Bangladesh said Sunday that a much-delayed deal over sharing water with India was making progress as Finance Minister Pranab Mukherjee visited from New Delhi to shore up damaged cross-border ties.
India announced that it will write off $200 million of the $1 billion line of credit offered to Bangladesh, and promised to implement all bilateral agreements, including those that have witnessed delays.
The deal to share Teesta river water was meant to be a highlight of Prime Minister Manmohan Singh's visit to Dhaka.
India had announced a $1 billion Line of Credit to Bangladesh, the largest it has offered to any country in 2010.
The deal to share Teesta river water was meant to be a highlight of Prime Minister Manmohan Singh’s visit to Dhaka last September, but it fell through after opposition from the chief minister of India’s West Bengal state.
A genera Teesta River Projects view and bridge of India.
Finance Minister Pranab Mukherjee said today that New Delhi had decided to consider $200 million of that amount as a grant rather than credit, and Bangladesh can utilise the fund for its priority projects.
"India will treat the amount as grant, not credit," Mukherjee told a group of senior editors as he wound up a 20-hour trip to Dhaka.
Indian Finance Minister Pranab Mukherjee and Bangladesh Foreign Minister Dr. Dipu Moni.
The failure soured relations between India and Bangladesh, where Prime Minister Sheikh Hasina has staked much political capital in resolving an issue crucial for farmers in the country’s drought-hit north.
"This $200 million will be utilised for projects that Bangladesh prioritises," he said.
“The Indian government is working on the Teesta deal. They are very sincere about it. So we are hopeful that it will be struck,” Bangladesh Foreign Minister Dipu Moni told reporters after talks with Mukherjee.
Indian villagers catch fish with handmade fishing nets in the River Teesta in Jalpaiguri. Bangladesh says a much-delayed deal over sharing water with India is making progress as Finance Minister Pranab Mukherjee visits from New Delhi to shore up damaged cross-border ties.
Mukherjee also cited "ground realities" of coalition politics as the reason for India's failure to seal the Teesta water sharing deal during Prime Minister Manmohan Singh's visit to Bangladesh last year.
"In a democracy such as ours... this process often becomes time consuming," he said.
"There are certain issues that need to be resolved," he said while referring to the Teesta issue as a "sensitive" one.
Mukherjee on Sunday concluded a two-day visit to Bangladesh, where he met with Hasina to review agreements signed during Singh’s visit, including one to end complex border territory disputes.
Earlier, during his meeting with Premier Sheikh Hasina, Mukherjee vowed to implement all agreements signed with the country during Manmohan Singh's visit last year.
"Although it was late, (all) these agreements (signed with Bangladesh) will be materialised soon," he was quoted as telling Hasina by a Prime Minister's office spokesman.
Bangladesh, formerly East Pakistan, won independence in 1971 with Indian military help, but relations have been patchy ever since due to decades of mutual mistrust.