The visit yielded precious little, two minor agreements and usual homilies for the cameras, and would be known more for the missed opportunities, and the subsequent bouts of bitterness.
Everything was wrong about this visit, particularly the timing and the content.
Bangladesh is line for elections next year. Prime Minister Khaleda's Bangladesh Nationalist Party will be in the race to retain power within the next few months. An outgoing Premier neither has the power nor intention to step out of the line and take immense political risk in breaking the status quo.
Why India is concerned about Bangladesh
It is fair to assume that Khaleda Zia came to India not to strike any major deals or break the impasse but to fulfill the obligation of the returning the invitation by Prime Minister Manmohan Singh last November. She could have politely wriggled out of the invitation. The fact that she didn't could be for reasons other than diplomacy or trade.
As for the contents, there were three agreements on the anvil to be signed -- extending the bilateral trade agreement first signed in 1980 and renewed from time-to-time for short periods, agreement on avoiding double taxation and agreement on investment protection.
The visit saw the leaders signing the dotted lines on the trade agreement but minus any major deviations, and therein lies a faultline in the relationship. India has for long been in favour of a longer extension of the trade agreement instead of shorter periods which necessitate protracted negotiations.
Tatas may shelve Bangladesh project
Bangladesh has also shown interest in a five-year extension but with certain caveat. Bangladesh first wants India to agree to withdraw various tariff, para-tariff and non-tariff imposed on its exports. With India not willing to be pushed into giving in on this issue, especially to a government on its way out, it was clear from the outset that the trade agreement, once again, would not alter the status quo.
In fact, in real terms, the present agreement is lesser in content than the previous ones because Dhaka, just days before, decided to drop the riverine transit clause from the agreement, arguing that it would form part of another agreement.
The agreement on avoiding double taxation and the agreement on investment protection, despite extended negotiations in the run-up to Prime Minister Khaleda's visit, could not materialise due to disagreements on many points. The agreement on investment protection is a crucial one for encouraging Indian industry to invest in Bangladesh. Indian businessmen are keen on investing in certain areas of economy like textile and steel.
In this context, it is important to analyse Dhaka's reaction to Tata's $2.5 billion investment plans in setting up a 1000MW coal fired power plant and a 420,000 tonne steel plant in Bangladesh. After prolonged negotiations, Bangladesh has now asked the industrial house to revise its proposal. This will prove to be a serious setback in establishing a trade and economic relationship between India and Bangladesh.
In India, trade and commerce hardly influence the public perception of the relationship between Dhaka and New Delhi. More important are the issues of illegal immigration and the support which various terrorist and militant groups enjoy in Bangladesh.
ISI now outsources terror to Bangladesh
India believes, and does so with enough evidence, that the illegal migration of Bangladeshis into India, especially in the north-eastern States, is a conspiracy to alter the demographic profile of the regions closer to Bangladesh. There is equally convincing evidence that Bangladesh has turned a blind eye to the activities of several anti-Indian insurgent groups despite persistent requests from the Indian government. Whatever economic power the bilateral relationship might gather, it will not go anywhere unless Bangladesh addressed these issues. There has been no indication of such a possibility during the present visit.
What does India expect Bangladesh to do on the terrorism front? Bangladesh should either shut down the terrorist training camps which some of the insurgents run, come down heavily on the support base these groups enjoy and cooperate with India in tracking down Islamist terrorist groups which are carrying out terrorist operations with Pakistan-based terrorist groups.
Bangladesh: Next terror frontier?
The Bangladesh response to the Indian demands has so far been to deny the presence of the terrorist groups. Prime Minister Khaleda's acknowledgement of her country being a 'victim of terrorism' is certainly a marked change but necessitated not by the Indian concerns but driven by the fear that some of the terrorist groups involved in the series of bomb blasts in Bangladesh in the last one year were targeting her, and could also change the political equations in the coming election. She would prefer them to be on her side, rather than in the Opposition.
So the question is why did she make this trip to India? It helps her back home at election time. The lukewarm outcome of the visit could be easily exploited to indulge merrily in open India-bashing, a sure vote-catcher in Bangladesh where her rival party, the Awami League, is often accused of being pro-India.
