Major boost for economic zones for Indian investors in Bangladesh
Sohel Parvez
The Daily Star
Publication Date : 02-10-2015
India has agreed to extend part of its fresh US$2 billion loans to develop two economic zones in Bangladesh for its investors, said a top official of the economic zones authority.
The zones will be set up in Mongla and Bheramara and will go some way toward narrowing the rising trade imbalance between Bangladesh and India, the two next-door neighbours.
Last week, the Indian authority agreed to provide $88 million under the new $2 billion line of credit (LoC) for establishing the two economic zones under an agreement signed during Indian Prime Minister Narendra Modi's two-day visit to Dhaka in June.
Following the deal, Bangladesh Economic Zones Authority sought finance under the new LoC, which India wants to provide to Bangladesh to support infrastructure development, mainly connectivity-related projects, according to finance ministry officials.
BEZA executive chairman Paban Chowdhury said the economic zones would create thousands of new jobs and increase exports.
New technology too will arrive in Bangladesh, he said, adding that it will take two years to develop the two economic zones.
The Bheramara zone spreading across upwards of 400 acres will be the biggest in the country. The one in Mongla will span 110 acres.
For smooth implementation of the two projects, both the countries have decided to form a joint working group (JWG).
Bangladesh and India have also formed panels to represent in the JWG in this regard, officials said.
Chowdhury said his office wants to hold the first meeting of JWG in Dhaka in December this year. The type of investments that would come into the economic zones and various other issues would be discussed at the meeting.
India is the third country after Japan and China to have shown interest in developing economic zones in Bangladesh.
Once set up, they will create jobs and give a boost to the economy as it aims to break the 6 per cent growth trap.
BEZA has so far approved 19 sites, including the Indian economic zones. Also, sites for 12 such industrial areas have received the green light from a pre-screening committee.
The authority also gave permission to establish three private economic zones, with work on the one being developed by Abdul Monem Ltd in Munshiganj going fast, according to Chowdhury.
Of the government sponsored schemes, the development of Mongla Economic Zone on 205 acres of land is also progressing briskly.
Chowdhury said his office wants to see the economic zone in Mongla ready for investors by the middle of next year.
India had earlier extended a $1 billion LoC in 2010. Of the amount, $200 million has already been converted to grants and disbursed.