As Indian PM heads for Dhaka, China looms large

Reuters: India’s jostling with China for resources and influence will be the backdrop to a visit to Bangladesh by Prime Minister Manmohan Singh this week, looming large over expected progress on a border dispute, water sharing and trade.

New Delhi’s relations with its eastern neighbour have warmed thanks to Bangladeshi Prime Minister Sheikh Hasina’s clampdown on separatist insurgents in India’s isolated north-east who long sheltered across the shared border.

India reciprocated last year with a $1 billion credit line for infrastructure development and promises to drop trade barriers.

Singh and Hasina are expected to sign agreements to swap disputed territory dating back to the 1947 partition of British India, as well as pacts on water rights from major shared rivers, during the Sept. 6-7 trip, the first by an Indian prime minister to Bangladesh in 12 years.

But India’s overtures are dwarfed by Bangladesh’s flourishing friendship with its main trading partner, China, a big weapons supplier that is also helping build ports in the riverine nation that straddles the Ganges Delta and the Bay of Bengal.

“China is much more disposed to support Bangladesh in ways that India will not do, such as arming the military,” said Lawrence Saez, chair of the Centre of South Asian Studies at London’s School of Oriental and African Studies.

A fast-growing economic powerhouse, India is keen to win energy supplies and influence with its neighbours, but China is several steps ahead even in South Asian countries such as Nepal and Sri Lanka, where India could be a natural leader. Many in Bangladesh, a nation of 160 million encased on three sides by India, consider their giant neighbour a neo-colonial threat. Even India-friendly Hasina would think twice before giving the country access to mostly untapped natural gas reserves.

Currently Bangladesh does not produce enough gas for domestic demand and exports are not on the cards.

In 2006, India gave up on a planned pipeline to bring natural gas from Myanmar through Bangladesh, citing too-tough conditions imposed by Dhaka.

Still, better relations with Bangladesh should bring benefits for both sides.

India helped its neighbour secede from Pakistan in a bloody 1971 war, but relations were frequently fractious after that. Hasina’s arch-rival, Begum Khaleda Zia of the Bangladesh Nationalist Party, is more suspicious of India and ties could be tested if she regained power in an election due in 2013.

The current rapprochement will in theory bring down trade barriers and revive rail, road and river routes -- abandoned since the British colonial era -- that connect India to its north-eastern states, such as Assam.

Such a route could legalise