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Economic and Environmental Diplomacy: India’s Rail and Teesta Projects in Bangladesh

Prime Minister Sheikh Hasina’s recent visit to Delhi has led to significant agreements between Bangladesh and India, including the provision of ‘Rail Transit and Corridor’ for India and India’s participation in the ‘Teesta Restoration’ project. These developments have sparked intense debate in Bangladesh, particularly among the opposition BNPO, which has criticized the government. Despite this, India remains optimistic that these initiatives will bring mutual benefits to both nations.

 Rail Transit Agreement

India has articulated that the rail transit agreement aims to enhance ‘multidimensional’ connectivity between the two countries. The initiative is designed to integrate the transportation networks of India and Bangladesh more closely, thereby facilitating the smoother and more efficient movement of goods and people. This rail link is expected to not only streamline trade routes but also significantly reduce transit times and costs, benefiting the economies of both nations. The agreement aligns with India’s broader strategic vision of enhancing regional connectivity and fostering economic integration within South Asia.

Indian and Bangladeshi leaders, including Prime Minister Narendra Modi and Prime Minister Sheikh Hasina, have historically maintained good relations, fostering cooperation on such projects. This strong bilateral relationship has been instrumental in driving forward initiatives that require mutual trust and collaboration. The personal rapport between the two leaders has often translated into tangible policy outcomes, reinforcing the importance of diplomatic goodwill in international agreements. Their commitment to enhancing connectivity is seen as a testament to their shared vision of regional prosperity and development.

Apart from the economic benefits, the rail transit agreement is also expected to strengthen people-to-people ties between India and Bangladesh. Increased connectivity will likely lead to greater cultural and social exchanges, fostering a deeper understanding and appreciation between the citizens of both countries. This enhanced interaction can help in building a more robust and resilient bilateral relationship, creating a foundation for sustained cooperation in various other sectors. The success of the rail transit project will depend on meticulous planning and execution, addressing technical, security, and logistical challenges through a collaborative approach.

 Economic and Social Impact

India asserts that the rail transit will boost economic and social ties by facilitating smoother and more efficient transportation of goods and people. By creating a direct rail link through Bangladeshi territory, the agreement aims to reduce logistical barriers and transit times, thereby lowering the cost of trade. This is expected to make Indian and Bangladeshi products more competitive in regional and global markets, fostering economic growth in both countries. Improved transportation infrastructure can also attract investment, stimulate local industries, and create job opportunities, contributing to broader economic development.

The proposed rail link, running from one part of India to another through Bangladeshi territory, is expected to enrich both economies. For Bangladesh, the transit agreement offers potential revenue through transit fees and the development of ancillary services such as logistics and warehousing. Additionally, the increased rail traffic can spur infrastructural improvements and modernization within Bangladesh’s railway network, benefiting its domestic transportation system. Enhanced connectivity can also promote regional trade by facilitating easier access to markets in Southeast Asia, thus integrating both economies more deeply into global supply chains.

Indian Foreign Secretary Vinay Mohan Kwatra emphasized that this initiative is part of a broader strategy to strengthen bilateral connectivity through physical, digital, and other means. Beyond economic benefits, the project is anticipated to foster stronger social ties by enabling greater mobility and cultural exchange. Increased interaction between the populations of India and Bangladesh can lead to a better understanding and appreciation of each other’s cultures, promoting peace and stability in the region. The success of this project can set a precedent for future collaborative ventures, demonstrating the positive impact of cooperative efforts on regional development.

Technical and Security Considerations

There are several technical aspects yet to be finalized, including tolls, duties, and security measures for trains passing through Bangladesh. These details are crucial for ensuring the smooth operation of the rail transit system and addressing the concerns of both countries. The determination of tolls and duties will require careful negotiation to ensure that the benefits are equitably distributed and that the costs are manageable for businesses relying on this transit route. Similarly, security measures will need to be robust to protect passengers and goods, and to ensure the safe passage of trains through Bangladesh.

A technical committee comprising members from both countries will deliberate on these details. This committee will be responsible for resolving the operational challenges and setting the standards for the rail transit system. Their discussions will cover a wide range of issues, from the technical specifications of the railway infrastructure to the legal frameworks governing the transit. The committee will also need to address logistical concerns, such as the scheduling of trains and the management of cross-border rail traffic. Effective coordination between the Indian and Bangladeshi authorities will be essential to ensure that the rail transit operates smoothly and efficiently.

