India-Bangladesh Relations – Explained Pointwise

Bangladesh is on the edge once again after the ‘July Revolution‘ leader Sharif Osman Hadi dies due to gunshot injuries. It led to protests in Dhaka & attacks on newspaper offices. The protests have also been witnessed near Indian High Commission in Dhaka & Assistant High Commissions in Chittagong, Khulna & Rajshahi over the last few days.

Historical and Geographical Foundations:

Political Evolution and Recent Developments (2024-25):

• Political Transition: Student-led protests in 2024 led to Sheikh Hasina’s exit and the establishment of an interim government led by Muhammad Yunus. While Yunus has underscored “fair and balanced” relations with India, some of his remarks – like describing Northeast India as “landlocked” – sparked sensitivities.
• Attacks on minorities across both the borders: The ethnic attacks on Bangla-speaking Hindus in Bangladesh and the attacks on Bangladeshi’s in India have strained the India-Bangladesh relations.
• Resurfacing of security challenges: There are risks of emergence of security challenges by the anti-India groups as encountered during the earlier BNP-Jamaat years. With the continuing tensions on the border with Pakistan, Indian Army’s long standoff with the PLA in eastern Ladakh, has created a security-nightmare for India.
• Threat to India’s connectivity with the North-east: A further deterioration in Indo-Bangladesh has restricted India’s access to the Northeast. This region’s connection to mainland India will only remain through the narrow “Chicken’s Neck”. With the Myanmar border remaining extremely volatile, the source of unrest in India’s Northeast will increase.
• Jeopardized the Bilateral trade and FTA: Sheikh Hasina’s exit has jeopardized the growing bilateral trade ties between India and Bangladesh. There has also been stagnation of talks in the potential free trade agreement (FTA) between the two countries.
• Deterioration of people-people ties- There are real risk of blowback from the Bangladeshi people and the new power centres in Dhaka- some of whom will carry past grudges against India.
• Geopolitical challenges: Pakistan and China will see the political change in Bangladesh as an opportunity to challenge India’s presence in the country and try to tar it with a pro-Hasina brush.
• Recent Policy Shifts and Frictions:
  • Transshipment Facility Withdrawal: India revoked Bangladesh’s right to ship exports through Indian ports citing congestion; Dhaka saw it as damaging to trade competitiveness.
  • Extradition Tension: The interim government has sought Hasina’s extradition from India – causing diplomatic discomfort.
  • Minority Concerns: Reports of violence against Hindus post-regime change have worried New Delhi.
  • China’s Outreach: Beijing has stepped up diplomatic and infrastructure engagement, raising strategic concerns in India.
  • Summoning of Bangladesh High Commissioner: India recently summoned the Bangladesh High Commissioner in India over the deteriorating security environment in the country & the threats posed by the extremists elements to the security of the Indian mission in Dhaka.

What is the significance of Bangladesh for India?

1. Geo-strategic: Bangladesh holds significant geostrategic importance for India as its eastern neighbour. It provides India with access to the Bay of Bengal and serves as a vital route for trade and connectivity with Southeast Asia.
2. Geo-political: A stable and friendly Bangladesh is crucial for India’s security. Geopolitical cooperation on issues such as counter-terrorism and border management is essential for maintaining peace in South Asia. Moreover, Bangladesh’s support is important for India’s bid for a permanent seat in the UN Security Council (UNSC).
3. Economic: Bangladesh is a key economy for India’s exports and bilateral trade. Strengthening economic ties with Bangladesh is vital for India to achieve its goals under the new Foreign Trade Policy and its vision of becoming a $5 trillion economy.
4. Cultural and Civilisational: Bangladesh shares deep cultural and civilisational ties with India, including a large Bengali Hindu population and several religious-cultural sites such as Ranir Bunglow Temple and Bhoj Vihara that reflect shared heritage.
5. International Cooperation: Strong India–Bangladesh cooperation is essential for the success of regional and global platforms like BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), SAARC (South Asian Association for Regional Cooperation), and international climate forums such as the COPs under the UNFCCC.

What are the areas of Cooperation between India and Bangladesh?

