Indian opens $2-bn line of credit for Bangladesh, inks 22 agreements

India and Bangladesh have opened a new chapter in their ties as the two sides signed 22 agreements, including on cooperation in maritime safety and to curb human trafficking and fake Indian currency.

Prime Minister Narendra Modi and his Bangladesh counterpart Sheikh Hasina witnessing the exchange of agreements in Dhaka, on Saturday

After extensive talks between Modi and Bangladesh Prime Minister Sheikh Hasina, Prime Minister Narendra Modi also announced a fresh line of credit of $2 billion to the neighbouring country.

Hasina also promised "zero tolerance" against terrorism as Bangladesh has been seen as a hiding ground for insurgents of north east India.

She also said that the two countries agreed to set up two Special Economic Zones to bridge the growing trade deficit. Modi also promised to do "everything" to address it.

Modi also promised quick implementation of the earlier line of credit of $800 million and full disbursement of $200 million.

PM Modi said connectivity between India and Bangladesh by road, rail, rivers, sea, transmission lines, petroleum pipelines and digital links will increase. "Today, we have unveiled some of the pathways to this future," he said.

In a major initiative to boost connectivity and enhance people-to-people contact, two bus services - Kolkata-Dhaka-Agartala and Dhaka-Shillong-Guwahati - were flagged off jointly by PM Modi, Sheikh Hasina and Mamata Banerjee.

During the talks, it was decided that Indian Missions would be opened in Khulna and Sylhet while Bangladesh mission will be opened in Guwahati.

Referring to the Teesta water issue which remains unresolved, PM Modi said "our rivers should nurture our relationship, not become a source of discord. Water sharing is, above all, a human issue. It affects life and livelihood on both sides of the border."

He mentioned the settlement of boundary issue to say that "we have shown political resolve and goodwill" with it.

"We will work together to harness the rich potential of our relationship. And, we will address our challenges in a spirit of friendship and from a position of mutual trust and confidence," Modi said, adding the agreements signed reflect this "vision and commitment".

Ms Hasina, while describing India as a "very important neighbour", said PM Modi's visit has given "us a renewed hope and would provide growth" to our relations.

"The deals that we signed today would open new doors in the areas of trade, investment," the Bangladesh prime minister said but underlined that "the most important is to translate the agreements into a reality."

She said she believed that "collectively we can work and ensure the prosperity of this region that was Mujib's dream."

PM Modi said the future he dreams for India is the future he wishes for Bangladesh.

"As we deepen our political engagement and celebrate our rich inheritance, as our economies get more integrated and our people better connected, our nations will become more prosperous," he said, while observing that "our growing cooperation is a picture of my deeply-held belief in the shared prosperity of neighbours".

Contending that the two countries have added new dimensions to the economic ties, the PM Modi said that the coastal shipping agreement will boost bilateral trade while the Indian Economic Zone will promote Indian investments in Bangladesh.

"The new border haat at Kamalasagar will reinforce traditional economic links. And, the agreement on blue economy and maritime cooperation opens a new area of economic opportunities. We should now extend our frontiers of cooperation to space," he said.

PM Modi said he was "conscious of the huge trade imbalance, despite duty free and quota free access to Bangladesh in India on all but 25 items" and had "assured Prime Minister (Hasina) that we will do everything we can to bridge the deficit."

Indian investments in Bangladesh will help, he said, adding "I will also try to make trade smoother and easier, including at the border."

The agreement on standards and testing is a step in that direction, the Indian prime minister said.

He said power supply from India to Bangladesh will grow from 500 MW to 1100 MW within two years. "The 1320 MW Rampal power project is making progress in accordance with your (Bangladeshi) laws and regulation. We can do more together in power sector, here and in India," he added.