The Pros and Cons of Granting Transit to India

Cover Story

Faysal Khan

StoryThe topsy-turvy Bangladesh-India relationship took a dramatic turn following Sheikh Hasina’s thumping victory in December 2008 general elections. Following her return to power Hasina visited India in January 2010 and issued a joint communiqué with her Indian counterpart Dr. Man Mohan Singh outlining the basis of future relationship between the two countries.
The 50 point Hasina-Man Mohan joint communiqué of 2010 that outlined the basis of future relationship between the two countries marked a dramatic shift in Bangladesh’s India policy, which however, was never raised in the parliament before or after Hasina endorsed the new strategy. Mention of policy shift was not even visible even in her election manifesto, when the country went to polls in December 2008.
Aspiring to get passage through Bangladesh for surface movement of its goods and transports and directly connect the troubled region of seven sisters and the state of Tripura with its mainland, India has been pursuing successive governments of this country since 1972 and now, finally, they are on the verge of actually getting it.
India’s decades-long persistence and pursuance have melted the hearts of the ruling elites this time around, though public opinion remains divided in this regard, to say the least.
Being very courageous and helpful towards India, the Bangladesh Prime Minister Sheikh Hasina went to the extent of signing three security related agreements with her nuclear neighbour to facilitate its effort to restore peace in the troubled north eastern regions.
Whether the electorates were informed or parliamentarians were consulted or the cabinet was taken into confidence – the fact remains that a transport corridor on Bangladesh soil is now facilitating passage of Indian goods through the country on the basis of that joint communiqué since March last. When Indians later pushed through the corridor facility free of cost for movement of Over Dimensional Cargo to Palatana Power Project, many among the policy makers even campaigned in their favor. ther policy shift include Bangladesh’s assistance to restore peace and normalcy in the troubled north eastern region engaged in a bloody independence movement since the British left the subcontinent in 1947.
Members of our ruling elite are so frenzied with their idea of allowing passage to India through Bangladesh that they now seem to have totally forgotten their own estimates of benefiting the country by millions and millions of dollars from transit fee.

As the ruling elite earlier claimed, the proposal to allow transit to India was aimed at reducing trade imbalance that over the decades lie in favour of India.
Giving figures and citing statistics they kept on talking about how Bangladesh was losing to the tune of millions and billions — which it could earn only from charges, fees and levies on the Indian transports — provided passage through Bangladesh was granted.
Taking a somersault the ruling elite are now making Bangladesh hostage under various international instruments that govern modern-day trade and are saying that no amount of fees can be charged or levied against passage of transit movement.
However, it hasn’t been smooth sailing and controversy prevails. Innumerable questions hover around the issue
The free transport corridor between Bangladesh and India became effective on March 29, 2011 as four trailers of equipment crossed the borders between the two countries traveling 48 km land route from Ashuganj river port in Bangladesh and reached Agartala in the north eastern region of India. The modality under which the corridor has been made operational has not yet been made public.
Whether Customs at Ashuganj river port or Akhaura border post are equipped with necessary logistic support to scan the huge loads of hardware being received and sent, also seems to have been kept confidential.
Soon after the signing of the November 30, 2010 MOU on transport corridor between Bangladesh and India, 16 diversion roads were built to facilitate heavy-duty trailers carrying equipment for Palatana Power Station in Tripura. These diversions were constructed to avoid 15 risky bridges and culverts between Ashuganj river port and Akhaura reports say (The Daily Star March 31, 2011).
According to latest report published on April 3, 2014 “ Bangladesh has agreed to provide India a ‘power corridor’ to help its neighbor link its north-eastern and north-western parts with electricity transmission lines spanning Bangladesh territory. The power lines will run from Rangia Raota, in Assam, to Borakpur, in Bihar, through Dinajpur’s Boro Pukuria, the power secretaries of the two countries told reporters after the seventh meeting of the Bangladesh-India joint steering committee on power cooperation.
According to another report published on The New age on June 13, 2014 “ Bangladesh is allowing India to ferry foodgrain to the landlocked north-eastern states using its territory and infrastructure in a highly significant move that was evidently cleared at the highest level

Geo-Strategic Location of Bangladesh
Bangladesh is extremely critical neighbor for India since its birth. India’s North East part is almost detached from mainland due to Bangladesh border in between. India has a tiny Shiliguri corridor to reach NE India. That region is underdeveloped. India wants to get a transit access through Bangladesh to go to North East region which is almost double in size than Bangladesh but it’s a matter of great debate in Bangladesh whether to give the access facility to India because Bangladesh is at risk of total Indian invasion since independence due to geo-strategic position. Some suspect India will invade Bangladesh through this access, some say India will make Bangladesh its 29th state by getting this transit in Bangladesh but AL govt. is determined to give the road transit and power corridor for development.

