The fall of Sheikh Hasina’s government in Bangladesh on August 5, 2024, marks a watershed moment with far-reaching implications for regional stability and India-Bangladesh relations. This development highlights critical areas such as bilateral trade, connectivity, and security partnerships while underscoring challenges like water-sharing disputes and border issues.

Understanding these dynamics is essential for analyzing India’s foreign policy and regional geopolitics.

Unprecedented Political Shift In Bangladesh

A wave of massive anti-government protests in Bangladesh led to the dramatic fall of Sheikh Hasina’s administration. On August 5, 2024, Sheikh Hasina fled to India, creating space for an interim government headed by Chief Adviser Mohammad Yunus. Yunus, along with his team of advisers, officially took office on August 8.

Bangladesh-India Relations Under Sheikh Hasina

• Dependable Partner: Since Sheikh Hasina began her leadership in 2009, Bangladesh has become a reliable partner for India.
• Counterterrorism Efforts: Her administration dismantled anti-India terrorist networks that once operated from Bangladesh.
• Strengthened Ties: Her government enhanced economic, cultural, and social ties with India, fostering a period of cooperation and mutual growth between the two countries.

The Impact Of Political Upheaval

• Turning Point: The unexpected removal of the Awami League government, driven by student-led protests with broad support, marks a significant turning point in Bangladesh’s history.
• Impact on India-Bangladesh Relations: Hasina’s sudden exit poses risks to the progress in India-Bangladesh relations, including key initiatives like expanded trade, easier movement of goods and people, and a potential free trade agreement (FTA).
• Political Instability: Bangladesh’s political transitions often lead to instability, with inconsistent governance and challenges in maintaining constitutional order.
• Uncertain Future: The direction the interim government will take is unclear, raising concerns about the country’s political and economic future.

Strengths And Challenges In Bilateral Relations

• Decades of Cooperation: India and Bangladesh share a strong foundation of collaboration since Bangladesh’s independence.
• Key Resolutions: Both nations have resolved major issues, including the land boundary agreement, the exchange of enclaves, and the enhancement of trade and transportation links.
• Regional Connectivity: Bangladesh has permitted limited Indian freight access to improve regional connectivity.
• Unresolved Issues: The Teesta water-sharing agreement remains a complex and unresolved matter in their relationship.
• Mutual Progress: Despite occasional challenges, the partnership has been one of progress and mutual benefit, with both nations working to strengthen their ties.

India-Bangladesh Trade Relations: A Growing Partnership

Bangladesh is India’s largest trading partner in South Asia, while India is Bangladesh’s second-largest partner in Asia, after China.

According to the Union Ministry of Commerce, their bilateral trade reached $13 billion in the financial year 2023-24, highlighting the economic significance of their relationship.

Key Trade Goods And Market Trends

• Key Market for Cotton: Bangladesh is a crucial market for India’s cotton exports, accounting for 34.9% of India’s total cotton exports, valued at $2.4 billion in FY24.
• Other Major Exports: India also exports petroleum products and cereals to Bangladesh.
• Largest Import: India’s largest import from Bangladesh is readymade garments, worth $391 million in FY24.
• Global Textile Leader: Bangladesh has established itself as a global leader in the textile industry, contributing significantly to its export economy.

The Potential Of A Free Trade Agreement (FTA)

• FTA Discussions: In October 2023, India and Bangladesh initiated discussions on a potential Free Trade Agreement (FTA) during a Joint Working Group meeting on Trade in Dhaka.
• Goals of the FTA: The FTA aims to reduce or eliminate customs duties on traded goods and simplify trade norms, encouraging investments and expanding trade opportunities.
• Projected Benefits: A 2012 World Bank working paper projected that a full FTA could increase Bangladesh’s exports to India by 182%, while a partial FTA could boost them by 134%.
• Enhanced Connectivity: Improved transport infrastructure and connectivity could further increase Bangladesh’s exports by 297% and India’s exports by 172%.
• Market Access: The agreement would provide Bangladesh with greater market access and offer Indian consumers a wider range of manufactured goods.

Growing Focus On Infrastructure And Connectivity

Infrastructure and connectivity have become integral components of India-Bangladesh relations, as highlighted by the Indian Minister of External Affairs. Over the years, significant investments and collaborative projects have strengthened ties and improved regional integration.

Lines of Credit For Development

Since 2016, India has extended three lines of credit to Bangladesh, totaling $8 billion. These funds have supported the development of critical infrastructure, including roads, railways, ports, and shipping facilities. This financial assistance has played a vital role in enhancing connectivity between the two nations.

