India-Japan-Bangladesh Trilateral Meeting in Tripura today

According to India-based news outlets, Asian Confluence, a think tank from Northeast India, is organizing the meeting in cooperation with the Indian Ministry of Foreign Affairs.

Bangladesh Foreign Minister Md Shahriar Alam is expected to attend the event to represent Bangladesh. The Deputy Foreign Minister of India and the Japanese Ambassador to India will also participate in the program.

A recent study suggests that both Northeast India and Bangladesh need to expand their multimodal connectivity, which would not only help the region increase its competitiveness but also reduce the development gaps in the region.

In parallel, both companies should work together to create synergies in trade facilitation and build express corridors for handling and transiting goods from the Northeast region to Bangladesh’s Chattogram Port, the study added.

The study also suggested building industrial value chains to create a win-win situation for all stakeholders in India and Bangladesh and Japanese companies in the region. It has also been proposed to create the Japan-Northeast India Chamber of Commerce to encourage Japanese investment in NE India, as well as a NE-Bangladesh-Japan CEO Forum so that it can provide the necessary corporate governance.

The Northeast Bangladesh Economic Corridor can add a significant geoeconomic component to regional geopolitics. Japan’s involvement in creating an industrial value chain between Northeast India and Bangladesh and connecting the Northeastern Region (NER) with the Bay of Bengal could well yield significant outcomes on the regional geopolitical front towards China.

Depending on the involvement of the three countries, there is a possibility that the initiative will create a thriving and sustainable economic corridor between NER and Bangladesh (let’s call it NBEC) that will spark mutual interest in attracting private investment by harnessing natural benefits.

“We regard Bangladesh and other southern areas as a single economic zone and will promote the concept of industrial value chain in the Bay of Bengal and Northeast India in cooperation with India and Bangladesh to promote the growth of the entire region,” said Japanese Prime Minister Kishida Fumio said during his recent visit to Delhi.

The proposal is part of the ongoing India-Japan collaboration to build a “Free and Open Indo-Pacific (FOIP)” and a follow-up to the discussion that took place at the 2022 Japan-India Summit.

“The Prime Ministers reaffirmed the importance of collaborative projects… in the Indo-Pacific region. They commended progress on ongoing projects in Bangladesh… They appreciated the importance of their continued cooperation through the Act East Forum (AEF) for the sustainable economic development of the north-eastern region of India and for enhancing the region’s connection with Southeast Asia,” the 2022 joint explanation said.

The Economic Corridor

The initiative is a win-win situation for both countries. From less than US$3.5 billion in 2010, India-Bangladesh trade reached almost US$16 billion in 2021. Trade logistics have improved and more projects are being implemented. But the regional added value suffered as a result. lack of complementarity; traditional weaknesses of the frontier economies of West Bengal and the Northeast Region (NER) of India; and the political-economic realities in Bangladesh were three main reasons for this failure.

While West Bengal remains an economic backwater of India and does not show much intention to capitalize on the opportunity, NER’s dramatic improvement in infrastructure and investment readiness over the past decade has opened up new opportunities.

Add to that the opening of the Padma Bridge in fast-growing Bangladesh – ensuring easy connectivity between the northern and southern parts of the country – and the removal of two major structural hurdles in creating a cross-border value chain.

This brings us to Bangladesh’s political-economic realities, which have tilted in favor of China. Given its good will in Bangladesh, Tokyo can act as a neutralizing factor and create new opportunities for both economies.

The Far East Asian nation is building a deep sea port at Matarbari in Cox’s Bazar, Bangladesh. The project near the Sabroom border in Tripura, India, is scheduled for completion in 2026.

A deep sea port is expensive. As East India has several such facilities, access to NER can improve Matarbari’s profitability. Similarly, full port access will enhance North East India’s attractiveness to the investment community.

In 2018, Bangladesh granted NER access to Chattogram Port, but only for the movement of goods to the rest of India. The port is in the same area as Matarbari and is just under 80 km from the Sabroom border in Tripura.

What makes the Japanese proposal great is that India and Bangladesh are already building the necessary transportation infrastructure linking Tripura and NER to the Port of Chattogram. The Indian side of the project – including a state-of-the-art freight and passenger terminal connected by both rail and road at Sabroom – is in an advanced stage of completion and will be ready in 2023. The associated infrastructure is under construction in Bangladesh, but with a delay.

Given the dramatic improvement in rail and highway links between NER and the rest of India over the past decade, limited access to the Port of Chattogram hardly justified the huge investment in nationwide connectivity. Full port access via Matarbari will solve this problem.

huge chance

The Northeast has changed dramatically over the past nine years. More will change. Huge investments in infrastructure and the energy sector are transforming it into a low-cost, modern economy.

The region now has access to low-cost transport options for both domestic and cross-regional goods traffic. Guwahati developed into a regional logistics center and thus broke the dependency of distant states such as Tripura on Calcutta.

From power deficit, NER will be power surplus by June this year as the 2000MW Subansiri (Lower) project gradually comes online. In the next few years it will be a hub for hydroelectric power generation.

The completion of the Paradip (Odisha)-Numaligarh (Assam) crude oil pipeline, the operationalization of the nine million tonnes per year (mtpa) Numaligarh Refinery (NRL) and the implementation of the sprawling Indradhanush gas network connecting all states in NER will be one Outlook on opening possibilities until 2024.

First, NER will have a huge exportable surplus of petroleum products, including diesel and cooking gas (LPG), imported by neighboring economies. Secondly, the refiners in landlocked Northeast India will certainly be looking for a market in the immediate vicinity.

The case for the regional value chain will be stronger over the next four to five years as a significant portion of the 15 mtpa refining capacity in NER is converted to petrochemicals. Ideally, it opens up investment opportunities in downstream units in the neighborhood.

A start has been made with the recently inaugurated India-Bangladesh diesel pipeline, which will replace one-fifth of Dhaka’s seaborne fuel imports and meet all of northern Bangladesh’s fuel needs.

Pipeline transportation eliminates an average 30-day time lag from the Middle East to the point of consumption in Bangladesh, the associated capital bloc and associated foreign exchange fluctuation risks.

Geoeconomics and Geostrategy

India and Japan founded the Act East Forum in 2017. Since then, the two countries have engaged in a dialogue for sustainable growth of NER and connectivity in the region.

Delhi and Tokyo were also in dialogue on possible NER-Southeast Asia connectivity projects through Myanmar. A successful implementation of NBEC will therefore be important to demonstrate the benefits of this collaboration.

The ultimate winner will be the regional peace and security that has been the cornerstone of India-Japan relations for the past decade.

Much has been written about “why Japan needs India as a security provider” in the face of increasing military threats from China. The first three pages of the seven-page joint statement released last year were devoted to strategic issues.

Although China is not directly mentioned, the need to ensure a “code of conduct” in the South China Sea, the need for a “rules-based order” that respects sovereignty and territorial integrity, and protection against “attempts to unilaterally alter the status quo” is emphasized. , leaves very little to the imagination.

Japan and South Korea have already advised their industries to shift out of China. There are also active discussions within the framework of QUAD (Quadrilateral Security Dialogue) to secure the supply chain in critical areas.

The collaboration could therefore prove to be a unique opportunity for both Northeast India and Bangladesh to attract part of the relocated supply chain.