In recent developments, the long-awaited Memorandum of Understanding (MoU) for the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement (MVA) has been finalized by India, Bangladesh, and Nepal. This significant move takes us back to when this project was conceived in response to the failure of the South Asian Association for Regional Cooperation (SAARC) to agree on a regional motor vehicles agreement during a 2014 summit in Nepal, mainly due to opposition from Pakistan.
The BBIN Connectivity Project
The BBIN Motor Vehicle Agreement for the Regulation of Passenger, Personal, and Cargo Vehicular Traffic between these four countries was born during a meeting of transport ministers in Thimpu on June 15, 2015. The primary objective of operationalizing the MVA by finalizing the Passenger and Cargo Protocol is to unlock the full potential of trade and people-to-people connectivity between BBIN countries, thus fostering increased sub-regional cooperation.
Bhutan’s Reluctance and Foreign Funding
The BBIN project suffered a blow in 2017 when Bhutan temporarily withdrew due to its inability to obtain parliamentary approval for the MVA. Despite this, the other three countries resolved to continue with the agreement. The formidable financial support for this project comes from the Asian Development Bank as part of the South Asian Subregional Economic Cooperation programme, which has recommended around 30 road projects worth billions of dollars for priority. Similarly, the World Bank expects a nearly 60% increase in traffic-regional trade within South Asia following the MVA implementation and has shown interest in supporting infrastructure.
Persisting Issues
Agreements such as insurance and bank guarantees, as well as the size and frequency of freight carriers entering each country, are yet to be finalized. These issues have delayed final protocols, but the countries hope to resolve them this year before commencing bus and truck movements between them.
Bhutan’s Concerns
Bhutan raised sustainability and environmental concerns as its main objections. Prime Minister Lotay Tshering maintained in 2020 that considering Bhutan’s current infrastructure and commitment to remaining a carbon-negative country, it would not be feasible to join the MVA. Consequently, the Bhutanese parliament decided against endorsing the plan.
Other Connectivity Initiatives Involving India
India also participates in other similar connectivity initiatives such as the Bangladesh-China-India-Myanmar (BCIM) Corridor, the India-Myanmar-Thailand Trilateral Highway, and the Kaladan Multi-Modal Transit Transport (KMMTT).
The Way Forward
Given Bhutan’s environmental concerns, India may need to consider including less environmentally damaging alternatives such as waterways and riverine channels. This move might help to alleviate Bhutan’s reservations about the agreement and pave the way for smoother regional cooperation and integration. The BBIN MVA represents an opportunity for increased regional connectivity and trade potential, despite the challenges it currently faces.
