Tatas to benefit from removal of ban on Bangladesh FDI

Chennai: The $3-billion investment proposal of the Tata group in the power, steel and fertiliser sectors in Bangladesh is closer to reality because of India’s decision to lift the ban on Bangladeshi investment into India.

That Bangladesh was not allowed to invest in India while India wanted to invest in that country had been a “sore point in the bilateral relationship between the two nations”, according to the Union Minister of State for Commerce and Industry, Mr Jairam Ramesh.

Mr Ramesh told Business Line that it was “hypocritical on the part of India” to push for Tata investment while not allowing Bangladesh to invest in India. He said that there were rich possibilities of Bangladesh investing in India, especially in the North East, in areas such as food processing, textiles and bamboo-related industries.

He said that India’s proposal to develop the Sitwe project did not imply that the country thought it could develop the North East ignoring Bangladesh.

“Logistics-wise the Sitwe project is very good, but we cannot operate on the assumption that we can develop the North East ignoring Bangladesh,” he said, adding that Bangladesh, India’s North East, Myanmar and Thailand formed a “growth quadrilateral”.

Noting that along the 1,600-km border with Myanmar, the only border trade post was Morah in Manipur, Mr Ramesh said that India was in talks with Myanmar to open border trade with Myanmar at two more points — Pangsau in Arunachal Pradesh, Zokhawthar in Mizoram.

“Right now, our notion of border trade is that the trade is restricted to a list of goods. For example, at Nathu La, there are only 37 items that can be traded. In Morah, there are only 22 items that can be traded. We must get out of this restrictive approach of border trade and move to a more liberal trade at border. Of course, our security establishment is not very comfortable with this concept because it feels it could be used by China to dump its goods.”

The goodwill generated by India developing the Sitwe port would put India in a favourable position to win oil and gas exploration/production blocks.

Asked if US or China might oppose India developing the Sitwe project, Mr Ramesh said, “Undoubtedly we cannot minimise the possibility that there will be sometimes overt, sometimes covert opposition to our enhanced relations with Myanmar. I’m sure will be attacked by human rights groups. It is a fine line that we have to tread.”