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Modi in Bangladesh: Land Boundary Agreement generates keen interest in North East

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Agartala/Guwahati: The signing of the historic Land Boundary Agreement, notwithstanding some opposition in Assam, and trade and connectivity are the key issues which have generated keen interest in India’s northeastern states about Prime Minister Narendra Modi’s two-day Bangladesh visit that began on Saturday.

In a historic step, India and Bangladesh during the day moved to swap land enclaves in each other’s territory as they ratified the more than 40-year-old LBA at a ceremony witnessed by Modi and his Bangladesh counterpart Sheikh Hasina.

The agreement envisages transfer of 111 enclaves with a total area of 17,160.63 acres to Bangladesh. Dhaka is to transfer 51 enclaves spread over 7,110.02 acres to India. A 6.1-km undefined border stretch will be demarcated. The four Indian border states involved in the exchange of territories are Assam, Meghalaya, Tripura – all in the northeast – and West Bengal.

With the Teesta accord, which Bangladesh considers very important, not on the agenda, diplomatic experts were banking on the land swap deal – set to be concluded on June 6 on day one of Modi’s visit – as a “significant chapter” in India-Bangladesh relations, which could in turn pave the way for fresh openings in bilateral ties.

Veena Sikri, former Indian envoy to Bangladesh, termed the LBA the high point of the visit as it would help in taking the bilateral relations between the two neighbours into an era of connectivity, which would tremendously help the northeastern states.

Northeast-based independent journalist Sanath Chakrabarty termed the LBA signing a welcome step.

“The initiative shows that the Modi government does not want to carry the baggage of the past. They want to solve the issues in a more proactive way, this is a good move,” he said.

“However, there are issues which are irritants. The Land Boundary Agreement has also been opposed by several sections. There issues of rehabilitation and resettlement of the people to be affected by the LBA,” he said, adding that one also has to observe how Bangladesh reciprocates to this.

Modi, Hasina and West Bengal Chief Minister Mamata Banerjee also flagged off the Kolkata-Dhaka-Agartala and Dhaka-Shillong-Guwahati bus services.

The two countries signed 22 pacts, including agreements on coastal shipping, renewal of protocol on inland water transit and trade, on prevention of human trafficking and on prevention of smuggling and circulation of fake currency notes.

The two nations also concluded the memorandum of understanding on use of Chittagong and Mongla ports, while the Bangladesh Submarine Cable Company Limited (BSCCL) and Bharat Sanchar Nigam Limited (BSNL) signed a deal for leasing of international bandwidth for internet at Akhaura in Tripura.

Stressing on connectivity, Modi said Bangladesh’s decision to allow transit of power equipment and foodgrain to the northeast “echoes the strength of your human values and our shared economic opportunities”.

On Sunday, Modi and Hasina are scheduled to open the Kamalasagar (Tripura)-Kasba (Bangladesh) border haat. The border haat will be the second in Tripura and the fourth along the India-Bangladesh border.

These border haats are being set up at costs ranging from Rs.2.4-3 crore incurred by the Indian commerce ministry to boost trade in local produce of areas on the two sides.

Tripura Chamber of Commerce and Industries president M.L. Dey said Bangladesh’s trade and business with the northeastern states was much higher compared to the rest of India.

“Considering this scope, both India and Bangladesh must take more mutual steps to increase the trades and various economic activities between Bangladesh and eight northeastern states of India.”

Noted economist Sekhar Paul said economic cooperation between India and Bangladesh “must go hand in hand with strong political support from the highest places of the two close neighbours”.

The eight northeastern states, including Sikkim, are largely dependent on Punjab, Haryana, West Bengal, Delhi, Uttar Pradesh and other bigger states in India for food grains, essential commodities and household goods.

“Trade between the northeastern states and Bangladesh are gradually increasing every year. With Modi’s visit, the cross border trade might further boost up,” Habul Biswas, secretary of the Exporters-importers Association of Tripura, told IANS.

Tripura Chief Minister Manik Sarkar earlier told IANS the visit was expected to immensely benefit the northeastern states.

