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Direct Cargo Shipments ‘historic step’ for Indo-Bangladesh trade

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Bangladesh’s Chittagong port. Image source: lightcastlebd.com

Dhaka, Bangladesh: For the first time in their history as nations, neighbors Bangladesh and India last week launched direct cargo services that would enable goods shipped by sea to reach each other’s ports in a maximum of four days, officials say.

Previously, goods sent from India took more than three weeks to reach Bangladesh’s Chittagong or Mongla ports because shipments first had to pass through Colombo or Singapore, Bangladesh shipping minister Shajahan Khan said.

“I have inaugurated the service on Tuesday and the first Bangladesh cargo ship left Chittagong Thursday for Indian ports. This is a historic day for all of us,” Khan told reporters.

“The businessmen used to take at least 25 days to carry goods to and from India and Bangladesh. Now, with the coastal shipping service in place, we can export to and import from India in only four days. This reduced time and cost would automatically boost trade between the two neighbors,” Khan said.

Businessmen said the direct routes would also boost trade between India and Bangladesh and allow India to ship products to its seven northeastern states via Chittagong port.

“The coastal shipping is a very good move to increase trade in the sub-region comprising Bangladesh, landlocked northeastern states of India, Nepal and Bhutan,” Q.K. Ahmad, the former president of the Bangladesh Economic Association, told BenarNews.

Bangladesh and India signed an agreement during Indian Prime Minister Narendra Modi’s visit to Dhaka on June 6, 2015, followed by the signing of a protocol in November, which cleared the way for direct maritime cargo services.

The countries’ bilateral annual trade volume is worth more than U.S. $6.6 billion, according to a commerce ministry figure.

Cargo ships from Bangladesh’s Chittagong, Narayanganj, Ashuganj, Paira, Khulna, Mongla and Pangaon (near Dhaka) ports can carry goods to seven Indian eastern coastal ports in Kolkata, Haldia, Paradip, Vishakhapatnam, Kakinada, Krishnapatnam and Chennai and vice versa, according to the agreement papers.

On Thursday, Bangladeshi shipping company Neepa Paribahan dispatched its first cargo ship laden with cotton and textile items from Chittagong port to the Indian port of Krishnapatnam, company CEO Sirajur Rahman told reporters.

Before this week, a ship from India’s Kolkata port could reach Chittagong ports in two days, but companies had to pay the rate based on a 25-day transit via Singapore or Colombo.

“And businessmen must charge for every second. The higher cost results in higher commodity prices to the consumers,” Rahman said.

Khwaza Moinuddin, a columnist and former president of Economic Reporters’ Forum in Bangladesh, explained that Bangladeshi and Indian businessmen used to ship cargo between the two countries, via Singapore and Colombo, for economic reasons.

“The volume of cargo generated in different Indian ports for Bangladesh was not adequate to load a big ship, as a majority of the export-import business was done through land ports. So all the small consignments of cargo were sent to Colombo or Singapore, where businessmen jointly hire big Bangladesh-bound ships,” he told reporters.

Mainuddin said the introduction of the coastal shipping service would allow small ships to shuttle to all ports located along India’s east coast and carry the goods to and from Bangladesh.

Easing overland bottlenecks

The text of the bilateral deal stipulated that the maritime shipping services between India and Bangladesh would enable the movement of cargo to the Northeastern states through Chittagong, and thereafter by road or river routes.

“The deep draft ports on the eastern coast of India can be ‘hub ports’ for the onward transportation of cargo to Bangladesh via the coastal mode. The Indian ports will attract enhanced cargo and also the overall transportation cost to Bangladesh will get reduced,” the document said.

The rapid growth of India-Bangladesh trade has resulted in congestion at the main Petrople-Benapole land port. The traffic congestion on the Bangladesh side of the land port has emerged as one of the biggest impediments to export-import trade, it said.

(The article was originally published in benarnews.org)

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All You Need To Know About India’s Strategic Chabahar Port

The Chabahar Port is a seaport in Chabahar, which is on the Gulf of Oman, near Iran-Pakistan border.

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Chabahar Port is of great international significance in terms of trade, especially for India. Wikimedia Commons
Chabahar Port is of great international significance in terms of trade, especially for India. Wikimedia Commons

By Ruchika Verma

  • The Chabahar Port is of great strategic importance for India
  • It is in Iran and is being built and operated by India
  • This port will increase India’s trade with Central Asia and Europe

The Chabahar Port is a seaport in Chabahar, which is on the Gulf of Oman, near Iran-Pakistan border. Chabahar is the trans-shipment and logistics hub for the Makran Coast and Baluchistan province of Iran.

Chabahar Port is built and operated by India. Wikimedia Commons
Chabahar Port is built and operated by India. Wikimedia Commons

The tension between India and Pakistan is nothing new. There are several instances where both the countries have tried to obstruct each other’s political or economic agendas. This obstruction, along with other strategic reasons, resulted in the India and Iran’s deal on the Chabahar Port, which is crucial because of several reasons.

Here are few things about it you may not have known before :

  • Under the Trilateral Transit and Transport Agreement of 2016, the Chabahar port is the gateway to the Transport Corridor between India, Iran and Afghanistan, which allows multi-modal goods’ and passengers’ transport.

Also Read: India and Iran sign agreement to develop Chabahar Port

  • The agreement also states that India will develop and operate two berths in the first phase of the port. The contract is for 10 years and extendable. This time period excludes the first two years as they will be used for construction.
Chabahar Port will make India's trade with Afghanistan easier. Wikimedia Commons
Chabahar Port will make India’s trade with Afghanistan easier. Wikimedia Commons
  • The Chabahar Port’s first phase, which was developed by India, and inaugurated by Iran on 4th December 2017, is of great strategic importance as it makes it easier for India to conduct trade with Central Asia and Europe.
  • Iran’s Chabahar port is also important for India’s trade because of Pakistan’s reluctance in allowing India to send goods to Iran and Afghanistan through its land territory.

Also Read: Gwadar Port: China Turning Pakistan Port Into Regional Giant 

  • The development of Chabahar Port will increase the momentum of the International North-South Transport Corridor whose signatories include India, Afghanistan and Russia. Iran is the key gateway in this project. It will improve India’s trade with Central Asia as well as Europe.
    The Chabahar Port has also reduced Afghanistan’s dependence on the transit road, which went through Karachi. Now, trade can be conducted via Chabahar Port too. Islamabad has accused India of trying to use this development as a means to destabilise Pakistan.

    The Chabar Port is the said to be the counter to the Gwadar Port. Wikimedia Commons
    The Chabar Port is the said to be the counter to the Gwadar Port. Wikimedia Commons
  • The Chabahar Port also acts as a counter to the barely 100 km away, Gwadar port in Pakistan, which is developed by China. However, Iran has defended that Chabahar is not a rival to Gwadar and Pakistan is invited to join in its development.
  • In October 2017, India sent its first shipment of wheat to through Chabahar to Afghanistan, in order to test the viability of the route.
  • India will also construct a 900-km Chabahar-Zahedan-hajigak railway line that will connect Port of Chabahar to Hajigak in Afghanistan. It will also connect Mashad in the north, providing access to Turkmenistan as well as northern Afghanistan.This project is worth $1.6 billion.

    India will supply $400 million worth of steel rails to Tehrain. Wikimedia Commons
    India will supply $400 million worth of steel rails to Tehran. Wikimedia Commons
  • It is being said that India will supply $400 million of steel rails to Tehran. There are also possibilities of setting up a fertilizer plant through a joint venture with the Iranian government.