A new paradigm of compatible relationship seems to be emerging between India and Bangladesh in the recent past. Relations between the two countries have remained handcuffed to history since the creation of Bangladesh. The anti-liberation forces within Bangladesh advocate that India’s contribution towards the liberation of Bangladesh in 1971 stemmed from far-reaching calculation, i.e. far from being altruistic, India supported it for her own strategic reasons. According to them, both military and non-military asymmetries between the two countries are likely to affect Indo-Bangladesh relations. With the changing strategic environment, the country has assumed a new geo-political importance for India for the following reasons:

· To contain the anti-Indian activities in the northeastern states,

· To neutralise Chinese preponderance which is sitting just across the border and is also part of the Indo-Bangladesh-Nepal-Bhutan geo-politics,

· To tackle the problem of illegal immigration of Bangladeshis into India,

· To scuttle the entry of any major power in the vicinity of South Asian region.

The relationship between the two countries have been determined by two factors:

1. The destructive oppositional-politics of Bangladesh.

2. The outstanding contentious issues between the two countries, as analysed below:

·                     The issue of water resource sharing. The two countries share 54 trans-boundary rivers. Critics have described the 1996 Ganges treaty as biased. Teesta is currently under negotiation. 

·                     The problem of illegal trans-border infiltration from Bangladesh. According to Home Ministry estimates there are about 1.2 crore Bangladeshi infiltrators in West Bengal alone.

·                     The question of activities of the Pakistani ISI in Bangladesh and the relative ease with which insurgent groups active in North-East India have operated from Bangladesh.

·                     The issue of enclaves dispute and consequent exchange of fire between the Border Security Force (BSF) and the (Bangladesh Rifles) in the Belonia Sector near the Tripura border, where the ownership of about 20 hectares of farm land in the flood-plain of the Muhuri river is in dispute. India has conceded on Tinbigha, but even now the delimitation of the border has not been complete. Some 6.5 miles near Comilla in Bangladesh on the Tripura border are yet to be delineated.

The relations between the two countries however, underwent a qualitative improvement with the return to power of the Awami League led by Sheikh Hassina in 1996. The warmth that developed between the two countries led to the following developments:

·                     The sharing of the Ganges water vital to Bangladesh’s survival on December 12,1996 is an admirable bi-lateral feat removing an important bottleneck. Critics have questioned the rush and secrecy that featured the settlement and the failure to guarantee an adequate volume of water to Bangladesh for the next thirty years.

·                     The Chittagong Hill Tract accord signed on December 1997 between the Bangladesh government and   political wing of the Shanti Bahini ending the insurgency, offered the rebels a general amnesty in return for the surrender of their arms and gave the tribal people greater powers of self governance through the establishment of three newly elected district councils(to control the areas land management and policing) and a regional council (the chairman of which was to enjoy the rank of a state minister). The agreement was criticized as a sell-out of the area and sovereignty by the opposition. 

·                     In an agreement with the Bangladesh government on June 20, 1999, India undertook to provide a line of credit of 200crore over the next three years. The chamber of commerce of the two countries also signed a Memorandum of Understanding for the formation of joint Indo-Bangladesh Chamber of Commerce. The line of credit, spread over the period upto March 2002, will enable the supply of transport and equipment and capital goods to improve infrastructure in Bangladesh.

·                     The bus service between Dhaka and Calcutta has heralded a multi-modal communication link between the two countries. The commercial run of the Calcutta-Dhaka bus service started on June19, 1999 was meant to reaffirm friendship and give further impetus to mutual economic cooperation. 

·                     India has also agreed to give duty free access to Bangladesh goods on a non-reciprocal basis.

·                     The idea of providing transshipment facilities to goods for the north-eastern Indian states via  Bangladesh was endorsed by the ruling  AL  keeping in view the enormous economic benefits it would bring to Bangladesh. The agreement was crticised by the opposition and evoked nationwide protests as it was alleged to have jeopardised national interest. 

·                     A defence deal was signed between the two countries on June 28,1999.Bangladesh will purchase 130 vehicles from Ashok Leyland for defence purposes.

·                     Currently there are 25 Indian ventures with an investment of over $16mn. Corporates like ABB, Ashok Leyland, Hindustan Motors, TELCO, Eicher, M.N.Dastur Tata International among others have operations or are pursuing projects in Bangladesh.

One of the major constraints for industrial growth in Bangladesh has been the shortage of power. The country needs $7.5billion of investments in the energy sector by 2005. India has offered for collaboration between NTPC and Bangladesh Power Development Board (BPDB) for investment in a gas-based power station. Similarly in petrochemicals there is a big potential for buyback in view of the excess demand in India.

The bonhomie between the two countries is an indication of the maturity of their governments and the importance they place on friendly and cooperative relations. As of present, the government is badly stretched by the confrontationist politics of the four party opposition alliance. India-Bangladesh relations will depend in a large measure on the AL’s effectiveness in containing the opposition.