Thaindian News

Dhaka, July 7 (IANS) Ahead of Indian Prime Minister Manmohan Singh’s visit to Bangladesh in September, the two neighbours Thursday signed two key pacts to enhance mutual investment and Bangladesh’s exports as they renewed their pledge to jointly combat terrorism.

The two sides also renewed their pledge not to allow their territories to be used by forces inimical to each other.

In key steps that are set to expand economic and development partnership, India will sell 500 MW of electricity to Bangladesh that is reeling under a power crunch and half of this will be available by the end of 2012 or early 2013. India also agreed to set up a 1,300 MW coal-based thermal power plant in Bangladesh’s southern Khulna area.

India’s External Affairs Minister S.M. Krishna, who began his three-day visit to Dhaka Wednesday, held talks with his counterpart Dipu Moni on a range of issues that covered trade and investment, terrorism, the boundary issue and the sharing of river waters. He also called on Bangladesh Prime Minister Sheikh Hasina Wajed.

These talks have set the stage for Manmohan Singh’s visit to Dhaka Sept 6-7, a trip that was announced simultaneously by New Delhi and Dhaka earlier this week.

The two sides signed two trade-related pacts, including an exchange of instruments of ratification related to the Bilateral Investment Promotion and Protection Agreement (BIPPA) and Standard Operating Procedure for the entry of trucks from Bhutan into territories of the two countries near the border.

The BIPPA is set to usher in a new era in bilateral economic ties as it accords each other Most Favoured Nation status in investments. Under the pact, investments of either country would not be nationalised or expropriated except for public purpose and that too against “fair and equitable compensation”. The 10-year pact entails repatriation of capital investments, non-operating profits, loan repayments, royalty payments and service fees on a non-discriminatory basis.

They also reviewed a slew of important steps that are enhancing exports from Bangladesh, which will help in addressing a nearly $3 billion trade imbalance, a key irritant in bilateral relations that has provided a handle to anti-India forces in the neighbouring country.

“We are happy to note that exports from Bangladesh to India have increased by 56 percent in the first 10 months of 2010-11. We want exports from Bangladesh to grow further,” Krishna said at a joint press conference with Moni. “The annual duty free quota for export of garments from Bangladesh to India has been raised from 8 to 10 million pieces,” he said, adding that investment will generate employment in Bangladesh.

Underlining that bilateral relations have been on “a high trajectory,” Krishna said that a number of projects approved under the $1 billion line of credit granted by India during Sheikh Hasina’s visit to India were under implementation. He said India has already approved six projects and at least five other projects, including supply of rail wagons and dredgers, are also expected soon. Dismissing criticism of delay in implementing these projects, he said both sided were working to firm up administrative procedures.

Issues relating to security and counter-terror cooperation figured prominently in the discussions. “Both countries recognise the importance of cooperation in the field of security and are determined to jointly combat the menace of insurgency, militancy and terrorism. Our leadership has been in agreement that the territory of either would not be allowed for activities inimical to the other,” said Krishna.

When asked about India’s demand for sending the outlawed ULFA leader Anoop Chetia, who has served out his sentence in Bangladesh, back, Moni said her government would whole-heartedly address security concerns of New Delhi but declined to name any individual. We have reiterated to Krishna our unequivocal stand against terrorism in all its forms and manifestations.”

Saying negotiations for interim sharing of Teesta and Feni river waters and the talks for the resolution of the boundary issue were making considerable progress, Krishna reaffirmed that India attaches “the highest importance” to its relations with Bangladesh and sought a deeper and stronger partnership.

Moni said Bangladesh has agreed to India’s proposal for joint border management, which would be followed by the Border Guard Bangladesh and the Border Security Force identifying “sensitive” stretches along the border. The two sides are working to finalise the plan at an early date, Moni added.

The two countries have undertaken a joint survey of the enclaves under adverse possession of the two sides and are expected to reach a “pragmatic” agreement taking into account the ground realities, she said.