India rolled out the red carpet for the prime minister of Bangladesh and prime minister Manmohan Singh was, rightly, lavish both in his praise and promise of opportunities for cooperation between the two countries. Undoubtedly, Bangladesh is a less developed country than India, with a per capita income that is just 60 per cent that of India’s relatively low figure and a ranking of 137 on the human development index compared with India’s marginally better 126.

However, apart from a shared history and culture, Bangladesh is key to India’s ability to access its own resources in the north-eastern states of India as well as those beyond in Myanmar. The fact that India lost out to China in developing and accessing Myanmar’s hydrocarbon resources was well covered by the media. Myanmar also has large hydropower resources of nearly 40,000 mw of which less than 1,000 mw has been developed.

India and Bangladesh have signed several pacts for enhanced cooperation during this visit of prime minister Sheikh Hasina. One key memorandum of understanding relates to cooperation in the electricity sector. Bang­ladesh, as India, is suffering from huge energy shortages. The estimates of the gap between demand and supply vary widely and the shortages could be anywhere between 25 per cent and 50 per cent. One estimate talks about a 1,500 mw shortfall, and the 1,000 mw that India could supply to Bangladesh would go a long way in addressing this shortfall.

Having said that, the question that comes to mind is if supplying this electricity from India’s eastern region via West Bengal is the best option for India? Or, should greater emphasis be on evacuating power from the north-eastern parts of the country?

Let us take a quick look at the Indian position. India, too, has peak shortages of over 12 per cent and energy shortages of close to 10 per cent at an aggregate level. Undoubtedly, the eastern region has more often than not seen surpluses in the electricity situation. However, these surpluses, when they occur, can easily be absorbed in northern and southern regions of the country. The northern region, for example, suffers from peak shortages as high as 15 per cent and energy shortages of nearly 12 per cent!

The question that then arises is: Should we be channelling this energy to Ban­gladesh from its western side? On the other side, the north-eastern parts of India have huge energy resources – both hydropower and hydrocarbons – that the rest of India is unable to access because of the limited transition\transportation opportunities for, and the high costs of, moving these resources around Bangladesh. Just the Brahamaputra basin has a hydropower generation potential of close to 30,000 mw. Not only can we then commit to meet the entire deficit (current and future) of Bang­ladesh from this source, but should also negotiate transit rights through Bangladesh for ourselves so as to be able to access these resources.

There is no doubt that we need to invest in our relationships with our neighbours and be able to cooperate in the energy area recognising the context of larger issues and challenges that face the region. However, to negotiate these short-term agreements with a focus on the here and now without addressing the issue of longer term challenges and opportunities, can at best be described as sub-optimal. Ba­n­gladesh has for long being keen on sourcing hydropower from Nepal and Bhutan but could not succeed in doing so as any such transaction would need to be routed through Indian territory. The main reasons for this desire were, one, the need to diversify energy supply sources and two, to get access to low-cost energy sources. Nepal, too, would benefit from having a customer other than India that it could have access to.

The establishment of transportation links with Ban­gladesh could, in the future, open up the possibility of Bangladesh trading directly, for example, with Nepal unless, of course, the current agreement explicitly precl­udes that. This can be seen as one step in the direction of establishing a regional energy trading market.

Given our prime minister’s commitment to establish an energy ring for the South Asian countries and enhanced energy cooperation toward our common energy security, the India-Ban­gl­adesh pacts should not only be applauded for their purpose but these countries should also be encouraged for further accelerated and large-scale cooperation.

The writer is executive

director at The Energy and Resources Institute

(Teri), New Delhi