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Bangladesh textiles get a boost

By Nantoo Banerjee

A diplomatic bungle due to New Delhi’s casual approach towards building a strong relationship with Bangladesh drowned its biggest economic gesture to India’s important eastern neighbor that opened up the country’s $60-billion-plus textile and knitwear market to competition from Bangladesh at a huge risk to the domestic industry. Instead, the postponement of the proposed Teesta river water sharing agreement became the biggest talking point among politicians, political analysts and opinion leaders in both the countries. The Indo-Bangla trade pact, a big give-away from Prime Minister Manmohan Singh to the Bangladesh government to benefit the Bangladeshi textile industry and millions of people connected with it, got buried under a failed Teesta water sharing arrangement, the import of which is both theoretical and technical making its future outcome rather hazy in terms of on-ground reality.

The Teesta is a shrinking east Himalayan range river, which also serves as a tributary to the mighty Brahmaputra in Bangladesh. There should have been no dispute over Bangladesh’s right to Teesta water. However small, the Teesta, mostly rain-fed, is an international river. The under-construction Teesta barrage at north Bengal on the Indian side threatens to constrict water flow into Bangladesh especially through the lean summer months. Bangladesh is naturally worried. Fifty-one years ago, when India started building the gigantic Farakka barrage, also in West Bengal, Pakistan, then a ruler of the present Bangladesh, too was worried and insisted on a Ganga water sharing agreement.

While the Farakka barrage took years to complete, it was only after the liberation of Bangladesh that the India government officially agreed to share a good portion of Ganga water from the barrage with Bangladesh during the lean summer months as a friendly gesture to the country’s first elected Prime Minister, Sheikh Mujibur Rehman. The pact was promptly withdrawn after his assassination and the junta rule in Bangladesh. However, in 1977, Prime Minister Morarji Desai agreed to sign a five-year water sharing treaty with Bangladesh, which expired in 1982. For the next 14 years until December 12, 1996, Bangladesh had to remain satisfied with ad hoc Ganga water sharing arrangements.

It may just be an irony that another non-Congress Prime Minister, H D Deve Gowda was prepared to walk miles to please Prime Minister Sheikh Hasina Wajed, the daughter of the slain Bangladesh liberator Sheikh Mujibur Rehman, with a 30-year Ganga water sharing agreement recognizing Bangladesh’s right as a lower level riparian. Although the pact is valid till the end of 2026, the water flow through Ganga right from its source in the Himalayas has considerably shrunken primarily due to the shrinking glacier in the mountains and subsequent dams built in the upstream, including Tehri. The Farakka barrage has failed to realize most of its key goals – to feed agriculture, control flood, ensure minimum water supply requirement of the Calcutta port, improve the navigational channel of the river Hooghly for ocean-bound cargo ships and meet local industrial needs such as those of the NTPC’s super thermal power station at Farakka itself. The shrinking water flow is affecting Bangladesh as well.

The outcome of the Teesta barrage could be much worse. The sharing of anything tangible with one or more depends on its availability. If the small Teesta goes the giant Ganga way, its future water sharing prospect would look pretty dim at both ends, West Bengal and Bangladesh. What may ultimately survive are only the dry technical and theoretical aspects of a Teesta treaty in the government archives of India and Bangladesh. The changing climatic condition and weather will be the final deciding factors. It took 36 years of bilateral efforts by India and Bangladesh to ink a reasonable Ganga water sharing treaty between the two countries. Therefore, the initial hitches and glitches in the Teesta treaty should not be over-blown and entirely unexpected. Unfortunately, international water sharing agreements always carry political overtones everywhere. Right now, India itself is enmeshed in a wordy tussle with China over the latter’s bid to build a huge dam on the Brahmaputra river, near its source at Tibet, which may have a big adverse impact on both India and Bangladesh.

But, to dub Prime Minister Manmohan Singh’s latest gesture to the people of Bangladesh as trifle in the absence of a Teesta treaty is the biggest travesty of truth. The prime minister has opened the country’s huge textile, made-ups and knitwear market to Bangladesh, the world’s third largest garments exporter, even at the risk of a big economic impact on the Indian industry and trade. India’s own textile export trade is shrinking due to growing competition from Bangladesh, Pakistan, Thailand and China and quota restrictions from OECD countries. Last year, India’s apparel exports earned just around US$10.70 billion, far behind Bangladesh. Even Pakistan is way ahead of India. Tirupur in Tamil Nadu, which alone accounts for 15 per cent of India’s garments trade and 45 per cent of knitwear market directly employing some 3,00,000 workers, is most concerned. Fortunately, the Tamil Nadu textile employers and employees did not knock at the door of their Chief Minister J Jayalalithaa to make a strong political issue of the free Bangla access to the domestic textile market. They know that they have to fight the competition by raising the efficiency bar.

The free access to the burgeoning Indian garments market could mean a massive gain for the Bangladesh industry, the country’s single largest employer and export earner. It has the potential to create a few million jobs additionally to serve the Indian market alone. Indian importers from Mumbai, Ahmedabad, Delhi, Hyderabad, Bangalore, Lucknow and Kolkata are eagerly waiting to do trade with Bangladesh. With some efforts, Bangladesh can grab five to 10 per cent of India’s apparels and knitwear market. And, Bangladesh is well equipped for that. Indian traders say that Bangladesh-manufactured textiles, made-ups and knitwear are on an average 20 per cent cheaper than those produced by their Indian counterparts. The Indian trading community, which is only interested in making easy money, argues that cheaper imports from across the eastern border may ultimately help grow the Indian market.

There are as many as 4,500 factories which are members of the Bangladesh Garments Manufacturers’ & Exporters’ Association. Together, they employ over 5.5 million workers. The country’s export earning, last year, from woven items and knitwear was nearly $18 billion, representing 78 per cent of Bangladesh’s total export revenue of $23 billion. In recent years, an aggressive marketing by Bangladesh across the world resulted in a big jump in the export revenue. Last year, the country’s foreign earnings from textiles exports grew by a record 44 per cent that helped Bangladesh beat Pakistan ($14 billion) in the highly competitive international garments market.

Clearly, politicians and the media from both India and Bangladesh are responsible for making such a heavy weather of the Teesta water sharing treaty, the economic impact of which on the two economies would be far less than that of the textile treaty in terms of gains and losses. The historic bi-lateral co-operation effort giving Bangladesh a huge trade and economic advantage over India in the textile trade got damnably over-shadowed by petty political squabbles and din over Teesta water share on the both sides of the border. Once again, it proved to be a major diplomatic faux pas on the part of India and its ever confused and under-prepared government on international issues. (IPA Service)


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