DHAKA, Bangladesh (AP) — India and Bangladesh on Saturday finalized a much-delayed land swap agreement to settle a long-running border dispute.
The deal — initially reached in 1974 but only recently ratified by India's Parliament — calls for the transfer of 111 border enclaves to Bangladesh in exchange for 51 that will become part of India. More than 50,000 residents will get citizenship after the agreement is implemented.
Relations between India and its smaller neighbor have significantly improved since Bangladeshi Prime Minister Sheikh Hasina promised that her administration would not allow India's separatist insurgents to use the porous 4,000-kilometer (2,500-mile) border to carry out raids in India.
Aided by India, Bangladesh gained independence from Pakistan following a bloody nine-month war in 1971.
Hasina and Indian Prime Minister Narendra Modi, who arrived in Bangladesh on Saturday for a two-day visit, exchanged the ratification documents for the land swap agreement before holding official talks.
Bangladeshi Foreign Affairs Minister A.H. Mahmood Ali said a number of other agreements covering trade, security and connectivity are also expected to be signed, as well a framework for combating human trafficking, counterfeit currency and cooperation for the sea-based "blue economy."
Officials said India could offer a $2 billion line of credit to Bangladesh for infrastructure development inside the country.
Ali said Bangladesh was focusing on better connectivity with India by introducing new bus service with Indian states. India faces difficulties reaching its isolated and impoverished northeastern region, and any passage through Bangladesh could cut hundreds of kilometers (miles) to get to those areas.
Energy-starved Bangladesh is also looking forward to importing 600 megawatts of electricity from India, in addition to the 500 megawatts it currently imports, Ali said.
Separately, Bangladesh signed memoranda of understanding Saturday with two Indian companies to set up power plants for producing 4,600 megawatts of electricity, Bangladeshi authorities said in a statement.
The state-run Power Development Board signed the deals, which are worth $5.5 billion, with Indian companies Adani Power Limited and Reliance Group, the statement said.
Adani Power Limited will invest $2.5 billion to set up a coal-based power plant with a capacity of 1,600 megawatts of power, according to the statement. The Reliance Group will set up another gas-fired power plant with capacity of 3,000 megawatts of power, investing $3 billion.
Bangladesh and India have 54 common rivers and the sharing of water from them is a contentious issue for the countries. Officials say the two leaders will discuss how to effectively deal with the issue.