The main opposition Bangladesh Nationalist Party of ex-prime minister Khaleda Zia, however, had said the $1 billion deal with India was against the national interest.
Indian finance minister Pranab Mukherjee arrived here today with a billion dollar credit package on a four-hour long visit, during which he will also call on prime minister Sheikh Hasina.
Mukherjee, who is the first high-profile Indian leader to visit Bangladesh after Hasina's tour to New Delhi in January, was accorded a red carpet welcome at the city's Hazrat Shah Jalal International Airport.
A special Indian Air Force jet carried the influential leader of India's ruling Congress-led government. His Bangladeshi counterpart, Abul Maal Abdul Muhith, received him on the VVIP tarmac of the airport, where a tiny tot offered him a bouquet.
"We (India) are committed to assisting Bangladesh in addressing its priorities for development," Mukherjee said in an arrival statement. His visit will be marked by the signing of a $1 billion loan deal, the largest line of credit received by Bangladesh under a single agreement.
Mukherjee, who is also set to hold talks with Muhith, his host foreign minister Dipu Moni and Sheikh Hasina during the tour, said Dhaka-New Delhi ties touched a new high following Hasina's "landmark" visit to India earlier in the year.
"A forward looking and comprehensive joint communiqué has been adopted by the two leaders (Hasina and Indian prime minister Manmohan Singh). I am happy that considerable progress has been made in the implementation of several important initiatives taken in the communiqué," he said.
Mukherjee referred to the close bonds of friendship based on common heritage, historic, linguistic and cultural ties and added, "We need to continue to build on these commonalities and promote the well-being of our people to greater economic engagements."
India's Exim Bank will sign the $1 billion Line of Credit agreement with Bangladesh's economic relations division. The loan will be used for 14 projects, mostly related to development of railway and communications infrastructure in Bangladesh, particularly to facilitate trans-shipment of Indian goods to the isolated northeastern region through Bangladesh.
Commerce minister Faruque Khan said yesterday that Dhaka was expected to seek expeditious Indian steps to remove tariff and non-tariff barriers on Bangladeshi products in line with a summit-level understanding in January during talks with Mukherjee.
Foreign ministry officials said the entire gamut of bilateral relations and issues, including sharing of Teesta river water, were likely to come up for discussions between the Indian minister and Bangladesh leaders and Mukherjee was expected to review the implementation of agreements reached between the two countries at that time.
"The process of implementing the political level decisions is slower than expected, largely due to bureaucratic entangles," Khan said when asked for comments on newspaper reports that Mukherjee's visit was apparently aimed at mollifying the upset Bangladeshi leadership about the slow progress made in implementing the deals reached during Hasina's New Delhi tour.
The main opposition Bangladesh Nationalist Party (BNP) of ex-prime minister Khaleda Zia, however, had said the $1 billion deal with India was against the national interest. "The government is getting the loan from the Indian bank with an interest rate seven times higher than that from any multi-national bank or donor agency," BNP said in a statement late yesterday, adding that the amount would be spent on infrastructure projects that will eventually benefit India, while Bangladeshis will have to repay the loan.
BNP standing committee member and MP MK Anwar, who read out the statement, said that Bangladesh will incur a net loss of 40,000 crore takas on the deal, adding that his party will stage street protests if the government signed "an unfair deal like this".
"The implementation of the projects with the Indian loan would serve Indian interests more than Bangladesh's," he had said. Officials earlier said it was the largest amount of credit Bangladesh has ever received under a single deal. New Delhi offered the loan under an agreement reached between the two countries in January.
BNP chief Zia earlier said her party wanted good relations with New Delhi when newly appointed Indian high commissioner to Dhaka Rajeet Mitter called on her in February. Relations with India appear to be at the centre stage of Bangladesh politics, with the opposition alleging that Hasina "sold out" the country by signing three agreements and two protocols during her New Delhi tour.
Zia also feared that her arch-rival had reached what she said was a "secret deal" during her New Delhi visit in January, but Hasina dismissed the BNP's allegations of signing a secret security pact, telling Parliament, "The question of signing any secret deal doesn't arise at all (and) if the opposition knows anything about it, let them make it public."
Hasina earlier defended the deals, saying they paved the way for enhanced bilateral and regional cooperation to fight "poverty, our common enemy" and added, "Opposing India is nothing new in Bangladesh... It became a habit of some people and we have nothing to do about it."
Dhaka-New Delhi relations have witnessed ups and downs in the past several decades, but it is said to have witnessed its lowest ebb during the 2001-2006 tenure of the BNP-led four party right wing coalition. Ties started improving again during the subsequent military-backed interim administration.
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