The story so far: Prime Minister Sheikh Hasina returned to power in Bangladesh for a historic fourth straight term earlier this month after her party, the Awami League, secured two-thirds of the seats in the January 7 national elections. The elections saw an abysmal 40% voter turnout, marked by the Opposition’s boycott and sporadic incidents of violence.
Shortly after the results were announced, Ms. Hasina expressed her gratitude to “trusted friend” India, while PM Narendra Modi was among the first world leaders to congratulate the 76-year-old leader, underlining New Delhi’s commitment to deepening the “people-centric partnership” and illustrating the close bilateral relationship between the South Asian neighbours.
India considers Bangladesh a critical ally in the region. New Delhi will look to advance its interests with the Awami League government, in line with its ‘Act East’ policy to counter China’s expanding influence in the Indo-Pacific and build a friendly and stable neighbourhood.
India stands to benefit from the triumph of the Awami League, considering that Opposition leader and former PM Khaleda Zia has been vocal in her criticism of the Hasina government’s positive ties with India. Ms. Hasina’s emphasis on multilateral cooperation with India and her positive rapport with the incumbent Indian PM puts the bilateral relationship on a firmer footing. The foreign policy alignment between the two nations promises increased collaboration in traditional and new areas, and provides an opportunity for the two countries to address unresolved conflicts.
However, India is likely to approach the situation with caution amid rising concerns over an ‘unfair’ election, Dhaka’s tense relations with Washington, and its increasing alignment with Beijing.
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Building the ‘model’ partnership
India’s relationship with Bangladesh is anchored in common history, heritage, culture and geographical proximity, the foundation of which was laid in the 1971 Bangladesh Liberation War. India provided critical military and material support to assist Bangladesh in its fight for independence from Pakistan. This became a primary factor in shaping the newly independent nation’s policy, as acknowledged by ‘Bangabandhu’ Sheikh Mujibur Rahman: “Friendship with India is a cornerstone of the foreign policy of Bangladesh.”
Despite this, relations soured within a few years as military regimes took control. There was a rise in anti-India sentiment in the mid-1970s over issues ranging from boundary disputes and insurgency to the sharing of water. The instability continued for a few decades until Sheikh Hasina stormed to power in 1996 and scripted a new chapter in bilateral ties with a treaty on the sharing of Ganga waters. She returned for a second term in 2009, and bilateral relations between the two governments further improved following a slew of measures.
There have been a few ups and downs, but India and Bangladesh have built cooperation in trade, energy, infrastructure, connectivity, defence, security and science over the past 15 years. “Inheriting her father’s legacy, Ms. Hasina is convinced of the need for fruitful ties between the two countries, which has translated into one of the most striking features of her foreign policy,” notes a paper on the continuity and change in Bangladesh’s Indo-Pacific outlook.
Ms. Hasina visited India in 2010, followed by then PM Manmohan Singh’s historic tour to Dhaka in 2011. India announced duty-free access to several Bangladesh products and a Framework for Cooperation pact cemented their trade partnership. Addressing India’s security concerns about insurgency and extremism, she ordered a crackdown on anti-India groups, shut down terror camps and handed over “most-wanted” terrorists and criminals to India. Her government also enforced stricter border controls to check the influx of illegal migrants.
The then PM Manmohan Singh and his Bangladeshi counterpart Sheikh Hasina exchange signed agreements during a meeting in Dhaka, Bangladesh, 2011.
The relationship gained momentum after the NDA came to power in 2014.
India and Bangladesh gradually expanded their partnership to strengthen cooperation in trade, development and water-sharing. The two countries successfully resolved long-pending issues, like the land boundary agreement (LBA) in 2015 and a maritime dispute over territorial waters.
During Sheikh Hasina’s visit to India in September 2022, India and Bangladesh inked an agreement on the sharing of the waters of the common border river Kushiyara — the first such pact since the Ganga Waters Treaty of 1996. PM Modi termed the period a ‘Shonali Adhyaya’ or golden chapter in diplomacy.
PM Narendra Modi and Bangladesh’s Sheikh Hasina jointly inaugurate the India-Bangladesh Friendship Pipeline (IBFP) from Siliguri to Parbatipur via video conferencing. | Photo Credit: ANI
Accelerating economic cooperation
Bilateral trade between India and Bangladesh has grown steadily over the last decade. Bangladesh has emerged as India’s largest trade partner in South Asia, with bilateral trade reaching $18 billion in 2021-2022 from $10.8 billion in 2020-21, though there was a dip in 2022-23 when the trade dropped to $14.2 billion due to the COVID pandemic and the Russia-Ukraine war. Reflective of the growing trust between the two nations, Bangladesh started using rupees in its trade transactions with India last year to reduce dependence on the U.S. dollar and strengthen regional currency.