What India Wants
There are three forms of geographic cooperation in the movement of goods — transit, transshipment and corridor. Each form has a different significance. Which form is India and Bangladesh taking up in this regard? Transit means the interstate transportation of goods and passengers over a particular land or water route in accordance to specific agreement and regulations. While the term ‘transit’ is being used in the agreement between India and Bangladesh, its nature is more on the lines of corridor facilities. If Bangladeshi vehicular movement is held up during the movement of the transit vehicles, then this is certainly corridor-type facilities. Bangladesh is to grant India this facility, but it is not a landlocked country. Normally by corridor it is meant giving a certain country control over a certain part of the territory. While Bangladesh at the moment isn’t granting this control to India, India is being given unilateral use of the route. Again, as India is transporting the goods at its initiative, it cannot be called transshipment either.

Is Bangladesh Prepared?
The question is whether Bangladesh’s road and rail infrastructure is prepared for this. Everyday experience tells us about the present state of Bangladesh’s road infrastructure and how fit is it is to accommodate the country’s own transportation of goods and passengers. Under these circumstances, just what will the state of affairs be if hundreds of Indian vehicles start plying the existing roads?
According to various media reports, if transit is granted, about 1500 trucks of 15 tons each will ply the transit route. Added to that is the 750 Bangladeshi trucks presently using the possible transit routes. That means a total of 2,250 trucks will use the route every day, triple the present load.
About eight routes are being considered for transit. Other than the Banglabandha-Tamabil and Banglabandha-Akhaura routes, Dhaka is included in all the six remaining routes. How far are our roads in general, and Dhaka roads in particular, ready to take on this extra load of trucks? And when India uses the transit route, it will be plying extremely heavy container-carrying trucks, much heavier the average truck. These trucks will be unable to change lanes and when these massive vehicles will go down the road, all other vehicular traffic will have to be halted.
In an interview with the Daily Star published on June 5, 2012, Dr. M. Rahmatullah, senior visiting fellow of the Centre for Policy Dialogue (CPD) said that “We are still not ready for transit. Our first preference would be transit by railway. We have identified what needs to be done for rail connectivity with northeast India. There is one route through Kulaura-Shahbazpur of Bangladsh to Mohishashan-Karimganj of India. India has rail line on its part but we do not have 39 km rail link in operation. Re-commissioning of this route would take 2-3 years but no work on this has started yet. We need to construct a 10 km line from Akhaura to Agartala under Indian grants. No work has started for this yet. Jamuna Bridge will be another vital component. The bridge has its own load limitations and only a limited number of trains can pass through it. Its capacity has to be enhanced, for which we need a dedicated rail bridge. The Dhaka-Chittagong railway capacity has to be enhanced but the work for doubling the track is slow. We need to have two more bridges — one on the Meghna River and the other on Titas — under Indian credit. Progress is again very slow here. Tongi and Joydevpur points of the railway would be used for taking goods from northeast India to Indian mainland. This route is now single tracked, which needs to be enhanced. We need to build a direct line from Laksham to Dhaka to reduce distance between Dhaka and Chittagong. Rail track capacity between Dhaka and Narayanganj has to be increased too. So nothing is ready now.”

The Security Dilemma
Security is vitally interlinked with transit, transshipment or corridor, whichever Bangladesh is granting to its neighbour. The nature of the goods being transported must be scrutinized and monitored on a regular basis and security must also be provided for the safe transportation of the goods. Bangladesh lacks facilities for both types of these security measures in its existing road infrastructure. So the question naturally arises, when will this security setup be put in place and who will operate it? It is a vital question as to who will be in control of security and who will bear the costs involved.

