India-Bangladesh Friendship Pipeline (IBFPL)

What’s in today’s article?

• Why in News?
• India-Bangladesh Friendship Pipeline (IBFPL)
• Significance of IBFPL

Why in News?

• Prime Minister Narendra Modi and Bangladesh Prime Minister Sheikh Hasina jointly inaugurated the India – Bangladesh Friendship Pipeline via video-conferencing.

India-Bangladesh Friendship Pipeline (IBFPL)

Image Caption: IBFPL

• The IBFPL is a 131.5 kilometre long oil pipeline connecting Siliguri in North Bengal to Parbatipur in Bangladesh’s Dinajpur province.
• The construction of the project started in 2018 with the help of India’s grant funding.
• The pipeline will carry one million tonnes of high-speed diesel from Numaligarh refinery in Assam to Bangladesh Petroleum Corporation’s Parbatipur depot.
• The pipeline, built at a cost of Rs. 377 crore, is part of energy sector cooperation between the two neighbouring countries through which Bangladesh will import petroleum, especially diesel from India.
• The supply will start on an experimental basis in June this year.
• The fuel transport deal will be effective for 15 years with an option for further extension.

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Significance of IBFPL

• Bangladesh’s rising energy demands –
  • Bangladesh faces a major energy crisis that threatens to hobble its growth.
  • In early October last year, Bangladesh suffered a grid failure that left nearly 80 per cent of the country without power.
  • Due to daily power outages, many industrial units in Bangladesh reported a fall in production by up to 50 per cent last year.
  • The energy crisis in Bangladesh, which is an energy-deficit country, was intensified by the conflict between Russia and Ukraine, and the consequent exponential increase in oil and gas prices.
  • Given this scenario, the IBFP will mark an important milestone in Bangladesh’s quest to fully meet its energy needs.
• India’s efforts to curtail China’s influence –
  • India’s help to Bangladesh in meeting its energy needs is also aimed at offsetting that country’s dependence on China, whose investments in Bangladesh’s energy sector stand at US $ 8.31 billion.
  • Beijing has offered to help Bangladesh’s transition to renewable sources of energy. But Dhaka is wary of taking loans from China to set up power-generating plants.
  • Bangladesh finance minister Mustafa Kamal had, a few months back, warned against China’s lending policies that push countries into debt.
  • India is also playing a key role in helping Bangladesh access clean and cheap energy from Bhutan and Nepal.
    • India has proposed expansion of power trade within the BBIN (Bangladesh, Bhutan, India, Nepal) framework and multilateral talks facilitated by the Indian government are currently on in this regard.
  • India has also promised to export power generated from its upcoming hydro-power projects in Sikkim and Arunachal Pradesh once these are commissioned.
• Economic Benefits –
  • India will send 2 lakh tonnes of oil annually in the first three years, 3 lakh tonnes per annum in the next three years, 5 lakh tonnes annually in the next four years and 10 lakh tonnes annually afterwards
  • The pipeline with India will cut the transportation cost of fuel oil for Bangladesh by 50%.
  • It will also reduce the transportation time to just one hour as compared to the current situation of taking several days to transport diesel via wagons and trawlers.
  • India will also benefit from it. India will earn revenue through this diesel export.
• This is the first cross-border energy pipeline between India and Bangladesh.
• The India-Bangladesh Friendship Pipeline is, thus, a major milestone in India’s efforts to help Bangladesh tide over its energy crisis.
• It is also part of New Delhi’s efforts to counter China’s influence over countries in the neighborhood.

Q1) What is the trade value between India and Bangladesh?

Exports from India to Bangladesh reached $16.15 billion in 2021-2022 while imports from Bangladesh stood at $1.97 billion in the same fiscal. Hence, India has a trade surplus with Bangladesh.

Q2) How many states in India share border with Bangladesh?

Bangladesh and India share a 4,096-kilometre-long international border, the fifth-longest land border in the world, including 262 km in Assam, 856 km in Tripura, 318 km in Mizoram, 443 km in Meghalaya, and 2,217 km in West Bengal.

Source: PM Modi and Sheikh Hasina launch ‘India-Bangladesh Friendship Pipeline’ | Hindu