Nearly four years after starting the Dhaka-Kolkata bus service, India and Bangladesh on Wednesday agreed to open another road link between the two countries and also to begin talks on resumption of a passenger train service that was snapped over half-a-century ago.

"I hope that Bangladesh's transport minister can travel to Agartala to flag-off the bus service to Dhaka," External Affairs Minister Yashwant Sinha told reporters after the two-day Joint Economic Commission meeting in Dhaka, where the two countries reached an agreement on these two issues.

The bus service is expected to begin in the first week of August.

The countries have been successfully running a Kolkata-Dhaka bus service for nearly four years now.

The two sides also discussed the need for early commencement of a passenger train service between Sealdah and Joydebpur, near Dhaka.

India has suggested a meeting of senior railway officials to discuss necessary modalities.

Passenger movement from Bangladesh to India is one of the highest in the world with the Indian High Commission in Dhaka and the two consulates at Chittagong and Rajshahi issuing nearly 3,000 visas to Bangladeshi nationals every day.

Bangladesh wants to double the frequency of the Dhaka-Kolkata bus, from the six trips a week at present, Indian officials said.

India also announced a fresh line of credit to Bangladesh for infrastructure projects but the two sides failed to make much headway on the key issues of transit and free trade.

India has been demanding transit and transshipment facility from Bangladesh for many years to enable easy access to its Northeastern states.

This is a politically sensitive issue for Dhaka despite a 30-year-old agreement between the two nations for providing such facilities to each other.

Standing by the side of Sinha, his Bangladeshi counterpart Morshed Khan said, "We discussed the (transit) issue and we will continue our discussions."

Khan also said that India has suggested a bilateral agreement on customs issues since most of the problems in the two-way trade arose out of customs policies.

More reports from Bangladesh