General Studies IIIndia and NeighborhoodINTERNATIONAL RELATION

BBIN Motor Vehicles Agreement (MVA)


Recently, India, Bangladesh and Nepal (except Bhutan) finalized an enabling MoU for implementing the long-gestating BBIN Motor Vehicles Agreement (MVA) that is aimed at boosting regional trade and connectivity.

About BBIN 

  • The four South Asian nations had already signed the BBIN Agreement in June 2016 in Thimphu and the accord was seen as a significant symbol of sub-regional unity.
  • Despite ratifications by three partner countries, Bhutan has not yet ratified the deal, citing environmental as well as livelihood concerns.
  • India proposed a SAARC Motor Vehicle Agreement during the SAARC Summit in Kathmandu in November 2014.
  • Due to objections from Pakistan, an agreement could not be reached. India instead pursued a similar motor vehicle agreement with the BBIN known as Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement which was signed in 2015.
  • Some of the key aspects of the agreement are
  • Member states would be permitted to operate their vehicles in each other’s territory for transportation of cargo and passengers.
  • To enter a neighbouring country’s territory, all cars would need an electronic permit, and border security measures across nations’ borders would remain in place.
  • Cargo vehicles will be allowed to enter any of the four countries without the requirement for products to be transferred from one truck to another at the border.

BBIN importance

  • BBIN is a step towards improving the economic situations of these South-Asian countries through regional cooperation.
  • The BBIN agreement was created ‘for the Regulation of Passenger, Personal and Cargo Vehicular Traffic between Bangladesh, Bhutan, India, and Nepal and improve the quality of transportation between these neighbouring countries also aiding the economy.
  • The corridor will enhance connectivity between goods, people and support easier transportation.
  • It will also act as resistance towards growing influence of China in the region as well as portray a strong front regarding sub-regional South-Asian unity.

Key updates

  • Bhutan participated in the meeting as an observer.
  • This was the first meeting of the group since the outbreak of the Covid-19 pandemic, and the last meeting was held in New Delhi in February 2020.
  • The Asian Development Bank (ADB) provided technical and knowledge support to the meeting. 
  • The ADB  has supported the project as part of its South Asian Subregional Economic Cooperation programme, and has been requested to prioritize about 30 road projects worth billions of dollars.
  • In February 2022, the World Bank South Asia programme for BBIN listed projects worth $750 million, for which loans are in “the pipeline”.

Key terms of the Agreement

  • Trans-shipment of goods: Cargo vehicles will be able to enter any of the four nations without the need for trans-shipment of goods from one country’s truck to another’s at the border.
  • Free transport: The agreement would permit the member states to ply their vehicles in each other’s territory for transportation of cargo and passengers, including third-country transport and personal vehicles.
  • Electronic permit: As per the agreement each vehicle would require an electronic permit to enter another country’s territory, and border security arrangements between nations’ borders will also remain.
  • Ultra-security: Vehicles are fitted with an electronic seal that alerts regulators every time the container door is opened.

Implementation status of the agreement

  • The agreement will enter into force after it is ratified by all four member nations.
  • The agreement has been ratified by Bangladesh, India and Nepal.
  • The lower house of the Bhutanese parliament approved the agreement in early 2016, but it was rejected by the upper house in November 2016.
  • Bhutan has requested for a cap to be fixed on the number of vehicles entering its territory

What next?

  • India remains “hopeful” that Bhutan could change its position on the project, it was decided at a meeting in November 2021 to go ahead for now, given that there are no new signals from Thimphu on the project.
  • Progress on the seven-year-old project has been slow, despite several trial runs being held along the Bangladesh-India-Nepal road route for passenger buses and cargo trucks.
  • There are still some agreements holding up the final protocols.

Source: The Hindu

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