The Environmental Cost of Transit
Bangladesh is a densely populated country already suffering from a myriad of environmental problems. Till now there hasn’t been any study as to what environmental harm will be caused by the transit provision. In the present global scenario, in Bangladesh as well, when any large project is taken up, first a study is carried out on the impact the project is likely to have on the environment. It is a mystery as to why this issue has been totally sidestepped in the matter of granting transit to India.
Another question that looms large in this respect is whether India will play any role in the rehabilitation of persons displaced by the transit route or pay any compensation for possible environmental harm brought about by transit. For example, Indian company ABC Construction has been awarded the contract to construct the road from Ashuganj via Akhaura to Agartala in India. This is for the transport of heavy machinery and goods known as ODC or Over Dimensional Consignment. In ABC Construction’s hurried initiative to expand the 49 km road, a nearby canal will be permanently filled and the area will face serious water-logging. (For details see PROBE News Magazine November 5-11, 2010).
There is even a proposal to take the railroad through the world heritage site of the Sundarbans, the world’s largest mangrove forest, to facilitate transit and the use to Mongla Port to carry India goods.
In is also a matter of concern as to whether the list of goods for transit will be kept open or whether it will be specified. The area which India is wanting transit is a virtual war zone. India has to regularly send arms, ammunition and weaponry to those areas rife with independence struggles of various ethnic groups. It should be settled whether this transit route will be used to transport such equipment. After all, this is likely to lead Bangladesh to become the target of ire of these ethnic groups.

Transit-Related Health Risks and Smuggling
From the European, Central Asian and particularly the African experiences, we note that transit bring along with it great health risks. If hundreds of vehicles travel from India through Bangladesh every day, certain health problems are bound to crop up. Top on the list is HIV/AIDS. India, according to official reports, had six million identified AIDS affected persons. This outnumbers AIDS patients anywhere else in the world. The main cause of concern is that the three regions of India with the highest prevalence of AIDS, Mizoram, Manipur and Nagaland, near the Bangladesh border. In fact, at one end of the transit route sought by India is these three states. To make matters worse, it is the truck drivers in India who are mostly the AIDS virus carriers and they are the ones who will be entering Bangladesh. The question is, are we at all aware of these serious risks? Has any precautionary action been taken whatsoever? Has Bangladesh any plan whatsoever of setting up the required facilities for the health check of the drivers using the transit route?
Again from the experience of Europe, Central Asia and Africa, we see an inevitable fallout of transit to be smuggling and illegal drug trade. As it is, our trade ties with India is infested with smuggling. There have been no statements so far as to how transit will exacerbate this situation and what preventive measures can be taken in this regard. As things stand at present, Bangladesh is facing the menace of phensidyl being smuggled over the border into the country and it is a serious challenger for the authorities to tackle this. Phensidyl has become such a serious business for the Indians now that all along their side of the Bangladesh border so far 132 Phensidyl factories have been identified. Though the Border Guard of Bangladesh (BGB) has approached the Indian Border Security Force (BSF) with these facts and figures, no measures have been taken to resolve the matter. In West Bengal alone there are 52 Phensidul factories. According to a study of Family Health International, India earns 347 crore rupees through smuggling drugs to Bangladesh alone (News Today, December 29, 2010). At least 32 different kinds of unlawful drugs enter Bangladesh from at least 512 points from India.
The existing scanning mechanisms which Bangladesh has at the moment for its road and railways, is totally inadequate to deal with this problem. Will more scanning mechanisms be installed if transit begins? Who will control these scanning setups? Where will they be installed? None of these questions have been answered so far. In fact, no separate authority has even been formed to look after the entire matter of transit.

