The Other Side Of The Story: How India Is Dependent On Bangladesh’s Taka

The Other Side Of The Story: How India Is Dependent On Bangladesh’s Taka

by Jaideep Mazumdar - Dec 10, 2018 03:48 PM +05:30 IST
The Other Side Of The Story: How India Is Dependent On Bangladesh’s TakaPrime Minister Narendra Modi with his Bangladesh counterpart Sheikh Hasina. (GettyImages)
  • Bangladesh is critical to the success of India’s ‘Act East’ policy and India has huge stakes in Bangladesh’s industry and infrastructure.

    So, the narrative needs to move much beyond the ‘illegal influx’ chapter and focus on the criticality of Bangladesh to India’s economy, trade and strategic interests.

The popular narrative among most Indians about Bangladesh is generally limited to the illegal entry of Bangladeshis into India and the demographic change they have brought about in states like Assam and Bangladesh. While this large scale illegal infiltration from Bangladesh and the illicit presence of millions of migrants from that country in India is a fact and justifiably inflames passions, what cannot also be ignored is India’s critical dependence on Bangladesh.

It may come as a surprise to many, but Bangladesh ranks fourth in the list of countries from where the highest remittances come to India! Incidentally, India is the world's top recipient of remittances with its diaspora sending back a whopping $80 billion to the country this year, of which Indians living in Bangladesh send back $10.173 billion. The Indian diasporas in the UAE send back $12.575 billion, $10.675 billion from the US and $10.225 billion from Saudi Arabia, while Bangladesh comes fourth in this list.

Bangladeshi visitors make for more than 15 per cent of foreign tourist arrivals in India; 28.03 per cent of foreigners who landed in Delhi airport last year, and 17.5 per cent of foreigners who landed in Mumbai, were citizens of Bangladesh. It is estimated that the 1.8 million Bangladeshi tourists who came to India last year spent at least Rs 2,000 crore in India. Of the 5.8 lakh foreigners who came to India for medical treatment in 2017-18, nearly 2 lakh were from Bangladesh and they spent about $350 million (Rs 2,450 crore) for their medical treatment in India.

Bilateral trade between India and Bangladesh has exceeded $9 billion (Rs 63,000 crore) this year, and the figures are heavily weighed in India’s favour with Bangladesh’s exports to India touching just $900 million (Rs 6,300 crore), or just 10 per cent of the total bilateral trade figure. That means India gains a huge lot more from its trade with Bangladesh than that country does. Many Indian companies, including the Tatas, Reliance, Adani Group, have invested heavily in Bangladesh and India has huge stakes in Bangladesh’s industry and economy.

Right now, there are 100 weekly flights between the two countries, and this is set for an exponential rise with Indian airlines companies eyeing the growing number of international travellers from Bangladesh (due to the rapidly improving economy of that country). The largest Indian visa centre is located at the Indian High Commission in Dhaka and this is evidence enough of the prime importance India attaches to facilitating visits to India by citizens of Bangladesh. Last year, India removed entry and exit restrictions for Bangladeshi passport holders in order to attract more Bangladeshi visitors to India.

It is well known that the retail trade and hospitality sector in Kolkata, as well as in Darjeeling, Shillong and some other places in India is critically dependent on Bangladeshi shoppers and tourists. A large part of central Kolkata has shops, restaurants, hotels, travel agents and other business establishments catering almost exclusively to visitors from Bangladesh. Bangladeshis make for almost 65 per cent of customers at Kolkata’s famous 144-year-old New Market, as well as other shopping complexes around, and account for up to 80 per cent of the business there. They purchase mostly garments, home appliances, furnishings and electrical as well as electronic goods. Trade bodies estimate that visitors from Bangladesh account for a substantial chunk of Kolkata’s economy and many of the big private hospitals in and around the city are critically dependent on patients from that country. Patients from Bangladesh account for about 20 per cent of those seeking medical treatment at private healthcare institutions in Vellore, Chennai and Bangalore.

With rising affluence in Bangladesh, an increasing number from that country are flocking to tourists spots in eastern and northeastern India like Darjeeling, Gangtok and Shillong. Students from Bangladesh account for about 40 per cent of pupils in boarding schools in Darjeeling, Kalimpong and Kurseong. Many establishments in Shillong’s popular shopping area of Police Bazar say that Bangladeshi tourists account for at least 25 per cent of their turnover. “Tourists for Bangladesh account for at least 20 per cent of our business and their numbers are increasing. Some of them are very big spenders,” said Shankar Agarwal, a hotelier in Shillong. On an average, about 15 per cent of the customers at the casinos in Gangtok are tourists from Bangladesh, but they bet big and account for at least a quarter of these establishments’ turnover.

Apart from the huge sums of money spent by Bangladeshi visitors to India, the huge trade imbalance in favour of India and the remittances from the Indian diaspora in Bangladesh, it also needs to be remembered that Bangladesh is critical to India’s strategic and other interests. The transit provided by Bangladesh has made it possible to transport goods from Kolkata to the landlocked northeast through Bangladesh. The cost of transportation to Northeast India has thus come down substantially. Transporting goods through the narrow Siliguri corridor costs more both in terms of time and money.

Bangladesh is also providing access to India through its territory to Myanmar and further to South East Asia. India is getting easy access to ports in Bangladesh which can handle big vessels which Kolkata and Haldia docks cannot. This makes imports and exports cheaper for India. Bangladesh and India have signed a number of protocols allowing use of each others’ territory for transit and that benefits not only the two countries, but also neighbouring ones like Nepal and Bhutan. Trade bodies estimate that the transit facilities allowed by Bangladesh to transport goods – and soon enough, even Indian passengers in vehicles, trains and ships – will result in annual savings of a whopping Rs 5,000 crore! The overflight facility that Bangladesh provides to Indian aircraft results in huge savings for all airlines.

Bangladesh is critical to the success of India’s ‘Act East’ policy and India has huge stakes in Bangladesh’s industry and infrastructure. Indian investments in Bangladesh are rising exponentially. New Delhi is keen to keep Dhaka happy in order to keep it from falling into the clutches of Beijing. India has also been strengthening its ties with the Bangladesh military, and the armies of the two countries have developed very close ties. Bangladesh, it also needs to be remembered, is moving towards becoming a ‘middle income economy’ and surpasses India on many development indices.

The narrative, thus, needs to move much beyond the ‘illegal influx’ chapter and focus on the criticality of Bangladesh to India’s economy, trade and strategic interests. As a former Indian high commissioner to Bangladesh put it succinctly, India and Bangladesh need each other, but India needs Bangladesh more.

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