Dhaka: The government is going to undertake a project to set up two Indian economic zones at Mongla in Bagerhat and Bheramara in Kushtia at an estimated cost of $ 88 million, aiming to boost FDI inflow.

Bangladesh Economic Zone Authority (BEZA) under the Prime Minister's Office will implement the proposed project by June 2017.

A BEZA official told UNB that the zones will be developed with funds from the USD 2 billion line of credit from India.

As per the draft Preliminary Development Project Proposal (PDPP), the project aims to create an enabling environment for the establishment of the Indian economic zones. Under the Bangladesh Economic Zones Authority (BEZA) Act, 2010 in G2G model, Bangladesh government will ensure infrastructures such as access road, gas, electrification, land development including all off-site development of economic zone.

Besides, BEZA will ensure some other support services to developer.  

The project also aims to promote balanced development of multi-product industries in different regions of the country, create employment opportunities for the people of Bangladesh and promote FDI through industrialisation and help materialise the Vision 2021 of the government.

Another official at the PMO said the project will increase the scope of employment through Indian FDI in industrial sector, increase labour productivity through transfer of technology, improve career opportunity for local people with acquiring knowledge for industrial development through sustainable development and enhance the capacity of establishment and management of Economic Zones by the BEZA officials.

The official said establishment of the Economic Zones under PPP, G2G, private EZ categories will essentially aims at enhancing FDI and strengthening the economy of Bangladesh. It can also been seen as a way of providing environment for industrialization and greater employment opportunity.

He said it is evident that successful implementation of the Indian economic zones will eventually reduce the trade imbalance between India and Bangladesh.

The annual trade between Bangladesh is around $ 6.5 billion with India exporting around $ 6 billion to Bangladesh while Bangladesh exporting $ 0.5 billion to India.

Earlier on June 6, 2015, a Memorandum of Understanding (MoU) was signed between Bangladesh and India over establishment of Indian Economic Zones during Indian Prime Minster Narendra Modi's visit to Bangladesh.

As per the MoU, the construction of the Zone and Indian investment in the zone will be facilitated though the concessional Line of Credit extended by the government of India to the government of Bangladesh.

India becomes the third country after Japan and China to have shown interest in developing economic zones in Bangladesh.

Another official at the Planning Commission said the Prime Minister's Office has already suggested the Planning Ministry to go ahead with the 'Establishment of Indian Economic Zones in Mongla and Bheramara' and prepare a Development Project Proposal (DPP) soon for consideration by the Executive Committee of the National Economic Council (Ecnec).  

Last month, Ecnec approved the proposed Chinese Economic & Industrial Zone to be set up on 774.25 acres of land at Anwara, Chittagong involving Tk 420.37 crore exclusively for Chinese investors.