India Bangladesh Bilateral Dynamics

• 22 May 2025

This editorial is based on “Trade diplomacy: on India-Bangladesh trade-related tensions” which was published in The Hindu on 21/05/2025. The article highlights that India’s recent trade restrictions on Bangladeshi garments signal deteriorating political ties amid Bangladesh’s shifting alliances, urging India to balance strategic concerns with diplomatic engagement ahead of uncertain elections.

For Prelims: SAARC, BIMSTEC, BBIN, Indian Ocean Rim Association (IORA), Akhaura-Agartala rail link, Teesta River, Citizenship Amendment Act, National Register of Citizens, Joint Rivers Commission, World Bank. 

For Mains: Significance of India Bangladesh Bilateral Relations for India’s Neighbourhood First and Act East Strategies. 

India and Bangladesh share a multifaceted relationship marked by deep historical ties, extensive economic cooperation, and strategic connectivity. However, recent political upheavals in Bangladesh and shifting regional alignments have introduced challenges, spilling over into trade and security domains. As India navigates complex diplomatic waters, balancing economic interests with geopolitical concerns, maintaining stable bilateral ties becomes crucial. India’s approach now requires careful diplomacy, proactive engagement, and a focus on long-term regional stability to safeguard mutual interests.  

What is the Significance of India-Bangladesh Relations? 

• Shared Historical and Cultural Foundations: India and Bangladesh share profound bonds grounded in common history, language, and cultural heritage. 
  • These commonalities enhance mutual trust and foster vibrant people-to-people connections across borders. 
• Robust Bilateral Trade Relations: Bangladesh is India’s largest trade partner within South Asia, highlighting close economic ties. 
  • The bilateral trade volume reached approximately USD 14.01 billion during the fiscal year 2023-24. 
• Extensive Security and Border Cooperation: Both countries maintain active cooperation on policing, anti-corruption, human trafficking, and drug trafficking issues. 
  • The peaceful management of the 4,096 km shared border involves joint inspections and fencing initiatives. 
• Successful Boundary Dispute Resolutions: The 2015 Land Boundary Agreement and maritime delimitation stand as landmark peaceful settlements. 
  • Such agreements contribute significantly to maintaining stability and goodwill in bilateral relations. 
• Strategic Maritime and Blue Economy Partnerships: The India-Bangladesh Green Partnership and MoUs on maritime cooperation underscore sustainable development efforts. 
  • Collaboration extends to blue economy and oceanography, enhancing regional security and environmental stewardship. 
• Engagement on Multilateral Platforms: Both nations actively participate in SAARC, BIMSTEC, BBIN, and Indian Ocean Rim Association (IORA) regional groupings. 
  • These forums facilitate dialogue on shared challenges and regional economic integration. 
• Enhanced Connectivity and Transit Protocols: Agreements like the Protocol on Inland Waterways Trade and Transit (PIWTT) support smooth cargo movement. 
  • India’s access to Chittagong and Mongla Ports lowers logistics costs for Northeast India. 
• Significance for India’s Regional Policies: Bangladesh’s geographical location is central to India’s Neighbourhood First and Act East strategies. 
  • Connectivity projects, such as the Akhaura-Agartala rail link, improve access to India’s Northeast region. 
• Key Developmental Assistance to Bangladesh: India has provided around USD 8 billion in Lines of Credit for infrastructure and capacity building. 
  • This financial support boosts Bangladesh’s development in transport, energy, and institutional strengthening. 
• Cultural Cooperation and Youth Engagement: Cultural centers in Dhaka promote Indian classical arts, languages, and cultural festivals. 
  • Youth delegation programs and scholarships nurture long-term social and educational linkages. 
• Energy and Commercial Cooperation: India supplies over 1,160 MW of electricity to Bangladesh, aiding its power sector expansion. 
  • The Friendship Pipeline transports High-Speed Diesel, strengthening bilateral energy ties. 
• Digital and Space Technology Collaboration: A key MoU enables cross-border UPI payments between National Payments Corporation of India (NPCI) and Bangladesh Bank. 
  • Joint satellite development and launches deepen technological cooperation and innovation. 

 

What are the Challenges Associated with India-Bangladesh Relations? 

