Bangladesh and Nepal, two South Asian nations with diverse ecological landscapes, socioeconomic structures, and rich histories, are actively nurturing their bilateral relations. Amid a rapidly changing global landscape, innovative measures are crucial to safeguard the interests of smaller economies and pursue mutual benefits. Despite their strong bilateral ties, the economic aspect of their relationship has not reached its full potential. Efforts should focus on reshaping international relations and infusing fresh energy in line with Bangladesh’s economic diplomacy priorities. The long-standing friendship and mutual support shared by Bangladesh and Nepal can serve as a blueprint for other countries.
Over the years, the relationship between Bangladesh and Nepal has evolved, with a current emphasis on stabilizing border regions and promoting people-to-people interactions. This article delves into the current state of trade relations between these nations and explores strategic options to strengthen these ties. It concludes with recommendations for bolstering economic diplomacy between Bangladesh and Nepal to foster beneficial trade relations. Diplomatic ties between Nepal and Bangladesh were established on April 8, 1972. Notably, Nepal was one of the first countries to recognize Bangladesh’s sovereignty and territorial rights soon after its independence. Since the establishment of diplomatic relations, the two nations have nurtured a relationship characterized by goodwill, mutual understanding, shared values, and common aspirations.
Nepal, a small landlocked nation positioned between two larger and stronger neighbors, China and India, adheres to a foreign policy rooted in non-alignment and peaceful coexistence. Despite its challenging geographical location, Nepal maintains positive relations with both China and India. Nepal’s foreign policy adheres to the principles outlined in the UN Charter, emphasizing non-alignment, international law, and world peace. Its key foreign relationships are with global financial institutions such as the IMF, ADB, World Bank, and other multilateral organizations that operate worldwide. Notably, economic relationships significantly influence political diplomacy. Economic diplomacy has played a pivotal role in various historical events, including the end of the Cold War, the promotion of democracy, and global progress. Economic diplomacy encompasses bilateral, regional, and multilateral dimensions, with bilateral economic diplomacy holding particular importance in international trade, treaties, and other economic matters between two countries.
In recent years, the focus of political diplomacy has shifted towards economic diplomacy due to the increasing recognition of the significant impact economic partnerships have on political diplomacy. While economic diplomacy is not new to Nepal, historical trade relationships existed with Tibet and British India in the eighteenth and nineteenth centuries. These relationships were rooted in strategic alliances and driven by economic, rather than purely political, considerations. Nepal must redirect its diplomatic efforts away from traditional political ties and foreign aid, instead focusing on trade, tourism, investment, joint ventures, and job creation. Achieving a broader national consensus and stronger national support for foreign policy, which aligns with national interests and sovereignty, is essential. Nepal’s foreign policy is guided by the principles of coexistence, non-interference, and respect for neighboring sovereignties, as well as solidarity with other small, least developed, and landlocked developing countries, as outlined in the UN Charter.
Given Nepal’s geographic location between India and China, its bilateral trade agreements with these two countries are of utmost importance. Additionally, Nepal and Bangladesh must examine and streamline their customs clearance procedures at border checkpoints to facilitate smoother trade. Bangladesh has emerged as a regional hub for industries such as ready-to-wear apparel, pharmaceuticals, ceramics, cement, and light engineering goods. Its exports have consistently grown at a rate of 12% annually over the past 15 years, driven by increasing global demand. This proximity presents significant opportunities for Nepal to engage in trade. To attract foreign investors, including those from Nepal, the Bangladeshi government should ensure they receive full support from the moment they arrive in Dhaka. This includes efficient issue resolution through the Board of Investment.
Various chambers of commerce, such as FBCCI, DCCI, MCCI, BKMEA, and BGMEA, play pivotal roles in promoting trade, tourism, cultural exchange, and foreign direct investment in Bangladesh. Economic issues should take precedence over politics in daily life. Business leaders should advocate for Bangladesh’s long-term economic interests before addressing short-term political interests. The Bangladeshi government should also focus on promoting the country as an attractive investment destination and fostering a favorable climate for foreign investment. Lastly, friendly relations with India, influenced by shared cultural and religious traditions and geographic proximity, should be maintained by both Nepal and Bangladesh. India plays a crucial role in the trade and transit between these two nations. In conclusion, the economic diplomacy between Bangladesh and Nepal holds the potential to significantly strengthen their trade relations. By prioritizing economic cooperation, streamlining customs procedures, and fostering an environment conducive to foreign investment, these two nations can forge a prosperous and mutually beneficial partnership.
