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India-Bangladesh Agreement on Coastal Shipping
Jun 10, 2015

Bangladesh has grown rapidly during the past few years. Bangladesh is now India's largest trade partner in South Asia. The opening up of the coastal route between India and Bangladesh is expected to provide an alternative route for the transportation of Exim cargo between the two countries.

Key Points

  • The agreement during Narendra Modi’s rececent visit to Bangladesh on Coastal Shipping to carry out coastal movement of goods between the two countries wil benefit both countries a lot.

  • Exim trade between India and Bangladesh would be benefited by way of reduction in freight charges.

  • It will also improve the utilization of port capacities of Indian ports and open up new opportunity for Indian coastal vessels.

  • It will also help in decongestion of roads especially at the Land custom stations/integrated check posts at the Indo-Bangladesh boarder.

  • The Indian ports serving as trans-shipment ports for Bangladesh cargo will derive benefits by way of enhanced throughput as a result of Indo-Bangladesh coastal trade. 

  • India and Bangladesh shall render the same treatment to the other country's vessels as it would have done to its national vessels used in international sea transportation. 

  • The commencement of coastal shipping between the India and Bangladesh will increase bilateral trade between the two countries and lower down the cost of transportation of Exim cargo. 

Currently there is no significant cargo movement between sea ports of Bangladesh and India as it is not profitable for the big ocean going vessels to operate between the sea ports of the two countries. Therefore, to reduce the cost of shipping operation, a lower but pragmatic standard of vessel known as River Sea Vessel (RSV) has been prescribed for coastal shipping. The RSV category has significantly lower construction and operation cost without compromising on the safety of the vessel. For the Indo-Bangladesh coastal shipping, the RSV category of vessel has been agreed upon by both the countries.


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