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Bangladesh’s Trade Via India’s Vizag Port Enhances Sub-Regional Multilateralism: Experts

© Photo : Social MediaVizag Port
Vizag Port - Sputnik India, 1920, 11.07.2024
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Bangladesh faces congestion at the port of Chittagong and lacks sufficient airport capacity in Dhaka to manage its growing $40 billion garment exports. That has prompting a search for alternative sites to optimize business operations cost-effectively.
Bangladesh is considering the port of Vizag as a hub for its trade with Sri Lanka.
Successful negotiations between India's Ministry of Ports, Shipping, and Waterways and Bangladesh could significantly boost trade through ports along the east coast of the Bay of Bengal.

"India and Bangladesh have entered into a bilateral Coastal Shipping Agreement, which permits Bangladesh to utilize Indian ports for their international trade," Dr. Prabir De, Professor at Research and Information System for Developing Countries (RIS) told Sputnik India.

This agreement, according to De, is particularly beneficial as the Bangladeshi port of Chittagong is congested, and the Dhaka's airport lacks sufficient capacity to handle the expanding $40 billion annual garment exports. Therefore, Bangladesh "is exploring alternative sites to streamline their business cost-effectively", while new docks are still under development, the expert noted.
He highlighted that Bangladesh is also using Delhi's Airport to export goods, including garments shipped globally via international carriers.

Bangladesh's Infrastructure Challenges and Strategic Export Routes

When Bangladesh utilizes ports like Vizag, which serves as a crucial hub for the country's global exports, Chennai, or Tuticorin, it leverages international shipping routes to export goods globally, not just to Sri Lanka, De said.

The expert pointed out that India utilizes ports like Chittagong and Mongla for transporting goods to its northeastern regions under a reciprocal arrangement with Bangladesh.

Meanwhile, Bangladesh's trade with Sri Lanka has soared by 12.9%, from $14 million in 2016 to $29.1 million in 2022, marking a notable increase in bilateral engagement, Dr. Sreeradha Datta, Professor at O.P Jindal Global University and non-resident senior fellow at the Institute of South Asian Studies told Sputnik India.
She noted that during Sri Lanka's economic crisis, Bangladesh also extended "substantial support, amounting to approximately $200 million, which underscores a broader trend of enhanced bilateral trade and economic activities."
Within South Asia, there is a "burgeoning trend of bilateral engagements and growing economies, fostering a significant regional trade cooperation," Datta said.
The academic said that the regional cooperative framework emphasises the strategic use of transport infrastructures.

For instance, Bangladesh's development of the Matarbari port exemplifies this trend, with India expected to heavily utilize it for cargo transport, enhancing connectivity including road links to the Tripura region, she added.

Datta also highlighted that discussions are underway about potential free trade agreements (FTAs) between Bangladesh and Sri Lanka, "reflecting evolving economic strategies."

Vizag Port's Role in Evolving Sub-Regional Multilateralism in SA

Historically, Bangladesh has maintained "close ties with global powers like China and the US, yet intra-regional trade among South Asian countries has been limited," Datta noted.

However, she underlined that this trend is now shifting, evident in Bangladesh's initiatives to procure energy from Nepal via India, with plans to extend this cooperation to Bhutan.

This evolving sub-regional multilateralism indicates that ports such as Vizag will play a crucial role, leveraging regional geography to facilitate these strategic exchanges, she said.
In turn, De noted that Visakhapatnam boasts multiple terminals including container and bulk terminals operated by logistics firms like JM Baxi.
This infrastructure aid seamless cargo handling from local delivery at Vizag to international shipments worldwide.
India and Bangladesh are partners under a bilateral coastal shipping agreement, facilitating mutual access to each other's ports for internal and overseas trade and underscoring their collaborative maritime relations, he concluded.
Passengers wave from inside a bus on a trial run from Gauhati to Dhaka in Bangladesh, in Gauhati, India - Sputnik India, 1920, 08.06.2024
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