Nepal-Bangladesh Relations: Beyond Bilateralism

Nepal was the 7th country on the planet to discover the independence of Bangladesh on January 16, 1972. Both countries founded formal diplomatic ties on April 8, 1972. Both countries are also the founding associates of the South Asian Association for Regional Cooperation (SAARC) and member of the United Nations, contributing to UN Peace Keeping Missions world-wide and various other regional frameworks.

With a great zeal to improve the bilateral cooperation, Bangladesh opened its full-fledged Embassy in Kathmandu on October 3, 1971, and Nepal opened its Embassy in Dhaka in 1976. From the first days and nights, Nepal and Bangladesh possess preserved cordial relations and expanded support in regional, multilateral, and sub-regional cooperation. For example, Nepal and Bangladesh happen to be active associates of the Bay of Bengal Initiative for Multi-Sectoral Complex Cooperation (BIMSTEC), and Bangladesh, Bhutan, India, Nepal Initiative (BBIN)- a sub-regional grouping body system in the region.

Trade, transit and monetary ties

Soon after getting into formal diplomatic ties, Nepal and Bangladesh signed a Trade, Transit and Repayments Agreements in 1976. The Bangladesh authorities had likewise allowed Nepal six transit factors for access and exit for trade functions through Bangladesh. On the other hand, till date, it has not become wholly efficient. Bangladesh had presented Nepal the utilization of the Chittagong and Mongla Port in 1997 after opening the Kakarvitta-Phulbari-Bangabandhu way with additional rail route to Nepal Rohanpur in Bangladesh to Singhabad India, but Nepal is but to utilize them despite Nepalese traders having proven deep interest.

In 2015, Primary Minister KP Oli announced foreign trade through Bangladeshi ports because of border problems with India. Nepal and Bangladesh experienced also signed an Agreement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion regarding taxes on income on March 5, 2019. Until 2014, the bilateral trade was in favour of Nepal, but with a fall in the export of lentils from Nepal, an eventual trade deficit was observed. There is an export of NPR 954 million and an import of NPR 5.29 billion in 2019-2020. The two have done well in joint-ventures set up of Nepal-Bangladesh Lender Limited. The IFIC Lender (Bangladesh) possesses 40.91 percent shares, and it is one of the biggest FDIs from Bangladesh in Nepal. As the progress is slow, the two economies contain the potential to develop cooperation in years to come.

Power and connectivity

With a growing professional base, Bangladesh has emerged as an energy-hungry nation. Nepal is among the top investment places for Bangladesh for the buy of 9,000 MW power by 2040. It has recently pledged USD 1 billion for Sunkoshi II Hydroelectricity Electric power Plant with 1,110 MW ability and Sunkoshi III with 536 MW capacity. Through the Nepal Expense Summit in 2017, PRAN-RFL a respected conglomerate of Bangladesh pledged USD 2.4 billion for the meals and infrastructure sectors in Nepal. Nevertheless, an unstable political scenario in Nepal has maintained the investors hesitant.

Bangladesh is awaiting the Bilateral Investment Protection Agreement (BIPPA) with Nepal, which may see a short investment of USD 3 billion together. It'll be the most important single country purchase to help with making a trade surplus with Bangladesh through electric power trade. Nepal could also turn into a net energy supplier to Bangladesh, applying the Indian transmission lines for the border trade, which India possessed already agreed upon. In this regard, Bangladesh has signed an MoU with India to buy 500 MW power at NPR 7.71 per unit for 25 years.

Bangladesh can be keen in developing the waterways terminal in landlocked Nepal, allowing it again sea gain access to with the Bay of Bengal in collaboration with the federal government of Nepal. During the tenure of Bangladeshi Ambassador to Nepal Mashfee Binte Shams, there is significant debate with the Bangladesh Inland Normal water Transport Authority (BITWA). Similarly, the leading exclusive waterways terminal operator from Bangladesh, Summit Alliance Ports Limited, has displayed interest to build up Terminals in Koshi and Narayani River. The Bangladesh government is also thinking about connecting Nepal through their railways connectivity via India till Kakarvitta and Biratnagar for cost-powerful trade. Ambassador Mashfee Binte Shams was quite definitely vocal for the timely execution of BIN Motor Vehicle Agreements, but it cannot materialise. Also through the tenure of Ambassador Shams, Nepal Bangladesh Business Discussion board (NBBF), an total annual bilateral forum was created in 2016 in collaboration with AIDIA with the only real objective of promoting trade , business and investments in both countries. There is a realisation within the individual sectors that BIN could be a game-changing system for Nepal to gain access to Bangladesh and South East Asia's connectivity through Myanmar, so Nepal has to ratify the contract immediately.

Apart from trade and expense, Nepal and Bangladesh can join hands as well as Indian railways and waterways authorities in the trilateral agreements for the rail and waterways development in the sub-region. It will enable better connectivity with the purpose of easy, free motion for cost-effective trade. BIN can form the Hindu and Buddhist circuit for the sub-regional spiritual tourism as Bangladesh possesses both Hindus and Buddhists like Nepal and India. Bangladesh is a fresh "Tiger" in Asia, overlapping the Indian economy because of its growing garments sector recently. However, Bangladeshi garment sectors are yet to start to see the potential in Nepal as market. Nepal should think of establishing Bangladeshi garment sectors in its territory to utilize the Distinctive Economic Zones effectively. Pharmaceuticals is normally another potential level of cooperation as Bangladesh has got plants in the US, North America and the Middle East.

In 2019, Bangladesh president's goodwill visit to Nepal and a visit by the Nepalese Foreign Minister Pradeep Kumar Gyawali to Dhaka in February 2020 was focused broadly on multimodal transport connectivity, investments in the power sector, improvement of the bilateral trade and developing the infrastructure facilities in the border areas. Meanwhile, the slow speed of progress is yet to exploit the full potential of this great bonhomie between Nepal and Bangladesh. As a promising FDI spouse for Nepal and connectivity gateway for foreign trade, Bangladesh will help Nepal in tapping into the global work at home opportunities. Meanwhile, Primary Minister Sheikh Hasina's new commitment to aid Nepal with the way to obtain 50,000 MT of Urea in a critical shortage period shows goodwill between the two countries. Therefore, company commitments with an excellent desire in improving our  bilateral ties with a much better and more hopeful potential shall be the way forward. In this light, the Nepalese president's approaching goodwill trip to Bangladesh planned for March 22- 24 would be a milestone in taking ahead the bilateral ties to a greater height.

Sunil KC is LEADER of Asian Institute of Diplomacy and International Affairs (AIDIA), a good Kathmandu based foreign coverage think-tank.