India is also the second biggest trade partner of Bangladesh, with exports amounting to $2 billion in Indian markets. Political stability, however, is imperative for bilateral trade; this was evident in the pre-election season in Bangladesh when exports declined by over 13% between April and October and imports saw a dip of 2.3%.
With the continuation of the previous regime in Bangladesh, New Delhi and Dhaka are poised to take forward discussions on a free trade agreement to enhance their economic partnership and boost investments.
In 2022, both nations successfully concluded a joint feasibility study on a Comprehensive Economic Partnership Agreement (CEPA). The agreement, typically designed to reduce or eliminate customs duties on traded goods and simplify trade norms, is anticipated to open up broader social and economic opportunities, ultimately raising living standards in both countries. The CEPA gains additional significance as Bangladesh is set to lose its Least Developed Country (LDC) status after 2026, thereby losing its duty-free and quota-free market access in India. Dhaka will be eager to finalise a Free Trade Agreement (FTA) with New Delhi, yet pursue the China-backed Regional Comprehensive Economic Partnership (RCEP). This dual approach raises concerns for India, as the dynamics of regional economic partnerships continue to evolve.
The two countries are members of various regional trade agreements such as the Asia Pacific Trade Agreement (APTA), the SAARC Preferential Trade Agreement (SAPTA) and the Agreement on South Asian Free Trade Area (SAFTA) which govern the tariff regimes for trade. Bangladesh is also part of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) which has its headquarters in Dhaka. The group is a multilateral regional organisation established to improve cooperation between littoral and adjacent countries in the Bay of Bengal region.
As for informal trade, more border haats are likely to come up as the two countries have emphasised the potential of weekly markets and expressed willingness to set up over 15 new haats on the border.
India will play a crucial role as Ms. Hasina works to get Bangladesh’s sputtering economy back to achieve the country’s vision of attaining upper middle-income status by 2031.
Regional connectivity for a stronger South Asia
Bangladesh, as India’s immediate neighbour in the East, plays a crucial role in its strategic plans. Sharing 54 rivers and a 4,096-km border, the India-Bangladesh border is the longest land boundary India has with any of its neighbours.
The two countries have revived old railway links and taken up several new multifaceted projects under the leadership of PM Hasina in the past decade to expand bilateral and sub-regional connectivity, aligning perfectly with India’s vision to develop the Northeast and foster integration across South and Southeast Asia.
As a “major development partner” of Bangladesh, India is funding several infrastructure and connectivity projects. Since 2010, India has extended Lines of Credits worth over $7 billion.
PM Modi and Sheikh Hasina made history last year when they inaugurated the Akhaura-Agartala rail link that connects Bangladesh and the northeast through Tripura. The link has given India access to Chattogram and Mongla posts in Bangladesh for the movement of cargo. It is likely to boost small-scale industries and develop Assam and Tripura. The Khulna-Mongla Port rail link is another project constructed with financial assistance from India.
As for passenger trains, there are three routes operational at present. The Maitree Express connecting Kolkata with Dhaka was started in 2008 after a hiatus of over 40 years. Later, the Kolkata-Khulna Bandhan Express and New Jalpaiguri-Dhaka Mitali Express were added to the network. A cross-border bus service operates from Shillong, Agartala and Kolkata to Dhaka.
PM Narendra Modi, his Bangladeshi counterpart Sheikh Hasina and West Bengal CM Mamata Banerjee at the flag-off ceremony of bus services between Bangladesh and India, in Dhaka, 2015.
India is also collaborating with Bangladesh to upgrade the India-Bangladesh Protocol (IBP) route and the Protocol on Inland Water Transit and Trade (PIWT&T) for transport of cargo. The BIMSTEC Master Plan for Transport Connectivity focuses on connecting major transport projects in India, Bangladesh, Myanmar and Thailand, thereby establishing a shipping network.
The Hasina government has also expressed its eagerness to partner in the ongoing India-Myanmar-Thailand trilateral project — a 1,400-km highway that will link India with Southeast Asia by land.
In the energy sector, Bangladesh imports nearly 2,000 megawatts of electricity from India. The joint venture of the Maitree Super Thermal Power Project in Rampalbegan began commercial production last year. India also extended financial assistance for the construction of the India-Bangladesh Friendship Pipeline for the supply of diesel from Siliguri to Parbatipur.
