Context: In a bid to boost its economic and connectivity linkages with its neighbours, two new routes for trade with Bangladesh and Bhutan have been opened up.

Engagement with Bhutan:

  • A new trade route is opened under the Jaigaon Land Station on India - Bhutan Border  through Ahllay near Pasakha in southeastern Bhutan.
  • Background:
    • Trade between India and Bhutan through the Jaigaon-Phuentsholing border trade point amounts to approximately Rs. 6,000 crores annually. 
    • Bhutan’s trade with countries other than India through this border trade point is an additional Rs. 1,400 crores annually. 
    • The India-Bhutan Agreement on Trade, Commerce and Transit which was last renewed in 2016 allows for free trade and commerce between India and Bhutan. 
      • The pact provides for about 21 entry or exit trade points between India and landlocked Bhutan. 
      • This includes 10 trade points with Land Customs Stations (LCS) at the Indo-Bhutan border. 
      • Bhutan uses some of these to trade with third countries. 
  • The route for movement of industrial raw materials and goods destined for Pasakha Industrial Estate will boost bilateral trade and commerce and lead to decongestion of vehicular traffic along the Jaigaon - Phuentsholing route.
  • These efforts will further have a positive effect on the trade growth with North Eastern States of India.
  • Besides the new trade point, India is also looking at fast tracking a railway link between Mujnai in West Bengal and Nyoenpaling in Bhutan.

Engagement with Bangladesh:

  • India recently  flagged off the first trial of container ship from Kolkata to Agartala through Chattogram port of Bangladesh
  • Background:
    • This is the outcome of a pact signed by the two countries on coastal shipping in 2015 and another in October 2018 on the use of Chittagong and Mongla Ports for trans-shipment of goods to and from India. 
    • Eight routes have been provided under the 2019 pact which will enable access to India's northeastern region via Bangladesh. 
    • The routes identified includes - 
      • Chattogram or Mongla Port to Agartala in Tripura via Akhura, 
      • Chattogram or Mongla Port to Dawki in Meghalaya via Tamabil, 
      • Chattogram or Mongla Port to Sutarkandi in Assam via Sheola and 
      • Chattogram or Mongla Port to Srimantpur in Tripura via Bibirbazar.
  • For India, the use of the Bangladesh ports would cut the time required for transportation by allowing three landlocked northeastern Indian states access open sea trade routes from Chattogram and Mongla ports via Indian ports
  • For Bangladesh, the spinoffs come in the form of job creation, boosting prospects for investment in the logistics sector, supply chain integration and promotion of business services like finance, transportation and insurance, says industry representatives.


Image Source: Livemint