During a regular briefing, Indian Ministry of External Affairs spokesperson Randhir Jaiswal highlighted the project’s potential to foster trade and people-to-people relationships, stressing that specific operational details will be determined by the joint technical committee. Jaiswal emphasized the importance of this project in strengthening bilateral ties and enhancing regional connectivity. By addressing the technical and security considerations through a collaborative approach, India and Bangladesh can ensure the successful implementation of the rail transit agreement. This cooperation not only promises economic benefits but also serves as a model for future cross-border infrastructure projects in the region.

Teesta Restoration Project

India has also pledged to collaborate with Bangladesh on the Teesta Restoration project, aiming to conserve and manage the river’s waters. This initiative is crucial for both countries, as the Teesta River is a vital water source for irrigation, drinking water, and ecological balance in the region. Effective management of the Teesta’s waters is expected to enhance agricultural productivity, support livelihoods, and improve water quality, thereby contributing to sustainable development goals. The project underscores the importance of transboundary water cooperation in addressing shared environmental challenges.

This initiative has faced internal opposition within India, notably from West Bengal Chief Minister Mamata Banerjee, who has warned against any water deal that might compromise her state’s interests. Banerjee’s concerns stem from the fact that West Bengal relies heavily on the Teesta’s waters for its own agricultural and domestic needs. Any agreement perceived as reducing the state’s water allocation could potentially impact its farmers and local communities. Her opposition highlights the complex interplay of regional and national interests in India’s water diplomacy and the challenges of balancing internal political pressures with international commitments.

Despite these challenges, the central government in India remains committed to the Teesta Restoration project. This commitment is driven by the recognition of the project’s long-term benefits for regional stability and cooperation. By working with Bangladesh to restore and manage the Teesta River, India aims to build a framework for joint water governance that can serve as a model for other shared rivers in South Asia. The success of this project will depend on careful negotiation and a willingness to find mutually beneficial solutions that address the concerns of all stakeholders involved. Effective collaboration on the Teesta can enhance bilateral relations and demonstrate the potential for cooperative water management to foster peace and development in the region.

 Political Dynamics

Despite objections from regional leaders like Mamata Banerjee, the Indian central government remains committed to the Teesta Restoration project. The central government views this project as pivotal not only for environmental and economic reasons but also for strengthening bilateral relations with Bangladesh. Maintaining a cooperative stance on water-sharing agreements is seen as essential for India’s broader strategic interests in South Asia. This commitment underscores the central government’s resolve to balance regional interests with national and international priorities, even in the face of significant internal opposition.

Observers in Delhi and various think tanks believe that implementing these initiatives may require India to offer significant concessions to Bangladesh. These concessions could include facilitating trade with Nepal and Bhutan through Bangladeshi routes, which would enhance regional trade connectivity and economic integration. Additionally, there is speculation that India might need to modify the financial terms of the Teesta project, potentially converting loans into grants. Such a move would alleviate Bangladesh’s financial burden and demonstrate India’s willingness to invest in long-term, mutually beneficial projects.

By making these concessions, India aims to ensure the successful implementation of the Teesta Restoration project and other bilateral initiatives. This approach reflects a broader strategy of fostering regional cooperation and stability through proactive diplomacy and strategic investments. The central government’s determination to move forward with these projects, despite regional resistance, highlights its commitment to enhancing India’s role as a regional leader. Successful implementation of the Teesta project could pave the way for future collaborations on transboundary water management and other critical issues, thereby strengthening the overall relationship between India and Bangladesh.

Diplomatic and Strategic Outlook

Indian government officials have largely downplayed the domestic opposition in Bangladesh, emphasizing the long-term benefits of such projects. They argue that these initiatives will ultimately foster economic growth, improve connectivity, and enhance regional stability. The Indian government is confident that the strategic advantages of these projects outweigh the initial resistance, believing that the positive outcomes will gradually win over critics. By focusing on the broader benefits, Indian officials aim to maintain momentum and support for these initiatives, both domestically and internationally.