Bangladesh Gripped In a Psychological War
Promises of sub-regional connectivity with dreams of earning millions, the passage through Bangladesh has now been reduced to a transport corridor with only one country and that too without any fee. Earlier stories publicized huge earnings to the exchequer from transit fee.
Soon after executing the free transport corridor for India, stories on prospects of getting huge energy from our neighbours seem to be receiving circulation. Is it another new twist of tremendous opportunity centering connectivity or yet another revelation of the transport corridor episode? Can it also be a part of a massive campaign of psychological onslaught against Bangladesh?
“India needs the help of Bangladesh to get the environment-friendly and cheap electricity, and Bangladesh should extend its hand for that,” said Dr. Mashiur Rahman economic advisor to the Prime Minister on March 31.
Customers of power produced in northeastern states will be in mainland India but it is not possible to send the electricity through the ‘chicken neck’.
Linking Bhutan and Nepal again like the previous regional connectivity issue the technocrat advisor said, “There are huge potentials of producing hydroelectricity in northeastern states of India, Nepal and Bhutan, and through regional cooperation Bangladesh can be a beneficiary to it.”
Dr. Rahman’s latest revelations testify the ‘significant implications’ of the transport corridor besides providing a new dimension to the psychological war that is tormenting the country.
The debate over transit and corridor issue in Bangladesh received a new twist when the Indians demanded that the passage through land route of the country should be provided for free under Article V of the WTO.
Shipping Minister Shahjahan Khan speaking in favour of fee waiver said, since Indians were constructing the road connection Bangladesh needed direly, why should they pay fee?
Dr. Mashiur Rahman technocrat advisor for economic affairs to the Prime Minister speaking in favour of the waiver of fee from Indian vehicle went to the extent of saying, “Had our country been an uncivilised one or our leaders been illiterate then we could have asked for the fees, but that’s not the case.”
He was speaking as the chief guest at the concluding session of the dialogue titled ‘Cooperative Development, Peace and Security to South Asia and Central Asia: Strengthening India-Bangladesh Relations’ in the city on March 31. Interpreting the WTO principles in own style he also said, “Transit facility should not be used for augmenting revenue rather to pass on the benefit to the customers.”
“It’s a non-starter if we think that by giving transit facility, Bangladesh is actually providing subsidy to Indian export,” he added.
Favouring withdrawal of fees earlier, Dr Rahman wrote a letter to the Shipping Minister to stop collecting fees from ships carrying Indian consignments of hardware for the Palatana power project.
Subscribing to the advisor’s views, National Board of Revenue (NBR), the concerned government agency, stopped collecting fees for Indian goods using passage through Bangladesh. The stoppage of fee collection was termed not ‘waiver’ but ‘suspended’ by the NBR.
The waiver introduced following Dr. Rahman’s letter will continue till “further decision”, according to newspaper reports. The text of the technocrat advisor’s letter to the Shipping Minister and the grounds of waiver on movement of Indian goods, however, have not yet been made public.
In an interview with The Daily Star he quoted a few lines from the definition of ‘transit’ given in UNCTAD Technical Note 8, avoiding some other crucial points from the same note.
Borrowing definition from the Technical Note, Dr. Rahman in his own style gave the definition of transit during his interview. We however are producing the same segment of as per the technical note: “In the WTO context, goods are defined to be in transit when the crossing of the territory of another WTO Member constitutes only part of the journey between departure and final destination country, whether or not transshipment, warehousing, breaking of bulk or change in transport mode are involved.”
What is important here are the next few lines, in which setting few conditions for transit it says, “GATT Article V therefore only refers to so-called through-transit, i.e. transit in the GATT context, normally involves at least three states. It should be noted that in the context of Customs transit regimes (see UNCTAD Technical Note on Customs Transit), other parts of a journey are also defined as constituting transit, notably inward transit (from a Customs office of entry to an inland Customs office), outward transit (from the inland Customs office to the Customs office of exit) and interior transit (from one inland Customs office to another in the same country).”
Trade facilitation negotiation that began in 2004, seeks improvement and clarification of Article V of the WTO along with Articles VIII and X. The process of negotiation while in process already agreed that “the results of the negotiations shall fully take in to account the principle of special and differential treatment for developing and least-developed countries” and that “the negotiations shall further aim at enhancing technical assistance and support for capacity building.”
During the negotiation process countries concerned in the WTO also involved its researchers, academics, business leaders, professionals, government officials and journalists. Bangladesh is no exception to this.
Sachin Chaturvedi, an Indian expert involved in the negotiation process wrote in his findings that Article V ‘has limited relevance in the case of Bangladesh, as it is not bordered by any landlocked country’
Along with Chaturvedi many from Bangladesh also participated in the trade facilitation discussions and also carried out researches for the purpose and also earned good amount. Are they not aware of the implication of Article V? This group of researchers and academics, considered to be the conscience of the nation, at this stage, however, seem to be maintaining conspicuous silence.
Those who talked about enriching the exchequer by billions from transit fee also went into hibernation once the Indians started demanding passage through Bangladesh under Article V of the WTO and without any fee. Before taking the discussion ahead let us see the provisions of Article V:
Article V of GATT: Article V of the GATT 1994 provides for the freedom of transit of goods, vessels and other means of transport across the territory of another WTO via the routes most convenient for international transit.
It stipulates the following principles of freedom of transit:
i.    equal treatment independent of flag of vessel origin, departure, entry, exit, destination or ownership of the goods, vessels;
ii.    prohibition to make traffic in transit subject to unnecessary delays or restrictions;
iii.    prohibition to levy customs duties, transit duties and other transit related charges (except for charges for transportation or those commensurate with administrative expenses entailed by transit, or with the cost of services rendered);
iv.    level of charges levied should be reasonable to the conditions of traffic),:
v.    Most favoured nation treatment with regards to charges, regulations and formalities.

