Under the deal, signed in the presence of Indian Prime Minister Narendra Modi and his Bangladeshi counterpart Sheikh Hasina in Dhaka, the two countries will swap 200 tiny enclaves, most of them close to the official border. Their inhabitants have been deprived of public services and living in squalid conditions.
Established by a treaty between two former princely states, the 106 Indian enclaves in Bangladesh and 92 Bangladeshi enclaves in India are islands of foreign territory inside each country.
Under the agreement, each country will take over most of the enclaves on its territory and residents will have the right to stay where they are or move to the other side of the border.
The deal was originally agreed in 1974 by Indira Gandhi of India and Sheikh Mujibur Rahman of Bangladesh. Progress stopped for a long time, however, after Mujibur was assassinated in 1975, and subsequent governments failed to agree on the transfer of enclaves.
Dhaka’s Foreign Minister Abul Hassan Mahmood Ali has described the deal, which has since been updated, as “a historic milestone in the relationship between the two neighboring south Asian countries.”
The two prime ministers, along with the chief minister of West Bengal, India Mamata Banerjee, also inaugurated bus services along the border towns of India and Bangladesh.
The two countries are also looking to boost trade and security along the border and fight human trafficking.
Also on Saturday, Adani Power Limited of India and Reliance Power Limited of India signed deals worth over $4.5 billion with state-run Bangladesh Power Development Board (BPDB) to develop six units of power plants to produce 4,600 MW of electricity.
Reliance will invest $3 billion to produce 3,000 MW power, while Adani will set up two coal-fired plants with a total capacity of 1,600 MW, costing more than $1.5 billion.