India agrees $4.5bn deal with Bangladesh in New Delhi

There was no breakthrough, however, in a long-standing dispute about the sharing of water from the Teesta River which flows through both nations although Modi vowed to find a solution to the issue seen as vital for Bangladesh farmers.

India will also extend Line of Credit of 500 million dollars to Bangladesh for defence purchases. He said, spread of radicalization and extremism poses grave threat to India, Bangladesh and entire region. "In implementing this line of credit, we will be guided by Bangladesh's needs and priorities", he said.

In 2011, when former Prime Minister Manmohan Singh had visited Dhaka to sign a number of agreements, including the Teesta water-sharing accord, Banerjee had claimed that an unfair agreement would hurt the people of the state. "Her "zero tolerance" policy inspires us", Modi said.

A gaffe by the Chief of Protocol at the Hyderabad House event in the capital on Saturday afternoon in the presence of Prime Ministers Narendra Modi and Sheikh Hasina had everyone in splits including the two leaders who both had a hearty laugh. The two countries signed 22 agreements in total - 4 in defence, 5 in civil nuclear energy and space and others to further trade and connectivity between the two countries.

On Friday, Prime Minister Narendra Modi in a special gesture, drove to the Delhi airport to receive his counterpart.

She also reiterated her commitment for peaceful border with India free of crime. "Sabka Saath Sabka Vikas" is not only limited to India but our neighbors development as well", he said at the "Sommanona Ceremony" honoring the Indian Martyrs who sacrificed their lives in the liberation war of Bangladesh. PM Modi announced a special medical scheme under which 100 "Muktijoddhas" (warriors of the liberation war) of Bangladesh will be provided medical treatment in Indian hospitals every year. "We will always remember them with gratitude".

Modi jointly launched with Sheikh Hasina train and bus services between Kolkata and Khulna in Bangladesh, and restored the once defunct Radhikapur-Biral rail link between the countries.

Modi, too, paid tribute to Sheikh Mujibur Rahman, but did not mention Indira Gandhi's role in the struggle for Bangladesh.

India has extended a $4.5 billion line of credit to Bangladesh even as the two countries today signed about 25 agreements to increase cooperation in various fields, including nuclear power and defence. It will also build a new airport and upgrade a highway, among 17 projects selected for the use of the loan, Jaishankar said. This brings our resource allocation for Bangladesh to more than 8 billion dollars over the past six years. North Bengal Traders, however, say they were expecting something more than the existing Siliguri-Dhaka Bus service.

The prime minister also offered a munajat seeking continued peace, progress and prosperity of the country.

"We are committed to expanding our relationship with India", said Hasina.

Later, she will meet pay a call on Indian President Pranab at Rastrapati Bhaban, reports BSS.

  • Joanne Flowers