India’s neighbourhood first in practice

Economic Times, December 31, 2020

By Bipul Chatterjee and Prashant Sharma,

Major change is afoot in India’s Eastern Region that will improve the wellbeing of millions in Bangladesh, Bhutan, Nepal and India. This is centred on people-to-people connectivity and welfare. It includes transformation of border haats (local markets in border areas), improvement of border infrastructure development, and new transport links with our neighbouring countries, fostering greater economic and security.

These are building blocks for greater economic and commercial exchanges that help a combined population of around 1.65 billion, including around 45 million in India’s Northeast. It also helps in a resilient comeback from the Covid-19 pandemic.

These building blocks offer tremendous opportunities for creating synchronised zones of prosperity in the form of special economic zones, free trade and warehousing zones and special commercial areas.

For example, a recently concluded meeting of India-Nepal Inter-Governmental Committee on Trade, Transit and Cooperation indicates the need for such progressive steps for the two countries. With a continued focus on harmonisation of standards as well as synchronised development of trade infrastructure in border areas, the open border can become an attractive accelerator for cross-border economic and commercial activities.

As a whole, the BBIN plus Myanmar on the east and Sri Lanka and the Maldives in the south of India are well suited to catalyse action in view of their existing, expanding and diversifying trade and transport linkages. It can help supply chains integrate with production and distribution networks for the benefit of all these countries.

Raison d’être for the expanded cooperation

While ensuring a seamless vaccination programme to stem the spread of the Covid-19 pandemic, development of synchronised cross-border economic and commercial zones is ever more required for a more inclusive approach towards achieving food and nutritional security in India and its neighbourhood.

After all, these basic needs are to be looked at from a regional perspective – not just national – and India is in a position to provide leadership. One should learn from each other’s experience on the ground. Knowledge sharing is as important as trade and investment for people to understand the values that regional cooperation can bring to their lives.

Synchronised cross-border economic and commercial zones are also important for sustainable creation and distribution of jobs and livelihood opportunities, particularly for people in remote border areas. Such a policy response can even catalyse as well as synchronise entrepreneurial capabilities and connections between border, hinterland and mainland areas.

A brief explanation of the existing and emerging building blocks can help understand this raison d’être to achieve certain milestones.

For example, border haats between India and Bangladesh are proving to be a significant enabler for substantial yet equitable socio-economic gains. Initiatives for existing haats and efforts towards setting them up at other locations demonstrate that. The success of these haats has also influenced the decision to explore and establish a similar initiative along the India-Myanmar border.

Another immediate neighbour – Bhutan – is also experiencing the advancement of new and integrated inter-modal transport linkages between India and Bangladesh. The decision to grant Bhutan access to India’s Nagarkata and Agartala (overland) as well as Jogighopa and Pandu (inland waterway) custom stations for its bilateral and transit trade is a testimony to this fact.

As a transit country, prospects for developing India’s landscape of transport and logistics infrastructure and services are destined to get a substantial boost in view of the recently signed Bhutan-Bangladesh Preferential Trade Agreement.

Similarly, it is understood that benefits from early operationalisation of the Kaladan Multi-Modal Transit Transport Project between India and Myanmar can help ease ethnic and political tensions in border areas.

In short, India’s thrust for strengthening its border infrastructure is a significant effort not just in boosting national security but complementing existing ones while enabling substantial prospects for cross-border economic, development and security cooperation.

In that respect, India’s Border Roads Organisation is committed to develop border infrastructure for example in areas of Jammu & Kashmir, Ladakh and Arunachal Pradesh, among others. More than improving national security, robust border infrastructure can enable people in border areas connect with prosperous cities and vice-versa, facilitating sustainable trade and investment linkages.

Gains for people, private sector and national security

Synchronised cross-border economic and commercial activities can help attract investments needed for the people of those areas to enjoy a better access to jobs, healthcare and education. This necessity has been reiterated over and again including for stopping migration from border areas, supposedly in the interest of national security.

India should, therefore, transform its borders with friendlier nations in our immediate neighbourhood as a fulcrum for peace, security, stability and prosperity in the larger Bay of Bengal and Indo-Pacific region. It is also important for India’s Northeast and Eastern regions to stay economically and strategically competitive while increasing inter-modal transit transport and coastal shipping access through Bangladesh on the one hand and Sri Lanka on the other.

Cross-border economic and commercial formulations involve differential policies on investment, income and trade in a limited geographical area within national boundaries. They can re-calibrate an effective socio-economic recovery by making border regions attractive to both domestic and foreign investment, enable industrial development, and encourage trade and tourism, among others.

Also, their critical role in enhancing national security while unbridling prospects for greater cross border security cooperation by making border areas prosperous and thus people living there stick to border lands can be extremely beneficial.

A greater cross-border economic and commercial synchronisation can help India and its immediate neighbourhood enhance mutual confidence not just in the Bay of Bengal region but also the Indian Ocean region including Sri Lanka and the Maldives. In order to create new as well as optimise the usage of existing maritime and coastal infrastructure assets, these countries should explore the development of synchronised free trade and warehousing zones in coastal areas.

This will foster mutual cooperation in the area of sustainable development in accordance with the international legal framework for the governance of the oceans. As with people at borderlands, it is equally important to help coastal communities with food and nutritional security while governments and private sector with opportunities to develop coastal areas at par with prosperous hinterlands.

Such national as well as cross-border developments will not only help us to effectively make our societies and economies resilient to future shocks but are also necessary in our endeavour to achieve many of the United Nations designated Sustainable Development Goals by 2030, particularly those related to basic needs.

Bipul Chatterjee is the Executive Director and Prashant Sharma is the Assistant Director of CUTS International, a global public policy think- and action-tank on trade, regulations and governance


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