Finance Minister AMA Muhith and Foreign Minister Dr. Dipu Moni on a number of occasions publicly ruled out waiver of fees on movement of Indian goods through Bangladesh saying that those would be ‘country’s income’.
Political leaders, in the opposition camp failed to capitalize on this visible rift in the ruling establishment. Those who earlier claimed to ‘lay down their lives to prevent transit to India’ also seem to have lost their strength and wisdom to question the legitimacy of such demands. It is time they realize that an effective study on the norms and practices across the globe and their comparison with the deal that Bangladesh had signed is now needed. It is also important to make public the terms of reference under the MOU. Mere rhetoric and lip service is not going to be effective this time around.
Whether India has legitimately sought passage through Bangladesh under Article V of the WTO or misinterpreted it to its own advantage can be understood from a World Bank publication under the title ‘The Transit Regime for Landlocked States: International Law and Development Perspectives’
Freedom of transit provided in Article V of WTO is ‘not a right that any state can exercise in other transit states without their consent,’ the book observes making a threadbare discussion on ‘Principles, Doctrines, and Theories Influencing the Right of Access to the Sea’.
‘To be eligible to claim this right the demanding state must fulfill certain eligibility criteria,’ the book points out adding ‘The criteria are considered fulfilled for LLS specifically due to their geographical position and economic dependence, which together create a presumption in their favor of a right of transit’.
Observers question how India has fulfilled the eligibility criteria with Bangladesh before seeking free passage through its territory. Perhaps those in favour for waiver of transit fees are in better position to answer.

Arguments Favoring Transit to India
The people who are supporting transit for India, they say that Bangladesh can take advantage of trade in transport services by providing its port facility to the landlocked countries. Other than Nepal and Bhutan, the northeast region of India is virtually landlocked and they want to use our Chittagong port. Kolkatta port is getting silted up and also too congested to deal with the Indian demand. So India is also interested in using Mongla port. Transit is an economic issue, there are plenty of examples where countries have let their ports be used as transit facilities and earned revenue. Some even say that Bangladesh should also get through India to get access to Pakistan and the other central Asian countries including Iran and Afghanistan.
Singapore has been giving this facility for many years. Iran has let its Bandar Abbas port be used by the CIS countries, which previously used Soviet ports. In Europe, Rotterdam is open to the rest of Europe, specially the landlocked countries. So from this angle, Chittagong and Mongla ports can be used as a big source of income.
Some people feel that the country has returned to a stage similar to that of 1971 war which allowed India to exploit the situation and impose a 25 year Bangladesh India Peace and Friendship treaty, not renewed when its tenure expired.
It may not be irrelevant to mention the observations of Humayun Rashid Chowdhury, the then mission chief of Bangladesh in India, who later became the foreign minister under HM Ershad and subsequently also took to the office of Speaker when Awami League under Sheikh Hasina returned to power after a lapse of 21 years.
Under the provisions of 25 year Bangladesh India Peace and Friendship agreement India did not want Bangladesh to maintain a robust ministry of foreign affairs, said Humayun Rashid Chowdhury, Bangladesh Mission Chief in New Delhi in 1971.
Bangladesh would have to maintain close liaison with the Indian government which would assist the new country in this respect of its foreign affairs, Chowdhury said adding
“I can tell you without any hesitation that Bangladesh was freed from occupying Pakistani forces on December 16, 1971; but she became a sovereign state only after Jan 10, 1972, the day Sheikh Mujib returned to Dhaka from Pakistani jail”, he added.

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