13 September 2022, NIICE Commentary 8258
Avinav Singh Khatri

During a courtesy call on her at her official residence, Gono Bhaban, on 5 August 2022, Prime Minister Sheikh Hasina reaffirmed that Nepal could benefit from using Bangladesh’s Mongla and Chattogram seaports. The delegation was led by Pabitra Niruola Kharel, Chairperson of the House of Representatives International Relations Committee. Both parties underlined their desire to solidify further bilateral ties in commerce and economics for the advantage of both nations during the discussion. Sheikh Hasina thanked Nepal’s leadership and people for assisting Bangladesh during the Liberation War in 1971 and stated that her administration highly values preserving good ties with all of its neighbors, especially Nepal.

Evolution of Nepal-Bangladesh Ties

Ties between Nepal and the Bangladesh was formed on 8 April 1972, making Nepal the seventh nation to recognize Bangladesh. Bangladesh and Nepal, two South Asian nations with distinct social structures, ecological circumstances, and historical and cultural legacies, are thought to be progressing amicably in their bilateral ties. In July 2012, in Dhaka, a bilateral agreement on developing a Foreign Office Consultations framework at the Foreign Secretary level was inked. The framework assesses every aspect of bilateral ties between the two nations. In October 2017, Dhaka hosted the second round of discussions.

Geographically, the distance between the international borders of both the countries is merely 27 kilometers. The two nations’ relationships have improved due to high level exchanges at different levels. The President of Bangladesh, Md. Abdul Hamid, made a formal goodwill visit to Nepal from November 12 to November 15 at the Rt. Hon. Bidya Devi Bhandari’s invite. At the request of Dr. A. K. Abdul Momen, MP, the Bangladeshi Minister of Foreign Affairs, Pradeep Kumar Gyawali, Minister Foreign Affairs, went on an official trip to Bangladesh on February 17–19, 2020. During the visit, the two Ministers conducted an official bilateral meeting where they discussed several issues of mutual interest, including improving transit infrastructure, promoting investment, and expanding bilateral cooperation.

Prospects of Stronger Cooperation

Since the established of diplomatic times, the relations of both the countries have progressed by leaps and bounds. Their relationships, however, stretch back far further than this official marker. Furthermore, the rising collaboration in commerce, tourism, energy, culture, and education further solidifies the two countries’ bilateral relationship. After the Kakarvitta-Phulbari-Banglabandha transit route was opened in 1997, Nepal and Bangladesh started engaging in formal trade. In order to facilitate and reduce the cost of bilateral commerce, Bangladesh encouraged Nepal to use the infrastructures at the Mongla Port for its third-country trade in addition to rail transit via Rohanpur. To increase bilateral commerce and investments, the two nations formed the Joint Economic Commission (JEC) in 1978 at the level of the finance ministries. Sectors involved in joint ventures, such as banking, finance, and insurance, are the focus of collaboration. New initiatives are being launched in the areas of leather products, PVC pipes, medicines, and ready-to-wear clothing.

Cooperation for Prosperity

It is clear that in the backdrop of a rapidly evolving global structure, it is necessary to take more innovative and ambitious actions to safeguard and advance the interests of smaller economies and maximize shared interests. As a result, Nepal and Bangladesh have been teaming up on issues of shared concern, such as climate change, sustainable development, multilateral trade, and public health. They have similar viewpoints on the multitude of regional organizations like SAARC, BIMSTEC, and BBIN, as well as international fora like the UN and WTO. Bangladesh-Nepal relation has flourished at a great pace and expanded their scope of multilateral cooperation.

Given Bangladesh’s massive energy needs to support its expanding industries, energy will be essential to fortifying ties in the coming years. Given that Nepal has the capacity to produce 43,000 MW, compared to Bangladesh’s projected need of 35,000 MW by 2035, Bangladesh might finance Nepal’s hydropower industry and buy excess electricity from it. To purchase 10,000 MW from Nepal, Dhaka has already developed a strategic energy plan. The Indian Ministry of Energy was contacted by the Bangladesh Power Development Board last year to obtain approval for Bangladesh to receive 450 MW of hydropower from Nepal. India has responded favorably to the plan, and the trans-border trading in energy may eventually start. Through it, Nepal could become a net energy exporter in South Asia, which will aid in lowering its massive trade deficit with Bangladesh and enhancing its foreign exchange reserves. By meeting the energy needs of its businesses, Bangladesh may, nonetheless, strengthen its economy.

Bangladesh ranks among the primary focuses for Nepali students looking to pursue higher education, particularly in the medical and technical areas. Approximately 6000 Nepali students are now studying in Bangladesh. Expanding collaboration in this field will be aided by supervising service providers to ensure excellent education and the necessary assistance for the students.

Bangladesh and Nepal are well-known tourist destinations with much room for growth. The advancement of this business will undoubtedly benefit from cooperative efforts on both sides.

Collaboration among the sub-regions has possibilities. If interrelationship is encouraged in all spheres and interconnection is cultivated to guarantee fair benefit distribution to all component nations, it can be advantageous for the participating countries. It will also secure a more significant payoff concerning regional peace and stability.

Conclusion

Even though there is enough room for growth, the amount of economic and bilateral cooperation is relatively modest. For both nations to benefit from healthy economic relations, both nations must take proactive steps in this direction. The promotion of complementarity, the abolition of tax and quasi-customs duties, the adoption of facilitative policies, the construction of necessary infrastructure, the expansion of connectivity, and the encouragement of investment in productive sectors are a few ways to achieve this. Being so susceptible, dealing with the adverse effects of climate change is a top priority for both nations. In addition, frequent environmental disasters like floods and droughts harm our populations and their way of life.

Nepal and Bangladesh’s bilateral relations have been growing ever since. Nevertheless, both countries must take India into their confidence due to their geographical positioning. All the trade and connectivity links between these countries happen through India, so without India’s favor, connectivity links and trade cannot further flourish. The Indian government must, however, have a positive and encouraging aim in the framework of trade and public transportation between Nepal and Bangladesh. Because of our shared cultural heritage, shared religious beliefs, and geographical ties, Nepal and Bangladesh must maintain cordial ties with India. In order to strengthen economic connections and maintain India in both nations’ good faith, it is essential to have trilateral relations. In order to advance the two countries’ ties and forge a solid link, the leaders reaffirms their determination to work together to solidify other cordial relations and cooperation in trade, investment, connectivity, energy transmission, and tourism. As a result, there is significant reason to believe that the bilateral partnership between Nepal and Bangladesh will continue to strengthen and intensify in the foreseeable future.

Avinav Singh Khatri is a Research Intern at NIICE.