HHeBhK3prs — PMO India (@PMOIndia) June 6, 2015

Earlier, Hasina broke protocol to personally welcome Modi to a rousing reception at the airport. Modi described the presence of West Bengal chief minister Mamata Banerjee in Dhaka as a privilege and an opportunity to give India-Bangladesh relations a familial touch.

Though the Teesta water pact was off the table during the visit, the two sides exchanged instruments of ratification of the 1974 Land Boundary Agreement and its 2011 protocol in Banerjee's presence.

Modi told Hasina that the consensus in Parliament over the land boundary pact was reminiscent of the support for Bangladesh’s liberation struggle. “We have shown political resolve and mutual goodwill with the agreement," he said. “I am confident that with the support of state governments in India, we can reach a fair solution on the Teesta and Feni rivers. We should also work together to renew and clean our rivers.”

Sources said Modi told Hasina he did not know Bengal had such a vast variety of sweets until the pact was cleared by Parliament. Hasina said she would be happy to send his favourite Bengali sweets should he name all of them to her. The banquet hosted for Modi featured the subcontinent's choicest vegetarian delicacies.

That the theme of a shared heritage and culture would play out during the visit became apparent right at the beginning when the ceremonial reception saw the rendition of two national anthems penned by the same person, Rabindranath Tagore. Modi told Hasina that her father and Bangladesh founder Sheikh Mujibur Rahman's name was the most frequently referred to in India's parliament.

Later, he visited the Savar National Memorial Monument dedicated to those who died in the 1971 war of liberation and the Bangabandhu Memorial Museum, dedicated to Sheikh Mujibur Rahman. Sheikh Hasina is the eldest of Rahman’s five children.

The two sides agreed to step up security ties, with Hasina saying both governments reiterated their commitment to a “zero-tolerance” policy on extremism.

Foreign secretary S Jaishankar noted that Dhaka’s “steadfast support” to containing anti-India activities had helped the relationship grow manifold. Pacts signed between both sides on prevention of human trafficking, smuggling and circulation of fake currency notes would further boost security cooperation, he said.

The two sides also concluded agreements for building power plants to produce 4,600 Mw of electricity and help Bangladesh overcome an energy crisis.

Reliance Power signed a deal with the state-run Bangladesh Power Development Board to develop four plants to produce 3,000 Mw of electricity at a cost of $3 billion. Adani Power will set up two coal-fired plants with a total capacity of 1,600 Mw that will cost more than $1.5 billion.

Modi said he was keen to address the trade imbalance between both countries. Of the $6.5 billion in bilateral trade, Bangladesh's exports to India account for just $500 million.

On Sunday, Modi will visit Dhakeshwari Temple, Ramakrishna Mission and the new Indian chancery complex.

Modi will also receive from President Abdul Hamid the Friends of Bangladesh Liberation War Award bestowed on former prime minister Atal Bihari Vajpayee for his role in the 1971 war. Modi will then attend a lunch hosted by Hamid.

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