Historically, many Indo-Bangladesh initiatives have faced initial resistance but have eventually been implemented successfully through governmental goodwill. For instance, previous projects such as the Land Boundary Agreement and various trade pacts encountered opposition yet succeeded due to persistent diplomatic efforts and mutual understanding. These past successes serve as precedents, demonstrating that with sustained dialogue and cooperation, even contentious projects can be brought to fruition. The Indian government is leveraging this historical context to assure stakeholders that current initiatives will similarly yield positive results.

The strategic outlook for India involves using these projects to strengthen bilateral relations and promote regional integration. By investing in infrastructure and water management projects in Bangladesh, India aims to build a foundation of trust and cooperation that can extend to other areas of mutual interest. This approach aligns with India’s broader foreign policy objectives of enhancing regional connectivity, fostering economic interdependence, and ensuring stability in South Asia. The success of the rail transit and Teesta Restoration projects will not only benefit India and Bangladesh but also set a benchmark for regional collaboration, showcasing the potential for diplomacy to drive sustainable development and peace.

 Official Statements

Indian Foreign Secretary Vinay Mohan Kwatra outlined the benefits of both projects after the meeting between the two Prime Ministers on June 22. He emphasized that these initiatives are integral to enhancing the economic and strategic ties between India and Bangladesh. Highlighting the collaborative spirit of both nations, Kwatra remarked that these projects signify a new chapter in bilateral relations, marked by mutual cooperation and shared goals. He pointed out that the rail transit agreement and the Teesta Restoration project are poised to bring substantial benefits to the people and economies of both countries.

Kwatra noted that trial runs of freight trains on the new railway link would commence in July, underscoring the project’s imminent operational phase. This trial phase is a crucial step toward full-scale implementation, allowing both countries to address any logistical and technical issues that may arise. By initiating these trial runs, India demonstrates its commitment to swiftly operationalize the rail transit project, which promises to streamline trade routes and facilitate more efficient transportation of goods. The commencement of trial runs also signals to stakeholders that the project is progressing as planned, bolstering confidence in its eventual success.

In his statements, Kwatra also addressed the Teesta Restoration project, reiterating India’s commitment to sustainable water management and environmental conservation. He emphasized that the project is designed to benefit both nations by ensuring better water resource management, which is vital for agricultural productivity and ecological balance. By collaborating on the Teesta project, India and Bangladesh aim to set a precedent for joint management of transboundary rivers, promoting a model of cooperation that can be replicated in other regions facing similar challenges. Kwatra’s remarks reflect a broader strategic vision of fostering regional stability and development through collaborative efforts.


The agreements on rail transit and the Teesta Restoration project represent a significant step in enhancing bilateral relations between India and Bangladesh. Despite political opposition in both countries, the Indian government is confident that these projects will benefit both nations economically and socially. The successful implementation of these initiatives will depend on careful negotiation and cooperation, particularly concerning technical, financial, and security details.


– India’s Ministry of External Affairs official briefings and statements.

– Statements and positions from key Indian and Bangladeshi political figures.

– Observations from think tanks and researchers in Delhi.

Billal Hossain
Billal Hossain
Billal Hossain, a seasoned professional with a Master's degree in Mathematics, has built a rich and varied career as a banker, economist, and anti-money laundering expert. His journey in the financial sector has seen him in leading roles, notably in AL-Rajhi Banking Inc. in the Kingdom of Saudi Arabia and as Foreign Relations and Correspondent Maintenance Officer of Bank-AL-Bilad. Beyond the confines of traditional finance, Billal has emerged as a prominent writer and commentator, contributing thought-provoking columns and theses to various newspapers and online portals. His expertise spans a wide range of important global issues, including the complexities of economics, political dynamics, the plight of migrant workers, remittances, reserves, and other interrelated aspects. Billal brings a unique analytical perspective to his writing, combining academic rigor with practical insights gained from his banking career. His articles not only demonstrate a deep understanding of complex issues but also provide readers with informed perspectives, bridging the gap between theory and real-world application. Billal Hossain's contributions stand as a testament to his commitment to unraveling the complexities of our interconnected world, providing valuable insights that contribute to a broader and more nuanced understanding of the global economic landscape.


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