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$500 Million Indian LoC,My Two Cents

February 26, 2017

Indian foreign secretary Jaishankar Subrahmanyam paid a brief visit to Bangladesh.

The visit was about to transmit Indian PM Modi’s invitation to PM Sheikh Hasina for a state visit to  India.

At the same time the visit finalized some areas of bilateral cooperation, among them a $500 million line of credit for the purchase of defense article has drawn lot of media coverage.

Press here reported ” the countries expressed satisfaction at the progress of existing cooperation between the two countries and agreed to deepen the cooperation across some new and innovative areas.”

Defense cooperation, arms sale to be more precise, stands out to be this new area of cooperation. Reports published in the local press indicate that Bangladesh Army had a discussion on Indian Line of Credit at corps commanders’ meeting or at any other level and nodded positively towards that proposal.

The effort is however not welcomed by all the quarters. A senior  BNP advisor expressed his concerns over such deal.

According to a defense blog close to Army, Bangladesh recently finalized a defense policy. What is in it is not yet ascertained. A Forces’ Goals , basically a shopping list, is already in place.

This supplier’s credit could be used to meet the existing need of this list. Or it may create “new needs”.
For instance, India is keen to take part in equipping  Bangladesh Coast  Guard. This credit could come in handy to meet this goal.

Information gleaned from media reports indicates that $500 million supplier’s credit needs to be spent on purchasing defense articles produced by Indian state-run producers like Bharat Electronics Limited (BEL), Garden Reach Ship Builders and Engineers Limited.

BEL already provided Bangladesh  Navy a hull mounted sonar for evaluation.

From the previous arms sale we have got an idea about the possible list of shopping. In 2015, India had offered Brahmos missile to Bangladesh Navy as a coastal defense system.

In recent years, Bangladesh has diversified its sources of defense procurement. India could become another such potential source.

However the path to cooperation is strewn with too many setbacks. Harboring separatists of other country, border killing, drug smuggling, human trafficking and cross-border terrorism impair bilateral relationship.

Even Bangladeshi PM’s scheduled visit to India was delayed because of a terror incident.

Holey Artisan Bakery attack was hatched in India and arms used in that attack had been made in India. Clearly, Bangladesh is the victim of cross-border terrorism, a term India  uses against Pakistan.

Moreover, a group of foreign buyers were murdered there, tarnishing country’s image abroad and frightening foreign buyers.

Since the Dhaka Café Attack, RMG buyers have been holding business meeting abroad.

Being a competitor of Bangladeshi RMG items India cannot brush aside   the allegations against it.

Another key point needs to be taken into account is that this offer came to a moment when  Chinese and Russians are pouring arms into Bangladesh. Quick urge to reach out rather than deep thinking played a role behind India’s defense  cooperation offer.

India needs to flesh out the nature and scope of this defense cooperation.

Despite the fact that two countries made giant leaps towards establishing regional connectivity, strained relationship is yet to be thawed.

Prior to Jaishankar’s visit , defense minister Manohar Parrikar and BJP spokesman MJ Akbar visited Bangladesh in a bid to persuade Bangladeshi PM to visit India. Those  were abortive missions.

Media reports indicate that PM may visit India in mid April.

Indian current administration is not contributing to construct a conducive atmosphere that will bolster bilateral tie.

Objectionable comments were made.Sometimes  the comments were costly and did a lot of damage to the relationship.

For instance, Manohar Parrikar said Indian soldiers had gifted Bangladesh to us in 1971, completely ignoring the valiant roles of millions of Bangladeshis during the liberation war.

Controversial statement also wrecked havoc to this relationship  and rang alarm bell about Modi administration. During his election campaign Modi said he would made a list of Bangladeshis living illegally there. The list never came into being and Modi did not retract the comment.

National Security Adviser Ajit Doval at a private university in Delhi publicly admitted India has the capability to destabilize Pakistan using subversive means. The video of the address went viral on Pakistani defense blog and social media groups.

Former Research and Analysis Wing chief AS Dulat in his memoir “Kasmir: The Vajpayee Years” acknowledged that India used terror outfits for the sake of its national interests.

Soon after assuming office Modi sent aclose journalist to Pakistan to meet Hafij Saeed , chief of Jamaat ud Dawah, which is deemed no 1 threat to India.

By making such comments whose purpose is Modi administration serving?

Bangladesh should wait till a reshuffle takes place in Modi administration.

This administration is not like the Vajpayee –Brajesh administration , whose ambition matched with their intellectual ability. Nor is it like the one of Mr Manmohan Singh who got his strategic calculations right and never conceded anything to India’s rivals.

India’s effort in combatting terrorism should also come under close scrutiny when we are considering to deepen defense ties.

Al Qaeda In Indian Subcontinent’s current chieftain Asim Umar is an Indian national who grew up in Uttar Pradesh.

India is one of the key suppliers to Islamic State.

What could we construe from this? Is India less capable to curb terrorism?

We have to keep in mind that on several occasions India reneged promises to strengthen bilateral tie.

It still slaps non-tariff barriers to Bangladeshi goods to cripple Bangladeshi exports.

It’s internal politics still casts a shadow on the fate of Teesta water sharing agreement.

Unless India takes on an emollient stance by delivering what it promised earlier, the possible defense cooperation could be an uphill task.

Burden of moulding ties should be left to the private sector. Indian private arms manufacturers can open office and production facility here.

In Bangladesh defense article production and procurement are reserved for the state. We should update our defense laws so that private sector can curve out a niche in the protected defense sector.

There is no doubt that the two country should come together in the area of defense cooperation. But $500 million line of credit is a costly deal to start with. Because at the end of the day Bangladesh has to repay the debt along with interest. And such credit offer is not free from corruption allegations. Rather Bangladesh can accommodate Indian arms suppliers to its existing procurement programs.

We exactly do not know what prompted Delhi to come up with this $500 million line of credit.

The offer came at a moment when Delhi and Beijing are vying for regional dominance.

At the same time it came at a moment when Bangladesh is healing from the country’s worst terrorist attack, which was plotted in Indian soil and remains an example of cross-border terrorism.

Maybe Indians were unable to detect these perpetrators.But Bangladesh is a victim of cross-border terrorism here. Bangladesh should seek greater market access to India and removal of non-tariff barriers.

Unless Bangladesh’s grievances are addressed this kind of defense cooperation will not hold secured perch on bilateral relations.


From → Analysis

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