Indian envoy highlights Indo-Bangla energy connectivity as Dhaka prepares to receive Chinese team for trade talks

Cross-border electricity trade in southern Asia depends on robustness of Indian grid, power trading platforms; if Bangladesh clinches its FTA with China, it will be able to do business with China in yuan

Updated - July 03, 2024 07:05 am IST

Published - July 03, 2024 06:39 am IST - NEW DELHI

Indian envoy Pranay Verma with Bangladesh PM Sheikh Hasina.

Indian envoy Pranay Verma with Bangladesh PM Sheikh Hasina. | Photo Credit: AFP

Days ahead of Bangladesh Prime Minister Sheikh Hasina’s upcoming visit to China, India’s envoy to Bangladesh Pranay Verma has identified ‘energy connectivity’ as a key pillar of the “transformative changes” that are shaping the India-Bangladesh relationship.

Speaking at an event in Dhaka on July 2, Mr. Verma said that the regional electricity trade between India, Bangladesh, Nepal, and Bhutan would mark a “paradigm shift” in the quest for energy security in South Asia.

Also Read: Sheikh Hasina’s re-election and the growth of India-Bangladesh relations | Explained

The High Commissioner described energy connectivity as a “hallmark of transformative changes”. Cross-border power “transmission lines are not only bringing power from India to Bangladesh, but also facilitating power transmission from Nepal to Bangladesh through India,” the State-owned news outlet BNS quoted him as saying.

“In his address, the High Commissioner emphasised that the robustness and integrated nature of the Indian grid, together with sophisticated platforms for power trading and exchanges existing in India, offer great opportunity to its neighbours to join each other through the Indian grid for seamless cross-border electricity trade,” the BNS has reported.

FTA talks

Mr. Verma was speaking at a regional workshop on “Transforming Cross Border Electricity Trade and Regional Electricity Market for an Energy Secure South Asia”, jointly organised by the Research and Information System for Developing Countries and the USAID’s South Asia Regional Energy Partnership (SAREP).

The  conference, being held days after Prime Minister Sheikh Hasina returned from her trip to India, took up the agreements reached during the visit and presented them as markers for the evolution of bilateral ties in the coming months. India and Bangladesh resolved to start negotiation on a Free Trade Agreement during Ms. Hasina’s tour.

Doing business in yuan

July 3rd’s discussion in Dhaka also shed light on a landmark trade deal that Beijing is aiming to conclude with Bangladesh. State Minister of Commerce Ahsanul Islam Titu on July 3 announced that a joint feasibility study for a Free Trade Agreement between Bangladesh and China has already been concluded. “A team from the Chinese Exim Bank is coming to Dhaka today or tomorrow to discuss a $5 billion trade facility and this issue may also be discussed during the Prime Minister’s visit to China,” Mr. Titu told journalists.

Once concluded, this agreement will enable Bangladesh to conduct business with China in Yuan, thereby creating greater space for the Chinese currency in the second largest economy in South Asia.

Ms. Hasina will embark on a four-day visit to China from July 9, which will be her first visit to a country outside South Asia since taking charge in January. She had travelled to India on June 9 for the swearing-in ceremony of Prime Minister Narendra Modi and followed up with a state visit to New Delhi during June 21 and 22.

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