• Unresolved River Water Sharing Disputes: Lack of a permanent, mutually agreeable mechanism complicates interstate water sharing issues. 
  • The contentious Teesta River dispute remains a significant sticking point in bilateral hydro diplomacy. 
• Rising Influence of China in Bangladesh: China is Bangladesh’s largest arms supplier and strategic partner, expanding its regional presence. 
  • Recent military exercises, such as Golden Friendship 2024, highlight deepening China-Bangladesh defense cooperation. 
• Cross-Border Security Concerns: Illegal migration, including Rohingya influx, strains India’s Northeast security and social stability. 
  • These movements complicate border management and generate humanitarian and political challenges. 
• Increasing Radicalization and Minority Persecution: Growing religious extremism and ill-treatment of minorities in Bangladesh threaten internal and regional security. 
  • Such conditions risk destabilizing Bangladesh and adversely impacting India’s security environment. 
• Impact of Indian Domestic Policies: Citizenship Amendment Act and National Register of Citizens fuel diplomatic sensitivities with Bangladesh. 
  • These policies have been used to amplify anti-India rhetoric within Bangladesh. 
• Trade and Transit Restrictions: Bangladesh’s port restrictions and high transit fees limit Northeast India’s market access. 
  • India’s reciprocal curbs on Bangladeshi garment imports intensify commercial tensions between the two nations. 
• Political Uncertainty in Bangladesh: The interim government’s ambiguous legitimacy causes delays in bilateral cooperation and project execution. 
  • Political instability hinders the implementation of development initiatives and regional connectivity projects. 
• People-to-People Connectivity Disruptions: Suspensions of public transport and visa complications reduce cross-border cultural and social exchanges. 
  • Medical tourism and educational contacts have declined, weakening grassroots bilateral relations. 
• Hydrological and Environmental Challenges: Absence of coordinated water resource management increases vulnerability to floods and droughts. 
  • These ecological concerns demand urgent cooperative mechanisms for sustainable transboundary river use. 

How can India-Bangladesh Relations be Strengthened? 

• Initiate CEPA Negotiations: Early commencement of Comprehensive Economic Partnership Agreement (CEPA) talks will institutionalize trade facilitation and strengthen economic ties. 
  • A CEPA can address tariff and non-tariff barriers, fostering greater bilateral commerce. 
• Operationalize Special Economic Zones (SEZs): Prompt development and activation of Bangladesh’s SEZs will attract Indian investments and spur growth. 
  • SEZs will enhance industrial cooperation and regional economic integration. 
• Conclude Water Sharing Treaties: Finalizing the Teesta Water Sharing Treaty is critical for resolving long standing hydro-political disputes. 
  • The Joint Rivers Commission should establish interim frameworks ensuring equitable water distribution. 
• Expand Power and Energy Collaboration: Broaden joint power projects and electricity trade to meet Bangladesh’s growing energy demands. 
  • Institutional mechanisms like the Joint Working Group must expedite grid interconnections and supply. 
• Accelerate Connectivity Initiatives: Fast-track railway, road, and inland waterway projects to boost trade and people-to-people contact. 
  • World Bank estimates show a 172% potential increase in India’s exports with improved connectivity. 
• Enhance Regional and Sub-Regional Cooperation: Position Bangladesh as a regional anchor within BIMSTEC, SAARC, and IORA frameworks. 
  • This will promote shared interests and strengthen South-South cooperation. 
• Revise Development Partnership Framework: Establish a new agreement expanding scope, reach, and impact of India’s development assistance. 
  • Continuous engagement will ensure sustainable and mutually beneficial projects. 
• Digitize Cross-Border Immigration and Border Management: Implement digital tools for transparent and efficient immigration processes at the grassroots level. 
  • This will improve security, ease legitimate movement, and reduce irregular migration. 
• Promote Cultural and Youth Exchanges: Expand cultural centers, scholarship programs, and youth delegations to deepen interpersonal ties. 
  • People-centric initiatives strengthen goodwill beyond governmental diplomacy. 
• Address Minority Rights and Social Stability: Collaborate proactively on minority protection to ensure internal peace and bilateral trust. 
  • Respect for human rights is essential for enduring and stable bilateral relations. 

Conclusion 

Sustaining India-Bangladesh relations requires balanced diplomacy, proactive engagement, and enhanced cooperation across trade, security, and connectivity. Addressing political uncertainties and external influences while deepening people-to-people ties will ensure mutual growth and regional stability. Strategic collaboration remains essential for advancing shared interests in South Asia’s evolving landscape. 

Drishti Mains Question:

India-Bangladesh bilateral relations are crucial for regional stability, connectivity, and economic growth. Comment.

UPSC Civil Services Examination Previous Year Question (PYQ) 

Prelims:

Q. Consider the following statements: (2020)

1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.
2. “Textile and textile articles” constitute an important item of trade between India and Bangladesh. 
3. In the last five years, Nepal has been the largest trading partner of India in South Asia.

Which of the statements given above is/are correct? 

(a) 1 and 2 only  

(b) 2 only 

(c) 3 only  

(d) 1, 2 and 3 

Ans: (b) 

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Mains: 

Q. Project ‘Mausam’ is considered a unique foreign policy initiative of Indian government to improve relationship with its neighbours. Does the project have a strategic dimension? Discuss.(2015)