As Pakistan and Bangladesh get close, India should be watchful
Afaq Hussain
Director, BRIEF
While India was committed to its eastern neighbourhood through the Act East Policy and the Neighbourhood First Policy, the latest developments should alert India to be cautious.
Since Sheikh Hasina’s overthrow in August last year and the visit of Pakistan’s Foreign Secretary Amna Baloch to Bangladesh this week, there has been a renewed friendship between the two nations. For decades, their relations were strained, particularly during Hasina’s tenure. But in the last few months, they have warmed up to each other through multiple economic and diplomatic initiatives including direct shipping routes, enhanced trade, a relaxed visa regime, and a proposed visit of Pakistan’s Foreign Minister to Bangladesh at the end of April.
Under Sheikh Hasina and Narendra Modi, ties were built on pillars like trade, connectivity-linked infrastructure, people-to-people initiatives, culture, etc. But the recent revocation of a transhipment facility by India for exports from Bangladesh to third countries, and the existing ban on the import of selected Indian products by Bangladesh, has adversely impacted this relationship.
Trade ties had witnessed a significant surge in the last decade and a half, reaching around $12 billion in 2024, as India became the second-largest exporting country to Bangladesh. These strong numbers were supplemented by multiple initiatives apart from the natural advantage offered by geographical proximity. Initiatives on the infrastructure and connectivity front in the form of Integrated Check Posts (ICPs) at multiple border points, transit rights, trade corridors, and maritime cooperation treaties like access to India for the Chattogram and Mongla ports were instrumental in boosting ties.
While India was committed to its eastern neighbourhood through the Act East Policy and the Neighbourhood First Policy, the latest developments should alert India to be cautious. Bangladesh is India’s largest trading partner in South Asia. Given India’s historical and present ties with Pakistan and the creeping influence of China, cooperation with Bangladesh was a critical fillip to the former’s dominance in South Asia.
Bangladesh and Pakistan’s renewed friendship, along with the China factor, does present strategic and security challenges for India.
Unfortunately, India will now have to maintain a strict vigil at another border — the one shared with Bangladesh. The situation along the border of civil war-torn Myanmar, which is in the vicinity of the India-Bangladesh border, brings further complications.
Bangladesh is scheduled to graduate out of the Least Developed Country status in 2026, which would mean more tariffs on exports, fewer incentives for its exporters, and stricter standards and compliances in international markets. All of this would eventually lead to higher costs, and perhaps direct competition with India’s exports, particularly in the ready-made garments segment.
While Pakistan-Bangladesh trade is yet to show any significant progress, bilateral trade between India and Bangladesh has come to pre-August 2024 levels. Amidst global economic turmoil, it is important for both India and Bangladesh to not give up on the bilateral and regional connectivity initiatives. One of the key success stories of India-Bangladesh cooperation was the operationalisation of “Border Haats”, which had a significant impact on border economies through enhanced trust, people-to-people connect, local livelihood generation, and women’s empowerment.
India should be watchful of the overall developments with respect to Pakistan-Bangladesh as well as the influence of China; but at the same time, should not give up its role as a leading country in South Asia and let other countries drive the political and economic narrative in the region.