India’s sea routes to Northeast

The National Revenue Board of Bangladesh issued the Permanent Transit Order on April 24, facilitating transit and transshipment of Indian cargo through Chittagong and Mongla sea ports, clearing the decks for the operationalization of the sea routes connecting Northeastern states with the rest of India. This is a historic milestone in India’s effort to end geographic isolation and boost trade and commerce in the northeast region. India and Bangladesh signed a Memorandum of Understanding on the use of two sea ports in Bangladesh in 2015, relevant agreements in 2018 to facilitate the movement of goods between the rest of India and the northeast region, and finalized the Standard Operating Procedure (SOP) in 2019. The two neighbouring countries also conducted successful trial runs of the ships and transhipment of consignments to the northeast region. The agreement and SOP permit the movement of goods by India in Bangladesh through waterways, rail, road or multi-modal transport through 16 routes to enable access to the northeast region via the neighbouring country. The routes are: Chittagong/Mongla Port to Agartala (Tripura) via Akhaura (Bangladesh) and return; Chittagong/Mongla Port to Dawki (Meghalaya) via Tamabil (Bangladesh) and return; Chittagong/Mongla Port to Sutarkandi (Assam) via Sheola (Bangladesh) and return; and Chittagong/Mongla Port to Srimantpur (Tripura) via Bibirbaz (Bangladesh). The issue of the Statutory Regulatory Order by the Bangladesh National Board of Revenue was awaited by India for commercial permission by the neighbouring country to transport goods to and from the northeast region through Bangladesh. Agartala is only 135 km from Tripura’s border town, Sabroom, while the distance between Sabroom and Chittagong port is only 72 km. The distance between Agartala and Kolkata port, on the other hand, is about 1600 km, which explains the great advantage the use of two sea ports in Bangladesh provides to the transportation of goods to and from the northeast region by India. India has already successfully used the India-Bangladesh Protocol Inland Water Route to operate a 2000-tonne vessel for transporting goods to the northeast region via Bangladesh from Kolkata or Haldia ports via the Brahmaputra River. Permission to use the sea ports will facilitate the use of much larger ships for transporting cargo of a larger volume, which is also critical to reducing the transportation cost. The transportation cost through the sea ports is estimated to be reduced to one-third of the transportation cost incurred on roadways through the narrow Chicken Neck corridor. The reduced transportation cost of cargo can be expected to go a long way in bringing down the prices of commodities procured by north-eastern states from the rest of India, provided the benefit is passed on to consumers. The permit to use the sea ports came on the heels of Prime Minister Narendra Modi and Bangladesh Prime Minister Sheikh Hasina jointly inaugurating the India-Bangladesh Friendship Pipeline earlier in March. Numaligarh Refinery Limited (NRL) has built this transborder pipeline with 132 km of length and a capacity of 1 million metric tonnes per annum for supplying high-speed diesel from NRL’s marketing terminal at Siliguri to Bangladesh Petroleum Corporation’s depot at Parbatipur in Dinajpur district. Of the total length of the pipeline, nearly 127 km are in Bangladesh, and India has spent Rs 285 crore for the construction of the Bangladesh portion, while NRL has borne the balance cost of Rs 92 crore for the 5-km-long portion in India. Bangladesh says this pipeline will ensure fuel security in the country. Similarly, for India, the transit permission through the sea ports and IBP routes, besides land routes in Bangladesh, will be crucial to India’s geostrategic interests vis-à-vis the landlocked northeast region. Under the permanent transit regime, Indian ship operators will have to obtain a licence from Bangladesh Customs for a period of five years, and transhipped goods cannot be kept for more than seven days at Bangladesh sea ports. The northeast region's efficient and robust multimodal transport, roads, and railways connected to the permitted routes through the sea ports will be critical to ship operators complying with the requirement. The states in the region need to play a pro-active role in fast-tracking a host of transborder connectivity projects as well as highways, railways, and multimodal projects in the region initiated by the Central government so that opportunities to use the sea ports in Bangladesh are used optimally for unlocking the economic potential of the region. The Central Government projected that transit through the sea routes will facilitate the bamboo industry in the region to find large markets in the rest of India, which imports bamboo due to the high transportation costs on the existing roadways connecting the region. Deepening bilateral relations between India and Bangladesh has created tremendous growth opportunities for the northeast region. Optimal utilisation of the sea ports will be possible only when traders, entrepreneurs, and business establishments in the northeastern region start exploring the commercial benefits of sourcing goods from the rest of India and supplying goods from the region through the marine routes.