Bangladesh, Japan, and India met in India’s Tripura on April 11-12 to put in place connectivity initiatives to harness the region’s commercial potential. In this meeting, Japan proposed to develop an industrial hub in Bangladesh, with supply chains to landlocked Northeast states in India, Nepal, and Bhutan, by creating a port and transport in the region.
After Japan prime minister’s Fumio Kishida’s visit, the Japanese government approved $1.27 billion in funding to Bangladesh for three infrastructure projects – including a new commercial port in the Matarbari area with links to adjacent landlocked Indian states, including Tripura, and broader international markets. Japan’s ambassador to India, Hiroshi Suzuki, said it could be a win-win plan for India and Bangladesh.
It is well known that India and Japan are the most significant development partner in the South Asian region. So how have Bangladesh become so indispensable to both countries that they are hosting meetings and stressing the issues over and over?
The Bangladesh factor
First of all, India’s Northeast is key to Japan’s Indo-Pacific plan. On the other hand, Bangladesh is key to India’s Northeast. So, the partnership with Bangladesh is inevitable to the Indo-Japan partnership. The Northeast region is a critical geostrategic site for India and Japan in sustaining multilateral relations because it shares borders with several other countries, including Nepal, Bhutan, China, Myanmar, and Bangladesh.
Secondly, the comprehensive collaboration among India, Japan and Bangladesh provides the landlocked Northeast with access to the Bay of Bengal and access to ASEAN countries, which plays a crucial role in unleashing the enormous potential for growth and prosperity based on better access to the Indian Ocean, becomes crucial for the improvement of people’s lives of Northeast region.
Moreover, Japan has been working closely with India to support the development of the Northeast region through the India-Japan Act East Forum. The plan involves adjusting tariffs, boosting connectivity, jointly courting investment, particularly from Japanese enterprises, and binding India closer to countries on the Mekong River system, such as Myanmar, Laos, Thailand, Cambodia, and Vietnam. It is impossible to connect Northeast region with the mainland of India without Bangladesh. Neither Japan would be able to get closer to India’s Northeast region without the connectivity over Bangladesh.
Matarbari Deep Seaport can be a geopolitical game changer
Japan is investing in Northeast India and Bangladesh, including the deep-sea port at Matarbari that will connect the landlocked region with the Bay of Bengal. The envisaged Matarbari project would be Bangladesh’s first deep-sea port capable of hosting large vessels. The deep seaport was likely to become operational by 2027 and would be key to building an industrial hub connecting the Bangladeshi capital Dhaka to landlocked areas of India.
Upon completion, it should serve as a critical port for India’s underdeveloped northeastern states. Regarding port development, Japan could hardly ask for a better spot than Matarbari — a natural gateway to both South and Southeast Asia. Tripura state, around 100 kilometers from the proposed seaport, might serve as a gateway for regional exporters.
Major Japanese investment projects in Northeast India
Japan has played an important role in many infrastructure projects in Northeast India. Japan will help build roads in Assam, Mizoram, and Tripura to connect to Japanese-assisted projects in Bangladesh. Earlier in 2019, the Government of Japan invested 205.784 billion Yen, equivalent to approximately Rs 13,000 crore, in several ongoing and new projects in different states of India’s Northeast region. Some of the important projects in which Japan is collaborating include the Guwahati Water Supply Project and Guwahati Sewage Project in Assam, Northeast Road Network Connectivity Improvement Project spread over Assam and Meghalaya, Northeast Network Connectivity Improvement Project in Meghalaya, Bio-diversity Conservation and Forest Management Project in Sikkim, Sustainable Forest Management Project in Tripura, Technical Cooperation Project for Sustainable Agriculture & Irrigation in Mizoram, Forest Management Project in Nagaland, etc.
As part of its Official Development Assistance (ODA) commitment to India, it has contributed ODA loans for the Northeast Road Network Connectivity Improvement Project (which includes the National Highway 51 in Meghalaya and the NH54 in Mizoram). This will support the expansion and upgradation of the Shillong-Dawki strip in the Northeast state of Meghalaya and the construction of a new bridge in Dawki (on the border with Bangladesh).
In addition, private Japanese organizations, such as the Nippon Foundation, have financed the construction of the Imphal War Museum in Manipur in Northeast India in memory of the nearly 70,000 Japanese soldiers who perished in the Battles of Imphal and Kohima during the Second World War 2.
Also, in a significant development, India and Japan have also established the India-Japan Act East Forum and the forum’s first meeting in December 2017. This meeting was co-chaired by then Indian foreign secretary S Jaishankar and Japan’s Ambassador to India, Kenji Hiramatsu. Launching various programs, such as the National Highway Network, Product-Linked Incentives Programmes, and the Gati Shakti Master Plan, contributes to Japan’s “Strategic interest” in the Northeast region. Japan views these programs and projects as incentives for various investments.
The goal of joint collaboration
None of those projects would be fruitful unless there is connectivity through Bangladesh. Developing an industrial value chain connecting the Bay of Bengal and the Northeast will bring significant economic benefits to the Northeast region and Bangladesh. The purpose of such a collaboration is to lure investment toward Bangladesh and India’s northeastern states from current manufacturing hubs in Southeast Asian nations like Thailand. Rising wages have forced manufacturers to look elsewhere for opportunities.
India, Japan, and Bangladesh need to create a mechanism to discuss three key stumbling blocks to regional investment: tariffs, customs procedures, and connectivity. India and Bangladesh are negotiating a Comprehensive Economic Partnership Agreement (CEPA) that is expected to boost bilateral trade. Bangladesh and Japan are also in talks to conclude an economic cooperation agreement that would spur trade and investment. With infrastructure projects set to be completed over a five- to ten-year horizon, the proposal for joint discussions on investment promotion, customs, and tariffs will set the stage for an economic boom in India’s northeast.
Without Bangladesh, India and Japan can’t run the development projects or create any supply chain in northeast India. India has always benefitted from Bangladesh whenever it comes to the northeast. Bangladesh had been by India’s side, whether in trade or security. So, India needs to act carefully on India-Bangladesh bilateral relations, as Bangladesh is an essential factor for the development of the northeast and India-Japan relations.
(The writer is an international relations PhD fellow at University of Bucharest.)
