Bangladesh and Pakistan cosy up, resume direct trade after 50 years with shipments of rice

Bangladesh and Pakistan have resumed direct trade for the first time since the 1971 Liberation War that gave Dhaka freedom from Islamabad in yet another worry point for India.

The first shipment of 50,000 tonnes of rice has left Pakistan’s Port Qasim for Bangladesh under a government-to-government deal, signalling improvement in diplomatic ties after decades of estrangement, Reuters reported on Monday.

The rice shipment, split into two consignments of 25,000 tonnes each, is being transported via the Pakistan National Shipping Corporation (PNSC). This marks the first time a PNSC vessel will dock at a Bangladeshi port.

The agreement follows a significant political shift in Dhaka, where Nobel laureate Muhammad Yunus assumed leadership of an interim government after protests forced long-time prime minister Sheikh Hasina out of power and into exile in India.

Hasina had maintained close ties with New Delhi while keeping Islamabad at a distance during her 15-year tenure. In contrast, Yunus has advocated for a fresh start with Pakistan, a sentiment reflected in his recent meetings with Pakistani Prime Minister Shehbaz Sharif.

Bangladesh had been importing rice from Vietnam at $474.25 per tonne before striking a deal with Pakistan. However, as food prices surged by 15-20 per cent in recent months in Bangladesh, Dhaka opted to purchase white rice from Pakistan at a higher rate of $499 per tonne.

The decision reflects the government’s urgency to stabilise the domestic market. To give further relief to the economy, Bangladesh also removed import duties and ramped up international procurement.

Beyond trade, diplomatic and military cooperation between Islamabad and Dhaka has seen unprecedented developments. Last month, a four-member delegation from Pakistan’s Inter-Services Intelligence (ISI), led by Lt Gen Muhammad Asim Malik, visited Bangladesh, sparking discussions on security ties.

Reports also suggest Bangladesh is considering the procurement of JF-17 Thunder fighter jets, jointly developed by Pakistan and China, as part of its military modernisation plan under ‘Forces Goal 2030’.

Trade between the two countries has surpassed $1 billion, with bilateral exchanges increasing by 27 per cent between August and December 2024, according to a report in the Pakistani newspaper Dawn.

Pakistani high commissioner to Bangladesh Mohammad Iqbal Hussain Khan noted the growing demand for cotton, sugar, and rice from his country in Bangladesh, while Dhaka sees potential in exporting pharmaceuticals, garments, and jute to Islamabad.

A memorandum of understanding was signed between the two countries’ apex trade bodies on 13 January to establish a joint business council, aiming to expand trade fourfold within a year.

Bangladesh and Pakistan have resumed direct trade for the first time since the 1971 Liberation War that gave Dhaka freedom from Islamabad in yet another worry point for India.

The first shipment of 50,000 tonnes of rice has left Pakistan’s Port Qasim for Bangladesh under a government-to-government deal, signalling improvement in diplomatic ties after decades of estrangement, Reuters reported on Monday.

The rice shipment, split into two consignments of 25,000 tonnes each, is being transported via the Pakistan National Shipping Corporation (PNSC). This marks the first time a PNSC vessel will dock at a Bangladeshi port.

The agreement follows a significant political shift in Dhaka, where Nobel laureate Muhammad Yunus assumed leadership of an interim government after protests forced long-time prime minister Sheikh Hasina out of power and into exile in India.

Hasina had maintained close ties with New Delhi while keeping Islamabad at a distance during her 15-year tenure. In contrast, Yunus has advocated for a fresh start with Pakistan, a sentiment reflected in his recent meetings with Pakistani Prime Minister Shehbaz Sharif.

Bangladesh had been importing rice from Vietnam at $474.25 per tonne before striking a deal with Pakistan. However, as food prices surged by 15-20 per cent in recent months in Bangladesh, Dhaka opted to purchase white rice from Pakistan at a higher rate of $499 per tonne.

The decision reflects the government’s urgency to stabilise the domestic market. To give further relief to the economy, Bangladesh also removed import duties and ramped up international procurement.

Beyond trade, diplomatic and military cooperation between Islamabad and Dhaka has seen unprecedented developments. Last month, a four-member delegation from Pakistan’s Inter-Services Intelligence (ISI), led by Lt Gen Muhammad Asim Malik, visited Bangladesh, sparking discussions on security ties.

Reports also suggest Bangladesh is considering the procurement of JF-17 Thunder fighter jets, jointly developed by Pakistan and China, as part of its military modernisation plan under ‘Forces Goal 2030’.

Trade between the two countries has surpassed $1 billion, with bilateral exchanges increasing by 27 per cent between August and December 2024, according to a report in the Pakistani newspaper Dawn.

Pakistani high commissioner to Bangladesh Mohammad Iqbal Hussain Khan noted the growing demand for cotton, sugar, and rice from his country in Bangladesh, while Dhaka sees potential in exporting pharmaceuticals, garments, and jute to Islamabad.

A memorandum of understanding was signed between the two countries’ apex trade bodies on 13 January to establish a joint business council, aiming to expand trade fourfold within a year.

Cultural ties have also seen renewed engagement. Pakistani qawwali singer Rahat Fateh Ali Khan performed twice to packed audiences in Dhaka in December, reflecting warming people-to-people relations.

This came after two cargo ships from Karachi docked at Chittagong port in November and December, marking the first direct maritime trade between the nations in over five decades.

These developments are being closely watched by India, given Hasina’s historical alliance with New Delhi. Under her leadership, Dhaka maintained a strategic distance from Islamabad, and her ousting has led to speculation about a recalibration of Bangladesh’s foreign policy.

External affairs ministry spokesperson Randhir Jaiswal recently stated that India is “monitoring all developments in the neighbourhood that pertain to national security”.

Direct flights between Pakistan and Bangladesh are also expected to resume within months.

This article has been republished from The Telegraph Online.