Key Joint Infrastructure Projects

In November 2023, two major joint projects were inaugurated:

• The Akhaura-Agartala Cross-Border Rail Link: This sixth cross-border rail line provides an alternate route connecting mainland India to the Northeast. It has significantly reduced train travel time between Agartala and Kolkata, from 31 hours to just 10 hours. The project is expected to boost tourism, trade, and cultural exchanges.
• The Khulna-Mongla Port Rail Line: This line enhances connectivity within Bangladesh and facilitates trade by linking the Khulna region to the Mongla Port, one of the country’s key maritime hubs.

Expanding Bus And Port Connectivity

In addition to rail, five cross-border bus routes currently connect cities like Kolkata, Agartala, and Guwahati in India with Dhaka in Bangladesh. These routes enhance people-to-people exchanges and support regional integration.

In 2023, India and Bangladesh also moved forward with an agreement to operationalize the use of Chittagong and Mongla ports. This initiative aims to streamline the movement of cargo between mainland India and its Northeastern states, easing trade and reducing logistical challenges.

Why Connectivity Matters For India And Bangladesh

Connectivity is a cornerstone of the India-Bangladesh relationship, driven by their shared geography and mutual economic interests.

The two nations share the fifth-longest border in the world, spanning 4,096 kilometers, with Bangladesh surrounded by Indian territory on three sides.

This geographic proximity necessitates strong connectivity initiatives for mutual growth and regional integration.

Strategic Importance For Both Nations

• Crucial Connectivity for Bangladesh: Robust connectivity with India is vital for Bangladesh due to its landlocked position relative to Indian territory, ensuring access to regional markets and boosting economic growth.
• Strategic Importance for India: For India, connectivity with Bangladesh provides access to the Bay of Bengal for its Northeastern states, enhancing maritime trade opportunities.
• Alignment with Policies: Improved connectivity aligns with India’s Neighbourhood First and Act East policies, as Bangladesh serves as a gateway to Southeast Asia.

Economic And Trade Benefits

• Robust Trade Relationship: India and Bangladesh share a strong trade relationship across sectors like energy, textiles, and consumer goods.
• Enhanced Connectivity: Strengthened connectivity through railways, bus routes, waterways, and sea ports supports smoother trade flows, benefiting both economies.
• Energy and Digital Connectivity: The two nations also focus on energy and digital connectivity, extending the concept beyond physical infrastructure.
• Joint Projects: Joint initiatives in connectivity were outlined during Sheikh Hasina’s June 2024 visit to India.
• Concerns Over Political Uncertainty: Political uncertainty in Bangladesh raises concerns about the continuity of these initiatives.

Regional And Sub-Regional Integration

• Shared Vision for Regional Integration: Both nations envision using their bilateral partnership as a foundation for regional integration in the Global South.
• Collaborative Initiatives: Initiatives such as BIMSTEC, SAARC, and IORA aim to foster collaboration across South Asia and beyond.
• BBIN Motor Vehicle Agreement: India and Bangladesh prioritize the operationalization of the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicle Agreement to enhance sub-regional connectivity.
• Seamless Transport and Trade: The BBIN agreement is designed to promote seamless road transport and trade within the region.

Focus On Rail Connectivity

• Focus on Rail Connectivity: Rail connectivity has been a key aspect of bilateral cooperation between India and Bangladesh.
• Goods-Train Services MoU: An MoU was signed to enable goods-train services from Gede (India) to Darshana (Bangladesh) and further to Bhutan via Hasimara and Assam.
• Boosting Regional Trade: The project aims to facilitate trade between Bangladesh, Bhutan, and eventually Nepal, enhancing regional commerce.
• Tourism Opportunities: Passenger services along this route could create tourism opportunities, allowing Bangladeshi tourists to explore Northeast India and the Himalayan region.
• Awaiting Implementation: Despite its potential, the plan remains on paper, with implementation timelines yet to be finalized.

Security Cooperation Between India And Bangladesh

India and Bangladesh share a 4,096.7 km-long international border, which is managed through various bilateral mechanisms.

Regular discussions between their border guarding forces and nodal drug control agencies address common challenges such as terrorism, extremism, and transnational crimes.

Strengthening Military Cooperation

A newly signed Memorandum of Understanding (MoU) between India’s Defence Services Staff College (DSSC) and Bangladesh’s Defence Services Command and Staff College (DSCSC) aims to enhance collaboration in military education. This partnership is expected to deepen the security relationship between the two nations.

