Dhaka: The Union Cabinet in Delhi, chaired by Indian Prime Minister Narendra Modi has given its approval to the ‘Agreement on Coastal Shipping between Bangladesh and India’ to carry out coastal movement of goods between the two countries.

Trade between India and Bangladesh would be benefited by way of a reduction in freight charges, according to India’s Press Information Bureau.

It will also improve the utilization of port capacities of Indian ports and open up new opportunities for Indian coastal vessels. It will also help in decongestion of roads especially at the Land custom stations/integrated check posts at the Indo-Bangladesh border.

The Indian ports serving as transshipment ports for Bangladesh cargo will derive benefits by way of enhanced throughput as a result of Indo-Bangladesh coastal trade.

Without getting into the technicalities of the agreement, it aims to establish that India and Bangladesh shall render the same treatment to the other country’s vessels, as it would have done to its national vessels used in international sea transportation.

The commencement of coastal shipping between India and Bangladesh will increase bilateral trade between the two countries and lower the cost of transporting Exim (export-import) cargo. India’s trade with Bangladesh has grown rapidly during the past few years. Bangladesh is now India’s largest trade partner in South Asia.

To reduce the cost of shipping operation, a lower but pragmatic standard of vessel known as River Sea Vessel (RSV) has been prescribed for coastal shipping.

The RSV category has significantly lower construction and operating costs without compromising on the safety of the vessel. For the Indo-Bangladesh coastal shipping, the RSV category of vessel has been agreed upon by both the countries.