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Are Indian businesses ready to invest in 2 dedicated SEZs in Bangladesh?

PM Narendra Modi and Bangladesh PM Sheikh Hasina at the delegation level talks in New Delhi on Tuesday (Image courtesy: PIB)

Will Indian businesses now look at expanding their investments in neighbouring Bangladesh?

“Healthy” foreign direct investment (FDI) from the Indian business community into Bangladesh will be crucial to deepen bilateral ties and mutual trust between the two countries.

Dhaka is developing two dedicated special economic zones, one at Mongla and the other one at Mirsharai specifically for Indian investors. A Dhaka based analyst said Indian investors now need to take advantage of the SEZs.

At present Indian investment into Bangladesh is estimated at a little over $ 3 billion despite Dhaka being one of the largest trading partners of India.

“The Indian government too wants to encourage companies to expand their investments in Bangladesh, which is a key country under (Prime Minister Narendra Modi’s) Neighbourhood First approach,” a person familiar with recent developments told India Narrative. The person also said that Indian investments in Bangladesh would not only boost the economy of the neighbouring country and create jobs there but will also help in connectivity and overall development of the northeastern states.

Industrialist Gautam Adani has already reiterated the need to complete the transmission line being constructed as part of the 1,600 MW Godda power project by this December. This power plant is critical for power exports to Bangladesh, which is currently facing an acute electricity shortage driven by the global energy crisis.

“We are committed to commissioning our 1600 MW Godda Power Project and dedicated transmission line to Bangladesh by Bijoy Dibosh, 16 Dec 2022,” Adani said in a tweet.

Earlier, the Godda power plant was expected to commence by 2021 but the project implementation was hit due to Covid related restrictions which were in place since 2020.

“The time is ripe for the Indian business community to focus more on Bangladesh and take advantage of its economic growth, cheaper cost and huge consumer base,” Bangladesh Prime Minister Sheikh Hasina meanwhile said while addressing the Indian business community in New Delhi yesterday.

Hasina, who leaves for Dhaka today after a successful four day trip to India, added that the ties between India and Bangladesh should not just be based on trade but investments must also increase.

At another event organised by industry body Ficci, Salman F Rahman, Private Industry and Investment Adviser to Prime Minister of Bangladesh, pointed out that the industry should also look at improving the markets in the North-eastern region in India. “When you (industry) look at the Bangladesh market, don’t just look at this market but combine it with the northeast market. Both, Bangladesh and northeast market offer good transit facility including road, railway and waterways and it will be a win-win for both Bangladeshi and Indian businesses,” he said.

Also read: India and Bangladesh sharpen focus on trade deal during Hasina’s visit

India, Bangladesh economic integration key for development of both countries