Dhaka and New Delhi in a joint meeting Tuesday set modalities of building two special economic zones in coastal Mongla belt and in Kushtia that would be dedicated to Indian investors.
Officials said the Indian Economic Zones (IEZs) – formally deemed as Bangladesh-India government-to-government economic zones – will be developed at Mongla in Bagerhat and Bheramara in Kushtia under the new US$ 88 million second Indian line of credit (LoC).
Joint Working Group (JWC) of the two countries sat for its first meeting at a hotel in Dhaka for the bilateral talks on the economic front.
Sources who attended the meeting said the JWC discussed framework for setting up IEZs, feasibility study, sectors of focus, market focus, model of developing IEZs, preferences of Bangladesh government, fit address to security concerns of developers, incentives, exemption, concession, legal protection to IEZs, development of infrastructure by Bangladesh government, human resource supply etc.
It also discussed utilisation of $88 million from the second LoC for the two IEZs.
Earlier, the government of India had constituted the Indian side of the joint working group to work out the modalities for implementation of the Memorandum of Understanding (MoU) for establishing Indian economic zones in Bangladesh.
Ministry of External Affairs representative Smt Sririya Ranganathan, chairman of the JWG, led the team of India at the meet.
On the host side, there were representatives from Bangladesh Economic Zones Authority (BEZA), foreign ministry, Prime Minister’s Office (PMO), Economic Relations Division and the ministry of commerce.
The Mongla Special Economic zone (SEZ) would be set up on about 205 acres of land and the other in Kushtia on 477.16 acres.
The move comes under a Memorandum of Understanding (MoU) signed between the governments of Bangladesh and India during the last visit of Indian premier Narendra Modi on June 6.
Earlier, a feasibility study had been conducted to find out the economic potential of the Indian investment.
Sources said India has chosen the locations for investment.
A BEZA official said, “The economic zones will be awarded if both parties agree on the relevant terms and conditions.”
The government has also approved special incentive packages for local and foreign investors to attract their investment in economic zones.
The government enacted the private economic zone law in 2010 aiming to materialise the Vision-2021 by expediting economic growth and alleviating poverty.
Under the BEZA Act 2010 on G2G model, Bangladesh government will ensure infrastructures such as access road, gas, electrification, land development including all off-site development of economic zone.
BEZA officials hope successful implementation of the Indian economic zones will eventually reduce the trade imbalance between the two countries that amounts to several billion dollars in favour of Delhi.
The annual bilateral trade is worth around US$ 6.5 billion by official count with India exporting goods and services amounting to around $ 6 billion to Bangladesh while Bangladesh exports fetch only $ 0.5 billion from India.