He said Dhaka helped “a lot” to tame decades of terrorism in Tripura.

But he pointed out that some camps of northeastern militants still existed in Bangladesh. (IANS)

 

 

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Fall Of The Currency And Increase In Oil Prices: India ‘s Turmoil

The falling rupee has given a boost to some of India’s most lucrative exports, such as software services and pharmaceuticals, which add up to billions of dollars.

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India
Rajesh Kumar, left, shares a ride to work with another employee, Dilip Swain, right, as higher petrol prices in India begin to be felt in people's pocketbooks.VOA

The fall of the currency of India to record lows and rising global oil prices have raised worries that the world’s fastest growing economy faces headwinds that could hurt the fortunes of Prime Minister Narendra Modi’s party in next year’s general elections.

From people filling fuel at gas stations to thousands of students heading out to study overseas, the impact of the slumping rupee is sparking discontent.

Having plunged by about 12 percent against the dollar this year, the rupee is one of Asia’s worst faring currencies, and as in other countries, the slide has accelerated since the crash of the Turkish lira.

“The reasons are global. We must bear in mind that in last few months, dollar has strengthened against almost every currency,” said Finance Minister Arun Jaitley recently as he tried to send out reassuring signals that India’s economy is on track.

India
The rupee has plunged by about 12 percent this year raising fears of spiraling inflation. VOA

The rupee’s sharp depreciation comes at a time when the economy had recovered from a slowdown and surged to a two-year high in the quarter that ended in June. Forecasts put growth for this year at 7.5 percent.

Economy will slow

But economists warn this momentum will be difficult to sustain as the tumbling rupee, along with rising crude oil prices, takes a toll on growth. India, the world’s third largest oil importer, gets almost 80 percent of its fuel needs overseas.

“The government needs to mellow down on growth aspirations,” said N.R. Bhanumurthy, economist with the National Institute of Public Finance and Policy. “The growth needs to come down to a little less than 7 percent.”

Even as the government faces the prospect of a slowing economy, it is under pressure to lower taxes on gas and diesel to bring down the sharp rise in prices. Fuel is one of the most heavily taxed items in India, with rates as high as nearly 50 percent. Prices vary from state to state, but they have gone up by about 14 percent this year.

Hoping to cash in on the growing disaffection over the surge in fuel prices and the sliding rupee, opposition parties led nationwide protests that shutdown offices and schools in several cities this week.

India
Discontent with spiraling fuel prices poses a challenge to Prime Minister Modi’s Bharatiya Janata Party ahead of general elections next year. VOA

The government dismissed the protests, saying that although people faced momentary difficulties, they understood they were because of factors beyond its control.

Political analysts are not so sure, pointing out that fuel prices are a politically sensitive issue in India and usually result in a spike in inflation.

“Anger is rising, there is resentment,” said Satish Misra at the Observer Research Foundation, warning the ruling party will face a backlash “Obviously that is going to have a negative impact on the electoral fortunes of the Bharatiya Janata Party, there is no doubt about that.”

Warnings from economists

Among those who are upset with the high fuel prices is Rajesh Kumar, who commutes 30 kilometers to the advertising agency where he works. Hit by the higher prices that eat into his income, he has started sharing the ride with another employee.

India
Narendra Modi. Wikimedia Commons

“I have given up the idea of buying another car,” he said despondently. “I will not be able to afford the cost of running it.”

Economists however have warned the government against giving in to populist pressures ahead of a series of state polls later this year and general elections around April next year. They say lowering taxes on fuel or taking measures to prop up the currency will strain the country’s finances and hurt the economy in the long run.

Also Read: Diverse Gathering To Be Addressed This World BioFuel Day: PM Narendra Modi

“One needs to be more careful and vigilant,” Bhanumurthy said. “It is easy for India to stay with low growth than experiencing the high deficit.”

But there is also some good news for the Indian economy. The falling rupee has given a boost to some of India’s most lucrative exports, such as software services and pharmaceuticals, which add up to billions of dollars. (VOA)