Two special economic zones in the making for India

Infograph: TBS

A 900-acre special economic zone for Indian companies in Chattogam's Mirsharai is in the making, with large financial contributions – Tk915 crore of the total project cost of Tk965 crore – coming from the friendly neighbouring country.

Apart from this one, the government has started developing another special economic zone for India in Bagerhat's Mongla on 110 acres of land.

Bangladesh also awarded dedicated economic zones to Japan and China. 

Built under an agreement between the governments of Bangladesh and India in 2015, the economic zone in the Mirsharai part of the Bangabandhu Sheikh Mujib Shilpa Nagar is expected to be ready within the next one and half years, officials said. 

"The place is now low-lying and needs to be filled with soil. We are currently working to float a tender for the land development.  Hopefully, the tender will be issued within one or two months and the work will start early next year," Md Mokhlesur Rahman, project director for the establishment of the Indian EZ in Mirsarai, told The Business Standard (TBS). 

"We, however, are yet to decide how many industrial plots will be there. We are working on that and designing is in progress," he, also a joint secretary of the Bangladesh Economic Zone Authority, added.

The Executive Committee of the National Economic Council approved the 900-acre Indian economic zone project in April 2019 and set 30 June 2023 as its deadline.

Later, the authorities – Bangladesh Economic Zone Authority or Beza – signed an agreement with India's largest integrated ports and logistics company Adani Ports and SEZ Limited on 1 April this year to develop the economic zone. Beza also appointed a project management consultant from India – Mahindra Consulting Engineers Limited – for design and overall supervision. 

The Tk965-crore project is one of the key economic zones in the country's largest industrial city, Bangabandhu Sheikh Mujib Shilpa Nagar, which sits on a large area of 30,000 acres straddling two upazilas – Mirsharai of Chattogram and Sonagazi of Feni. 

Of the total estimated costs, Bangladesh will finance Tk50.26 crore, and the rest is coming from India as a soft loan under India's line of credit facility.

Land development, construction of access roads, administrative buildings, security sheds, water supply and sanitation systems, telecommunication, water treatment plant, and other facilities will be ensured under the project.

Indian High Commissioner to Bangladesh, Vikram K Doraiswami, in the agreement signing programme with Mahindra Consulting at the Beza office, said over 350 Indian companies are now registered in Bangladesh. "If this economic zone is established, Indian investment in Bangladesh will increase further." 

They can invest in the automobile industry, food processing and logistics services in Bangladesh, he added.

At the same event, Beza Executive Chairman, Sheikh Yusuf Harun, said, "Mahindra Engineering Consultant has experience in establishing large economic zones in India. We want to establish an international standard Indian EZ by tapping its experience and technical knowledge".

In search of developer for Mongla SEZ 

Under the 2015 agreement with the Indian government, Beza allocated 110 acres of land close to Mongla Port in Bagerhat to develop another special economic zone (SEZ) for India.  

It is now negotiating with Mumbai-based Hiranandani Group to appoint the company as the developer for the zone, officials familiar with the matter have told TBS.

Meanwhile, the Indian government has agreed to provide $88 million in financing for it, they added. 

Indian portfolios in other economic zones

Various Indian firms have already invested in other economic zones of Bangladesh.

Of them, Asian Paints Ltd invested $26m, Ramky Enviro Pty Ltd $10m, and Marico Bangladesh Ltd $26.72m, in the Bangabandhu Sheikh Mujib Shilpa Nagar, while Sakata Inx Private Limited invested $2.13m in the Meghna Industrial Economic Zone.

All the companies, except Marico, are currently in production.

"Entrepreneurs from India are keen to invest in Bangladesh. At a meeting in Rajasthan's Jaipur on 23 August, business leaders from the Confederation of India agreed to invest more than Tk800 crore in joint ventures with us," said India-Bangladesh Chamber of Commerce and Industry President, Abdul Matlub Ahmad.

They will put their money in three-wheeler manufacturing, mustard oil production, the marble and granite cutting and polishing industry, silver and gold handmade products, and tourism, he told TBS. 

"Besides, with the soaring demand for man-made fibre clothing all over the world, some Indian investors want to set up factories in Bangladesh. They will produce and export products."

Apart from the under-construction economic zones, they are also looking for other economic zones, Abdul Matlub Ahmad said.

The Bangladesh Economic Zones Authority is working toward establishing 100 economic zones across the country by 2030. Investors can avail tax holidays, duty-free import of raw materials and machinery, exemption from dividend tax, VAT-free electricity, gas and water, and other fiscal facilities in the zones.

Apart from the economic zones, India has invested in other places too.

According to Bangladesh Bank data, Bangladesh has so far received a great amount of foreign direct investment from Indian companies in a wide range of fields such as gas and petroleum, textiles and clothing, banking, power, food, trading, chemicals and pharmaceuticals, construction, agriculture and fishing, leather and leather products, insurance, and metal and machinery products.