1. Trade and Economic Cooperation: Bilateral trade crossed USD 13 billion in 2023–24, making Bangladesh India’s top trading partner in South Asia. India provides duty-free access on most goods under the South Asian Free Trade Area (SAFTA). Both countries have also started Free Trade Agreement (FTA) negotiations to further ease trade and investment.
2. Connectivity and Infrastructure: Cross-border links like the Akhaura–Agartala rail and Khulna–Mongla Port rail line improved regional connectivity. Bus routes connect major cities, and India provides USD 8 billion in Lines of Credit (LOC) for infrastructure development. Ports access facilitates trade with India’s Northeast.
3. Water and River Cooperation: The 1996 Ganga Water Treaty guides water-sharing, while the Joint Rivers Commission (JRC) manages floods, irrigation, and data sharing. Cooperation continues across 54 rivers, though the Teesta River dispute remains unresolved.
4. Security and Border Management:
   1. Anti-India terror groups were dismantled under Sheikh Hasina.
   2. Border Security Force (BSF)–Bangladesh Border Guard (BGB) coordination reduced cross-border crimes, and joint exercises like Exercise Sampriti (Army) and Exercise Bongosagar (Navy) enhanced defence cooperation.
   3. The 2015 Land Boundary Agreement (LBA) settled enclave disputes.
5. Energy and Power Cooperation: India supplies around 2,000 MW of electricity and diesel via the India–Bangladesh Friendship Pipeline, strengthening Bangladesh’s energy security. Both nations are exploring renewable energy collaboration under One Sun One World One Grid (OSOWOG).
6. Multilateral and Regional Cooperation: Both countries work closely in Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), Bangladesh, Bhutan, India, Nepal Initiative (BBIN), and South Asian Association for Regional Cooperation (SAARC) for trade, connectivity, and development. They also cooperate on climate change and disaster resilience through global forums like United Nations Framework Convention on Climate Change (UNFCCC) and Conference of Parties (COP) summits.
7. Cultural and People-to-People Ties: Shared language, literature, and religion create strong cultural bonds. Heritage sites like Ranir Bunglow Temple and Bhoj Vihara highlight common history, reinforced by cultural exchanges and celebrations like Mujib Borsho (Birth Centenary of Sheikh Mujibur Rahman).
8. Tourism and Education Cooperation: Bangladeshis form the largest group of tourists in India, with joint promotion of cultural and Buddhist tourism circuits. Student exchanges and scholarships have strengthened educational links.
9. Health and Medical Cooperation: Bangladesh accounts for over 35% of India’s medical tourists, contributing more than 50% of medical tourism revenue. Partnerships include medical visa facilitation, hospital collaboration, and telemedicine services.
10. Counter-Terrorism and Intelligence Sharing: Bangladesh’s crackdown on anti-India insurgents under Sheikh Hasina boosted security cooperation. Both nations coordinate on intelligence sharing, counter-terrorism operations, and cybersecurity initiatives, ensuring regional stability.

What are the other Challenges in India-Bangladesh Relations?

1. Sharing of Transboundary River Waters: India and Bangladesh share 54 common rivers, but only two transboundary water-sharing treaties have been signed so far: the Ganga Waters Treaty and the Kushiyara River Treaty. A major point of contention remains the Teesta River dispute, with Bangladesh seeking equitable distribution of its waters, which has not been agreed upon by India and the state of West Bengal.
2. Deportation of Rohingyas: India and Bangladesh have mutual but sometimes conflicting interests regarding the deportation of Rohingyas to mainland Myanmar. India prioritizes deportation from its own territory first and then later facilitates deportation from Bangladesh to Myanmar.
3. Cross-Border Terrorism and Infiltration: Terrorism and infiltration across the Bangladesh border pose significant internal security threats to India. Activities like armed dacoity in border districts, fake currency transfer, cattle smuggling, and prostitution have also raised security concerns.
4. Drug Smuggling and Trafficking: According to the 2007 International Narcotics Control Board (INCB) report, India remains a prime transit route for heroin trafficking from South Asia to Europe through Bangladesh.
5. Growing Chinese Influence in Bangladesh: Bangladesh is an active partner in China’s Belt and Road Initiative (BRI). China has invested in 12 highways, 21 bridges, and 27 power and energy projects in Bangladesh. This growing involvement may undermine India’s regional standing and impede its strategic aspirations.
6. Rising Radicalization and Minority Persecution: The surge in religious extremism and mistreatment of minorities in Bangladesh poses threats to both internal stability and regional security, potentially destabilizing Bangladesh and affecting India’s security environment.

What Should be India’s approach to deal with the Bangladesh Crisis?

1. Diplomatic Engagement: Maintain open channels with the interim government through regular high-level visits and dialogue. Avoid provocative statements and carefully manage perceptions to sustain mutual trust.
2. Raising the Attacks on Minorities: India must raise concerns over attacks on Hindu minorities both bilaterally and multilaterally, including through the United Nations mechanisms.
3. Support to Popular Expression: As a vibrant multi-party democracy, India should support the expression of popular will in a sensitive neighboring country. For example, India supported the people’s movement in Nepal in 2006 that ended dictatorial monarchical rule and restored multi-party democracy.
4. Expression of Readiness to Expand Bilateral Ties: India should signal its readiness to enhance economic engagement with a successor government while avoiding branding the ongoing political change as anti-India or anti-Hindu.
5. Cautiousness and Discreteness: India should act cautiously and discreetly, keeping the door open for continued close and mutually beneficial ties, as seen in its engagement with the Maldives under Mohamed Muizzu.
6. Establishment of Joint Task Forces and Smart Border Management: Joint task forces comprising law enforcement agencies from both countries should be established to effectively combat cross-border drug smuggling, human trafficking, and illegal immigration.
7. Establishment of a Digital Connectivity Corridor: A digital connectivity corridor should be developed focusing on high-speed internet, digital services, and e-commerce to create new avenues for trade, collaboration, and technological exchange.
8. Early Conclusion of India-Bangladesh Free Trade Agreement (FTA): Bangladesh is set to lose its Least Developed Country (LDC) status after 2026, which will end its duty-free and quota-free access to India. India should finalise the FTA at the earliest and ensure it is not misused by China to dump goods into India through the Regional Comprehensive Economic Partnership (RCEP), of which Bangladesh is also a member.