The International Chamber of Commerce-Bangladesh (ICCB) has favoured that Bangladesh allows transit to India.

It says such facility, if implemented, will benefit both the countries. In its editorial of current News Bulletin released on Sunday, the Bangladesh chapter of International Chamber of Commerce, however, said the facility should be transhipment, instead of transit.
The media release, signed by ICC-B secretary general Ataur Rahman, said use of Bangladeshi transportations to carry Indian goods across the country would be more logical and beneficiary for Bangladesh and India.

Apparently, as the ICCB release said, the transit facilities will give more benefits to Indias seven states in the north-east as the distance and time for transportation of goods will be reduced to almost one-third and thus save huge costs. Indian producers will thus be able to sell their products in the region at a lesser price and consequently, Bangladeshi businesses will lose opportunities for expansion of trade to eastern India.

The media release also quoted a recent research finding by Centre for Policy Dialogue (CPD) that stated — Bangladesh could expect no more than US$ 2.3 billion in 30 years by giving transit to India. This is really a pittance compared to investment required to be made for infrastructure development within the territory of Bangladesh, said the ICCB release.

It also quoted a recent ADB estimates, which pointed out that Bangladesh might earn US$50 million per year from giving transit, while transhipment concept could be the best option for both Bangladesh and India.

The practice of transhipment has been in operation throughout the world ever since trade expanded beyond borders and as such, an agreement to this end will resolve the issue of long-awaited transit facilities being requested by India. Such a treaty compared to the proposed transit plan will generate enhanced economic activity of several dimensions including creation of employment and business opportunity as well as ensure security concern of Bangladesh. In the event of transit, such a huge economic benefit will be completely denied to Bangladesh, the ICCB release added.
The release also said in case of transit to India, it is unknown who will pay for the development of massive infrastructure of multi-billion dollar and its regular maintenance when Indian cargoes start rolling on them. In the proposed transit plan, Indian trucks would be allowed to crisscross the territory of Bangladesh; while Bangladeshi trucks would have to stop at Indian border. This is, in fact, an asymmetric connectivity plan.

India has sought transit facilities to its north-eastern states through road, railway routes and ports in Bangladesh. India also has opened up rail and surface routes for transit to link Nepal and Bhutan with Bangladesh. It is claimed that transit fees from Nepal and Bhutan would bring good revenue for Bangladesh. But Bhutans GDP is less than $2 billion and Nepals economy is not big either. Besides, their economies are inextricably integrated with Indian economy. It is unlikely that a significant volume of cargo from Nepal or Bhutan (to & from) would go through Bangladesh simply because they do not manufacture much exportable goods.

“Therefore, the concept of transit should be re-visited and Bangladesh should go for Transhipment Agreement to help India gain access to their seven north-eastern states,” the ICAB release suggested.