Why does Bangladesh form a crucial part of the G20 summit?

The G20 summit is currently being held in New Delhi

The G20 summit being held on September 9 and 10 in New Delhi included a key event wherein critical issues relating to water resources, power and energy were discussed by Prime Minister Narendra Modi and Bangladesh Prime Minister Sheikh Hasina.

The two prime ministers held a bilateral talk and signed three memoranda of understanding (MoUs) which focussed on cooperation on agricultural research and education between the Bangladesh Agricultural Research Council and the Indian Council of Agricultural Research, extension of the Cultural Exchange Programme from 2023 to 2025, and network connectivity between Bangladesh Bank and the National Payments Corporation of India to facilitate transactions in rupees and taka for trade.

Why Bangladesh?

Economy

Bangladesh’s place in the summit holds special importance as this is the first time the country is attending the same, along with it being the only South Asian country to be invited this year, along with its economic growth of 5 to 7 percent each year over the last decade. With a population of 160 million, it’s the seventh most populated country in the world, with a high drive for furthering economic growth. PwC projects Bangladesh to be the 23rd largest economy by 2050 and the country has passed India in multiple economic as well as social sectors.

Trade

In 2021-22, Bangladesh also emerged as India’s largest trading partner within the South Asian region. Despite the COVID-19 pandemic, bilateral trade has continued to rise at the rate of 14 percent from $9.46 billion in 2019 to $10.78 billion in 2021. The growing importance of the Bay of Bengal, particularly due to China's expanding and assertive presence in this maritime region, has prompted India to strengthen its ties with the countries bordering the Bay. India sees the Bay of Bengal as a crucial area of interest and aims to maintain its dominant position there. Additionally, given the ongoing challenges on its western border, India is increasingly focused on building stronger relationships with its eastern neighbours to advance its Indo-Pacific objectives. In both of these endeavours, Bangladesh, as India's immediate neighbour to the east and situated north of the Bay of Bengal, holds a central and pivotal role.

Geography

Tucked away in the middle of West Bengal and the landlocked states of the seven sisters, Bangladesh’s geographical location provides a bridge between South Asia and Southeast Asia. It gives India the leverage to create a regional hub, thus connecting Nepal, Bhutan, Myanmar and China via both land as well as sea.

Significance in G20

India's top goal within the G20 is to advocate for a restructured form of international cooperation that fosters responsible, inclusive, fair, balanced, and representative global systems capable of tackling modern challenges. It's crucial for India that Bangladesh, a member of several regional multilateral organisations in India's vicinity such as SAARC, BIMSTEC, and IORA, supports India's ambitions within the G20, so that India's G20 agenda can also have an impact on these regional platforms.

Over the past decade, the arena of digital payments has shown promising results in Bangladesh. With changes in consumer behaviour and the COVID-19 pandemic, contactless and cashless transactions have shown immense growth. The nation has achieved significant advancements in various aspects of development, with a 57 percent rise in financial inclusion from 2013 to 2018 and a 31.5 percent internet penetration rate as of the start of 2022.Ddigital payments as Mobile Financial Service (MFS) transactions increased by 7 percent in the third quarter of FY 2019-20. As a result, an MoU on furthering digital payments was signed between India and Bangladesh.

Who else has their eye on Bangladesh?

Apart from India, many other powers have their own ideas to establish relations with Bangladesh.

China also wants to include Bangladesh to grow as a prominent nation. Beijing has already roped the country into its Belt and Road Initiative and has massively invested in Bangladesh’s extension of duty-free access to most goods of the country.