India’s attention will primarily be directed towards the Matarbari Port, located about 100 km from Tripura, which Bangladesh is building with Japanese assistance. The port, pitched as a “game changer,” will establish a crucial industrial corridor linking Dhaka and the northeast part of India.
Unresolved disputes
The looming Teesta dispute will take centre-stage in the agenda of the Hasina-led government. The issue revolves around the sharing of Teesta’s waters, with Bangladesh seeking an equitable distribution.Back in 2011, during PM Manmohan Singh’s visit to Dhaka, objections from West Bengal CM Mamata Banerjee derailed a budding deal. China later stepped in with a river management proposal, seizing an opportunity in the absence of an Indian agreement.
Another contentious matter on the table is the Rohingya issue. New Delhi and Dhaka hold differing stances on this humanitarian crisis. The Hasina government aims for peaceful repatriation to Myanmar, but its talks with the military junta have been unsuccessful so far. Bangladesh seeks India’s cooperation to influence Myanmar, but the current Modi government, maintaining ties with the junta, asserts that it will deport Rohingyas from its mainland.
Cross-border terrorism, infiltration, and human trafficking are additional threats to internal security. Sreeparna Banerjee of the Observer Research Foundation (ORF) notes the complexities. “Around 60% of the border is fenced and a large section of the border runs through rivers, fishponds, farming lands, villages... Thus, guarding the border zones is not simple due to improper roads and difficult terrains. Consequently, it becomes easier for illegal groups to misappropriate these porous stretches,” she says.
The rise of majoritarian forces adds another layer to the complex landscape. While violence against Muslims has increased in India in the past few years, PM Hasina has stood at the forefront to condemn the attacks and express displeasure over comments by Indian leaders on “illegal” immigrants.
The way ahead
Political stability in Bangladesh holds immense significance for India. Concerns loom over the possibility of political unrest in the country, fuelled by allegations of an unfair election, mounting international pressure, with potential ripple-effects across the border.
The strained relations between Bangladesh and the U.S. pose another formidable challenge for India, especially amid China’s growing influence in the Indo-Pacific region. The U.S. has been vocal in its criticism of the Awami League government, exerting pressure on Sheikh Hasina over “democratic backsliding”. In 2021, the Biden administration slapped sanctions on a Bangladeshi anti-crime and anti-terrorism task force, citing human rights violations, and escalated tensions by announcing a policy to restrict visas for Bangladeshis it believed to be responsible for undermining the democratic election process in the country, leading to a backlash.
There seemed to be a temporary improvement in the relationship during the G20 summit in New Delhi last year, but recent events suggest that tensions have re-emerged. The U.S. has rejected the election outcome as unfair, which further complicates the diplomatic situation for India.
Bangladesh PM Sheikh Hasina and her daughter Saima Wazed interact with US President Joe Biden at the G20 Summit in New Delhi, 2023.
Adding to India’s concerns is the deepening relationship between Bangladesh and China under Ms. Hasina, marked by substantial Chinese investments in infrastructure in recent years. China built 12 highways, 21 bridges and 27 power and energy projects in Bangladesh over the past few years, as per Chinese Ambassador to Bangladesh.
Beijing’s efforts to strengthen ties with Dhaka have raised eyebrows in India. “For China, Bangladesh is a crucial foothold in the Bay of Bengal region and a critical node in its flagship Belt and Road Initiative. With ties with India dwindling, Sri Lanka remaining wrapped in a debt crisis, and Myanmar facing political instability, Bangladesh is China’s best option to break out of its ‘East Asia mould’ and strengthen its maritime presence in the Indian Ocean,” says ORF fellow Sohini Bose.
However, the Bangladesh PM has maintained that her government is “very much careful” about its partnership with China. Affirming India’s strategic importance, Ms. Hasina has reassured New Delhi that its development partnership with Beijing will not undermine the historical bond it shares with India.
Navigating these complex geopolitical dynamics will undoubtedly be a critical aspect of India’s foreign policy in the region, but there will be a sense of comfort with a pro-India Sheikh Hasina at the helm of affairs in Bangladesh.
- Prime Minister Sheikh Hasina returned to power in Bangladesh for a historic fourth straight term
- Bangladesh has emerged as India’s largest trade partner in South Asia, with bilateral trade reaching $18 billion in 2021-2022 from $10.8 billion in 2020-21
- With the continuation of the previous regime in Bangladesh, New Delhi and Dhaka are poised to take forward discussions on a FTA to enhance their economic partnership and boost investments
