Due to Bhutan’s continued absence from the sub-regional Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement (MVA), a meeting of the other three nations was organized to consider the next steps in operationalizing the agreement for the free passage of goods and persons.
Meanwhile, Prime Minister Narendra Modi is scheduled to visit Colombo at the end of March for the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) meeting, which will also include Bangladesh, Nepal, and Bhutan. The BBIN conference was the first in-person discussion of the MVA since the COVID-19 pandemic outbreak in February 2020, and authorities approved the wording of two independent passenger and cargo movement protocols with an “enabling” agreement.
This will enable Bangladesh, India, and Nepal to implement of BBIN MVA
“An enabling MOU to be signed by India, Bangladesh, and Nepal for implementation of the BBIN MVA by the three countries, pending ratification of the MVA by Bhutan, was finalized during the meeting,” according to a statement from the Ministry of External Affairs.
“By fostering more sub-regional collaboration, operationalizing the MVA by finalizing the Passenger and Cargo Protocols will help realize the full potential of commerce and people-to-people connectivity between the BBIN countries,” it added.
Bhutan’s stance
According to the MEA statement, Bhutan dispatched an “observation team” to the two-day conference in Delhi on March 7-8, led by an Embassy official, while Bangladesh, India, and Nepal delegations were led by Director-General or Joint Secretary level personnel.
The original BBIN MVA was signed by all four countries in June 2015, but after objections from Bhutan’s parliament over sustainability and environmental concerns, the plan was rejected, and former Prime Minister Tobgay Tshering’s government agreed to allow the other three countries to proceed with the project for vehicular movement (BIN-MVA) in 2017. In an interview with The Hindu in 2020, Prime Minister Lotay Tshering stated that joining the MVA would be impossible due to Bhutan’s “existing infrastructure” and top priority of maintaining a “carbon-negative” country.
India is optimistic.
Officials added that while India remained “optimistic” that Bhutan would change its mind over the project, a meeting in November 2021 agreed to move forward for the time being because there have been no new signals from Thimphu on the project.
Despite multiple trial runs for passenger buses and cargo trucks along the Bangladesh-India-Nepal road route, progress on the seven-year-old project has been slow. Officials say that some agreements are still holding up the final protocols, such as insurance and bank guarantees, as well as the size and frequency of freight carriers entering each country, which they hope to finalize this year before beginning to operate bus and truck movements between the two countries.
With progress on the BIN-MVA gaining traction, development banks have begun to take a closer look at the project.
While the Asian Development Bank has pledged to support the project as part of its South Asian Subregional Economic Cooperation program and has been asked to prioritize about 30 road projects worth billions of dollars, the World Bank, which estimates that the MVA will increase traffic-regional trade within South Asia by nearly 60%, has also expressed interest in providing infrastructure support.
The World Bank’s South Asia program for BBIN listed projects worth $750 million in February 2022 for which funds were “in the process.” They included modernizing Bangladesh’s border checkpoints and land ports in order to improve both physical and commercial infrastructure.