From HT Archives: India, B’desh sign accord on border and economic ties | Latest News India - Hindustan Times
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From HT Archives: India, B’desh sign accord on border and economic ties

ByPrithvis Chakravarti, New Delhi
May 18, 2024 06:26 AM IST

India and Bangladesh signed a joint declaration in 1974 to enhance industrial potential, resolve border issues, and boost economic cooperation.

In a joint declaration signed on May 16, 1974, Prime Minister Indira Gandhi and Bangladesh Premier Mujibur Rehman announced a series of joint measures aimed at augmenting Bangladesh’s industrial potential and achieving the targets fixed in the balanced trade and payments agreement signed by the two countries last year.

Prime Minister Indira Gandhi with Bangladesh premier Mujibur Rehman at the signing of the agreement on May 16, 1974. (HT Archive)
Prime Minister Indira Gandhi with Bangladesh premier Mujibur Rehman at the signing of the agreement on May 16, 1974. (HT Archive)

While various economic cooperation agreements were fairly smoothly processed and finalised well in time for the joint declaration, the talks on the question of border demarcation and the sharing of the Ganga waters claimed nearly four hours of extra time, delaying the signing of the declaration.

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The last-minute efforts led to a final agreement on the border question, but only an interim one on the Ganga waters. India agreed that the Farakka barrage would be commissioned only after a final accord was reached on the basis of augmenting the water resources of the Ganga during the dry season by harnessing the water potential of the eastern rivers.

The details of the decisions on these issues as also the texts of the protocols on trade and joint ventures were not made public immediately. But officials indicated that the agreement on border demarcation would involve a package deal, including the transfer of Berubari to Bangladesh and the exchange of the 130 Indian enclaves in Bangladesh with the 95 Bangladesh enclaves in India. The residents of these enclaves, by implication, would be given the option to migrate to their respective countries.

Another noteworthy decision of long-term benefit, mentioned in the joint declaration, related to steps aimed at resuming railway traffic between Calcutta and Agartala across Bangladesh, which would cut down the travelling time by nearly 40 hours.

The declaration laid special emphasis on jute since an important position the commodity enjoyed as a foreign exchange earner for both the nations. It announced the appointment of a joint commission (at the level of Ministers) to promote co-operation in production, technical development and marketing. A joint committee (also with Ministers) will be set up to tackle the problem of clandestine trade in a variety of goods between India and Bangladesh.

Before the declaration was issued the commerce ministers of the two countries — DP Chattopadhyaya and Khandker Moshtaq Ahmed — signed a protocol setting out a timebound schedule of delivery of the commodities listed in the trade agreement, coal for Bangladesh and newsprint and fresh and dry fish for India among the important items of merchandise.

A similar protocol was signed on behalf of the Planning Commissions by Sukhomoy Chakravarti for India and Nurul Islam for Bangladesh on joint industrial ventures. The agreement listed three new industrial projects to be established in Bangladesh for the production of cement, fertilisers and sponge, iron and a clinker factory in India (Meghalaya) meant exclusively to feed a Bangladesh cement plant at Chittagong.

Later, separate agreements were signed by finance ministry officials of the two governments formalising the Indian credit commitments — a total of 79 crores — to back the industrial ventures and the purchase by Bangladesh of machinery and a host of consumer goods from India.

The Cabinet Committee on Political Affairs reviewed the Indo-Bangladesh talks before the Prime Ministers signed the joint declaration and the border demarcation agreement. The meeting was held at Rashtrapati Bhavan.

The economic cooperation agreement provides for the establishment of a sponge iron plant with a capacity of five lakh tonnes per year at Shatnal, 64km from Dacca, a natural gas-based fertiliser plant with a capacity of 500,000 tonnes of urea at the same place and a cement plant at Chatak with a capacity of 315,000 tonnes per year.

For the sponge iron plant for which a feasibility study has already been made. India will supply 7.5 lakh tonnes of iron ore. Out of its estimated production of five lakh tonnes the Bangladesh steel plant will require 250,000 tonnes and the remaining will be sold to India. India’s assistance to this plant will amount to about 5 crores in the form of equipment, machinery and services.

The two countries have come to the understanding that urea from the proposed fertiliser plant can be exported to India. The sponge iron plant and the fertiliser plant are planned in the same place from the point of view of transport economy. Carriers of iron ore to Shatnal can take back fertilisers to India.

For the proposed cement plant, India will supply limestone and machinery. This plant is expected to be commissioned by 1977.

India will extend credits to Bangladesh on mutually acceptable terms and conditions to finance the procurement of equipment, goods and services as may be available from India for these projects. The modalities of implementing the aforementioned decisions will be worked out immediately by officials of the two Governments and a programme of action submitted to their respective Governments.

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