Bangladesh , India and Nepal move ahead on motor vehicle agreement project.
What is the news :
- A meeting of India, Bangladesh, and Nepal on the BBIN Motor Vehicles Agreement (MVA) was held at New Delhi on March 7-8. Bhutan participated in the meeting as an observer.
- The meeting was held to discuss the passenger and cargo protocols that are essential to operationalise the BBIN Motor Vehicles Agreement (MVA) for the regulation of passenger, personal and cargo vehicular traffic between Bangladesh, Bhutan, India and Nepal, signed on June 15, 2015.
- This was the first meeting of the group since the outbreak of the COVID-19 pandemic. The previous meeting was held in February 2020 in New Delhi.
- Recalling the commitments made at the highest level for implementation of the BBIN MVA, the delegations expressed their desire to sign the MoU at the earliest to give momentum to the implementation.
- The countries emphasized the importance of operationalising the BBIN MVA expeditiously to enable seamless movement between them for facilitating trade and people-to-people contact.
- Asian Development Bank provided technical and knowledge support to the meeting.
Important :
- With Bhutan continuing to sit out the Motor Vehicles Agreement (MVA) of the sub-regional Bangladesh-Bhutan-India-Nepal (BBIN) grouping, a meeting of the other three countries was held to discuss the next steps in operationalising the agreement for the free flow of good and people between them.
- Prime Minister Narendra Modi is expected to travel to Colombo at the end of March to attend the summit of another sub-regional grouping, BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), which includes Bangladesh, Nepal and Bhutan as well.
- The BBIN meeting was the first such in-person meeting since February 2020 to discuss the MVA since the COVID-19 pandemic outbreak, and officials finalized the wording of two separate protocols on passenger and cargo movement with an “enabling” agreement.
- During the meeting, an enabling MOU to be signed by India, Bangladesh and Nepal for implementation of the BBIN MVA by the three countries, pending ratification of the MVA by Bhutan, was finalized.
- Operationalising the MVA by concluding the Passenger and the Cargo Protocol will help realise the full potential of trade and people to people connectivity between the BBIN countries by fostering greater sub-regional cooperation/
Bhutan’s position
- According to the MEA statement, Bhutan sent an “observer team” led by an Embassy official to the two-day meeting held on March 7-8 in Delhi, while delegations of Bangladesh, India and Nepal were led by Director General or Joint Secretary level officers.
- The original BBIN MVA was signed by all four countries in June 2015, but after objections in Bhutan over sustainability and environmental concerns, the Bhutanese parliament decided not to endorse the plan, and former Prime Minister Tobgay Tshering’s government agreed to allow the other three countries to go ahead with the project for vehicular movement (BIN-MVA) in 2017. In 2020, Prime Minister Lotay Tshering told The Hindu in an interview that given Bhutan’s “current infrastructure” and top priority to remaining a “carbon-negative” country, it would not be possible to consider joining the MVA.
India hopeful
- India remained “hopeful” that Bhutan could change its position on the project, it was decided at a meeting in November 2021 to go ahead for now, given that there are no new signals from Thimphu on the project.
- Progress on the seven-year-old project has been slow, nonetheless, despite several trial runs being held along the Bangladesh-India-Nepal road route for passenger buses and cargo trucks.
- According to the officials, there are still some agreements holding up the final protocols, including issues like insurance and bank guarantees, and the size and frequency of freight carriers into each country, which they hope to finalise this year before operationalising bus and truck movements between them.
- With work on the BIN-MVA now picking up momentum, development banks have also begun to look at the project more closely.
- While the Asian Development Bank has supported the project as part of its South Asian Subregional Economic Cooperation programme, and has been requested to prioritise about 30 road projects worth billions of dollars, the World Bank that has estimated that the implementation of the MVA will potentially see increase in traffic-regional trade within South Asia by nearly 60%, has also announced its interest in supporting infrastructure.
- In February 2022, the World Bank South Asia programme for BBIN listed projects worth $750 million, for which loans were in “the pipeline”. They included upgrading border checkposts and land ports in Bangladesh with a view to upgrading both physical and commercial infrastructure.
What is the need for BBIN agreement?
- The South Asian Association for Regional Cooperation (SAARC) has been unable to achieve its potential as key initiatives, including in the important area of connectivity, are held back due to the obstructionist approach of Pakistan.
- The finalisation of the SAARC Regional Railways Agreement and the SAARC Motor Vehicle Agreement, aimed at increasing cross-border and regional connectivity, has been pending due to lack of response from Pakistan.
- Initiatives to enhance connectivity in the region have been pursued at sub-regional level by the Indian government.
- The Indian government expects that regional cooperation would advance under the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and BBIN.
- Towards enhancing connectivity, Bangladesh, Bhutan, India and Nepal concluded the sub-regional Motor Vehicle Agreement.
BBIN Motor Vehicles Agreement (MVA)
- The BBIN Motor Vehicles Agreement was signed by representatives of Bangladesh, Bhutan, India and Nepal on June 15, 2015 in Thimphu, Bhutan.
- Subsequently, it has been ratified by Bangladesh, India and Nepal. The National Assembly (Lower House) of Bhutan had endorsed the BBIN MVA in May 2016, and forwarded it to the National Council (Upper House) of Bhutan for consideration.
- Since the 1980s, tariffs within the region have been gradually reduced. Following the signing of the South Asian Free Trade Area (SAFTA) agreement, intra-regional trade in South Asia doubled from $10 billion in 2006 to $20 billion in 2012. However, non-tariff barriers continue to impede growth of intra-regional trade. The BBIN agreement is envisaged to provide a framework for exchange of commercial traffic rights arrangements.
- Finalisation of the BBIN Motor Vehicle Agreement represents considerable efforts of South Asian countries to facilitate cross-border trade and travel. It will allow passenger, personal, and cargo vehicles to cross international borders and traverse key trade routes in the participating countries.
- Once implemented, the agreement will reduce costly and time-consuming trans-shipment of people and goods at border crossings.
- Operationalising the MVA by concluding the passenger and the cargo protocol will help realise the full potential of trade and people-to-people connectivity between the BBIN countries by fostering greater sub-regional cooperation.
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