India, Bangladesh sign SOP for operationalising Agreement on Coastal Shipping

India and Bangladesh have signed the Standard Operating Procedure (SOP) for operationalising the Agreement on Coastal Shipping between both countries.
The agreement was signed in June 2015 in order to improve the bilateral trade by reducing the logistic costs of EXIM transport.
Key facts of SOP

  • The SOP has been framed as per the terms and conditions of the Agreement on Coastal Shipping and its provisions have been agreed by both the countries.
  • It would pave the way to promote coastal shipping between India and Bangladesh and further enhance bilateral trade by bringing down the cost of transportation of export-import (EXIM) cargo.
  • It would in turn facilitate trade and transportation of goods between the two neighbours through coastal and inland waters.
  • Both countries would stipulate same treatment to each other’s national vessels on similar grounds of national vessels used in international sea transportation.
  • The two sides also have agreed to use of vessels of River Sea Vessel (RSV) category for Indo-Bangladesh coastal shipping.

Advantages of agreement

  • Connectivity to North East India: It would enable opening of coastal shipping between India and Bangladesh.
  • Thus, help to enhance the movement of cargo to the landlocked North East Indian states through coastal shipping up to Chittagong and thereafter by road and inland waterways.
  • Hub ports: The deep draft ports on the eastern coast of India can be used as hub ports for the further onward transportation of cargo via the coastal mode through RSV category of vessels to Bangladesh.
  • Attract enhanced cargo: Indian ports will be able to attract enhanced cargo and help in reducing the overall transportation cost to Bangladesh.
  • Trans-shipment ports: Indian ports can also serve as trans-shipment ports for transportation of cargo from Bangladesh. Thus, it will enhance throughput as a result of Indo-Bangladesh coastal trade.

It should be noted that, during the past few years India’s trade with Bangladesh has grown rapidly and now Bangladesh has emerged as India’s largest trading partner in South Asia.



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