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India invites Bangladesh as a guest country during its G-20 presidency

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  • Published
    3rd Dec, 2022


 Out of all of India’s neighbours, the Indian government has invited only Bangladesh as one of the 10 guest countries during its Presidency of the G20.

The message in the invitation

  • The Invitation shows the growing importance of Bangladesh as one of the world’s fastest-growing economies.
  • Bangladesh is going to share its experience with other member states on climate change.
  • On Import of Russian Crude: Russian crude is not suitable for Bangladesh refineries. So, they are going to discuss importing refined products and Russian LNG.

India’s Relation with Bangladesh:

About Bangladesh Economy:

  • Bangladesh is the 41st largest economy.
  • It is going to be the 32nd largest by 2030.
  • Bangladesh to grow 6.9% in 2022-23: World Bank
  • UN approved Bangladesh to graduate from Least Developed Country (LDC) status by 2026.
  • Economic Ties: Bangladesh is the 6th largest trade partner of India.
  • India has provided duty-free quota-free access to Bangladesh on all tariff lines except tobacco and alcohol under the South Asian Free Trade Area (SAFTA) since 2011.
  • Sharing of River Waters: Both nations share 54 common rivers. 1996, the Ganga Waters Treaty was signed.
    • Most recently, the Kushiyara Pact was signed.
  • Connectivity: India and Bangladesh share 4096.7 Km. of the border, which touches Assam, Tripura, Mizoram, Meghalaya, and West Bengal.
  • The Bandhan Express was the second train to be flagged off after the introduction of the Maitree Express between Kolkata and Dhaka Cantonment in April 2008.

International Forums where India and Bangladesh are Common Members

  • South Asian Association for Regional Cooperation (SAARC)
  • Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)
  • Indian Ocean Rim Association for Regional Cooperation (IORA)
  • Power and Energy Sector Cooperation: Energy sector cooperation between India and Bangladesh has also seen considerable progress in the last few years.
  • High-speed diesel (HSD) pipeline: The Indo-Bangladesh friendship pipeline carrying High-Speed Diesel from the Numaligarh refinery in India to Bangladesh is expected to be completed soon.
  • Rooppur nuclear power: India is funding the project under a LOC (Line of Credit) for the distribution, of the transmission lines, alongside Bangladesh’s funding.
  • Godda Power Project in Jharkhand state will provide a dedicated transmission line for the exports
  • Tourism: Bangladesh accounted for the largest share of foreign tourist arrivals in India in 2020, including tens of thousands of people who come to the country for medical treatment.
  • Defense and Security: The militaries of the two countries will conduct joint exercises and training, Exercise Sampriti and Navy (Exercise Milan).

Significance of Bangladesh for India

Major Issues Between India and Bangladesh:

Strategic location

Connectivity to East Asia

Countering China

Trade- Bangladesh is currently India’s biggest trade partner in the South Asian region.

  • Teesta River Water Dispute
  • illegal Migration
  • Drug Smuggling & Trafficking
  • Terrorism, rising radicalization
  • Rohingya Issus
  • Increasing Chinese footprint

Defining characteristics of Bangladesh's Economy:

  • Growing consumer demand: The increase in spending, which reflects the growing consumer demand comes from the middle and affluent classes.
  • Ninth-largest domestic consumer market: Bangladesh is set to become the ninth-largest consumer market in the world.
  • Outpacing major Asian peers: With an average annual economic growth of 6.4 percent between 2016 and 2021, Bangladesh, has outpaced major Asian peers such as India, Indonesia, Vietnam, the Philippines, and Thailand.
  • High Consumer optimism: This vital optimism kicked off the virtuous cycle of high growth which Bangladesh has experienced over the last decade.
  • Higher GDP per capita: Despite graduating five years later to Low- and Middle-Income Countries (LMIC) status versus India, the GDP per capita is already higher than its regional peer.

What went right for Bangladesh?

  • Played to its strength: It relied on global low-skill exports-readymade garments-in line with its share of working-age people among poor countries.
    • If we draw a relative comparison with India, we notice that India went for high-skilled software, business process outsourcing, and finance, benefiting a tiny fraction of its 1 billion-person-strong workforce.
  • Employment generation: Bangladesh generated three times more employment from every 1% of output growth than India between 2010 and 2018.
  • Pulling workers out of subsistence agriculture: Bangladesh has been nearly twice as successful as India when it comes to pulling people out from engaging in subsistence farming.
    • While doing the same, India was not able to employ surplus labour in the modern sector with high productivity growth.
  • Women Participation: Women's participation in its workforce, while still low at 35%, is rising, compared with the abysmal situation in India, where it’s 21% and falling.
    • This has been reflected in the Gender Gap Report 2022. Bangladesh secured the 71st position in the overall tally of the report.
  • Micro-Credit programmes Operations: The world’s most successful and pioneering microfinance organizations like Grameen and BRAC have aided small businesses in the country.
    • Grameen Bank won the Nobel Peace prize along with its founder Muhammad Younus in 2006 for their efforts to create economic and social development.

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