Intelligence Sharing and Counterterrorism

Ongoing cooperation in intelligence sharing and joint counterterrorism efforts plays a crucial role in ensuring regional stability. These initiatives help both countries address shared security threats and maintain peace in the region.

Defence Financing and Strategic Partnerships

India has also extended a $500 million line of credit to Bangladesh for defence purchases. This financial support not only boosts Bangladesh’s defence capabilities but also strengthens the strategic partnership between the two countries, fostering deeper ties in security and defence.

Problem Areas In India-Bangladesh Relations

Teesta Water Sharing

• Contentious Issue: The Teesta River remains a point of contention between India and Bangladesh, especially during the dry season from December to May.
• Current Water Sharing: India controls 55% of the river’s water, while Bangladesh demands an equitable 50% share.
• Irrigation Impact: Diversion dams built by both nations irrigate 9,20,000 hectares in West Bengal, India, and 7,50,000 hectares in Bangladesh.
• Importance of Resolution: Resolving the dispute is vital for agriculture, livelihoods, and environmental sustainability in both countries.
• Domestic Politics in India: The West Bengal government opposes the proposed water-sharing agreement, citing potential harm to its agricultural sector during the dry season.
• Balancing Needs: Balancing West Bengal’s water requirements with Bangladesh’s demands, while addressing environmental concerns, is a complex challenge.
• Regional Precedent: The resolution of this issue will set an important precedent for managing shared water resources in South Asia.

Border Issues

• Border Tensions: Civilian deaths along the India-Bangladesh border remain a sensitive and persistent issue in bilateral relations.
• Efforts to Address Challenges: Initiatives such as joint patrols, improved communication between border forces, and the use of non-lethal weapons aim to reduce tensions.
• Cross-Border Activities: Illegal cross-border activities continue to pose significant challenges despite these efforts.
• Border Management Discussions: Both nations have engaged in discussions on border demarcation, enclave exchanges, and coordinated management to address these issues.
• Impact on Trust: Recurring border fatalities undermine trust and cooperation, threatening bilateral relations and regional stability.
• Critical Concern: Balancing security measures with the need to safeguard civilian lives remains a crucial area for both countries.

Way Forward For India-Bangladesh Relations

• Geographic Proximity: India and Bangladesh share an unchangeable geographic closeness, making their bilateral relationship crucial for regional stability and prosperity.
• Dynamic Strategies: Both nations must adopt flexible strategies, balancing their “look east and west” policies to address evolving challenges and opportunities.
• Bangladesh’s Priority: Socio-economic development remains critical for Bangladesh, a densely populated nation facing severe climate change impacts.
• India’s Approach: India needs to recognize the limitations of its bargaining power with smaller neighbors and demonstrate generosity and adaptability in its regional partnerships.
• Geopolitical Context: In a region influenced by an assertive China, India’s strategic approach must focus on fostering trust and collaboration with its neighbors.

Engaging Beyond Traditional Diplomacy

• Beyond State Diplomacy: India’s engagement with Bangladesh must extend beyond conventional state-to-state diplomacy, focusing on connecting with the Bangladeshi people, civil society, NGOs, the press, and industry.
• Building Trust: Proactive initiatives help build trust and foster goodwill beyond governmental channels, strengthening the bilateral relationship.
• Role of Track 2 Diplomacy: Informal and non-governmental dialogues, such as Track 2 diplomacy, can play a pivotal role in enhancing mutual understanding.
• Engaging During Instability: In the context of Bangladesh’s political instability, informal platforms involving academicians, business leaders, and civil society actors can encourage cooperation.
• Complementing Official Policies: Insights and recommendations from these interactions can inform and complement official policymaking, promoting deeper collaboration.

Adapting To Political Realities

• Moving Beyond Political Alignments: India must avoid aligning exclusively with one political faction in Bangladesh to ensure balanced and sustainable relations.
• Recognizing Political Diversity: Acknowledging the diversity of political positions within Bangladesh is essential for fostering inclusive engagement.
• Collaborative Approach: Engaging with all stakeholders through a collaborative and creative strategy will strengthen the bilateral relationship.
• Resilience Amid Transitions: A balanced approach ensures that the relationship remains resilient during political transitions in Bangladesh.

A Collaborative Future

By embracing flexibility, fostering people-to-people connections, and acknowledging the need for inclusive engagement, India and Bangladesh can strengthen their ties.

Mutual understanding and a willingness to address shared challenges creatively will be key to ensuring a stable and prosperous partnership for years to come.

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