India and Bangladesh recently signed the second Addendum to the Protocol on Inland Water Transit and Trade, paving the way for increased trade efficiency and cost-effectiveness between the two nations. The Protocol’s history goes back to 1972, demonstrating a durable commitment from both countries towards nurturing their trade relationship via inland waterways.
Protocol on Transit and Trade
This key bilateral agreement, last renewed in 2015 for five years, provides for automatic renewal for an additional five-year period. It plays a vital role in facilitating trade through inland waterways between Bangladesh and India. However, the recent signing of the second Addendum to the Protocol shows a continued effort to enhance this arrangement for the benefit of both nations.
Additions to the Protocol
The second addendum introduces new Indo Bangladesh Protocol (IBP) routes and declares new Ports of Call to further enhance trade activities. According to these updates, inland vessels of one country are permitted to transit across the specified routes of the other. The agreement also stipulates a 50:50 cargo sharing system for both Indian and Bangladeshi vessels involved in inter-country trade or transit.
Expanded IBP Routes
The number of IBP routes has gone up from 8 to 10, including the Sonamura-Daudkandi stretch of Gumti river, which will boost connectivity of Tripura and nearby states with economic hubs of India and Bangladesh. Moreover, other route additions like the Rajshahi-Dhulian-Rajshahi Route (with its extension up to Aricha, Bangladesh) will stimulate infrastructure development in Bangladesh and help ease congestion at Land Custom Stations.
New Ports of Call
Ports of call are crucial stopover points where ships can halt for supplies, repairs, or transshipment of cargo. Under the Protocol, there were already six such ports each in India and Bangladesh. The addition of five new ports on each side means more flexibility for vessels to stop and restock.
Inclusion of Extended Ports
The addendum includes two extended Ports of Call – Tribeni (Bandel), West Bengal and Badarpur, Assam on the Indian side, and Ghorasal and Muktarpur on the Bangladesh side. This inclusion will enhance connectivity between Meghalaya, Assam, Bhutan, and these ports.
Multimodal Logistics Park and Mechanized Vessels
The proposed Multimodal Logistics Park in Jogighopa is expected to drive up trade and commerce in the region. Another notable feature is the introduction of shallow draft mechanized vessels for trade movement, allowing cargo from regions like Bhutan and North East India to be exported easily to Bangladesh. This change will also give traders better access to Bangladesh’s hinterland.
New Trading Opportunities
The Addendum opens up further opportunities for cargo movement, as inland vessels from both countries can operate on the designated protocol route and load or unload cargo at notified docks. The Indian transit cargo mainly comprises coal, fly-ash, Over Dimensional Cargo (ODC) for power projects in North East region, along with potential cargo such as fertilizers, cement, food grains, agricultural products, and containerized cargo.