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As Bangladesh prepares to graduate from the UN’s Least Developed Country (LDC) category in 2026, it faces economic challenges, prompting a strategic pivot toward China. This shift has strained India-Bangladesh trade ties, exacerbating tensions.

Strategic Challenges Posed to India by China’s Expanding Presence in Bangladesh

• Political Realignment: The fall of Sheikh Hasina’s pro-India government and the rise of Muhammad Yunus’s administration signal a shift in Bangladesh’s foreign policy towards Beijing.
  Example: China’s $2.1 billion investment agreements during Yunus’s visit in 2025 demonstrate its economic clout in Bangladesh.
• Duty-Free Access: China provides 97% of Bangladeshi goods duty-free access to its domestic market, enhancing Bangladesh’s export competitiveness.
  Example: China-backed infrastructure projects, including the Teesta River development, help Bangladesh diversify its economy and lessen dependence on India
• Defense Ties: Over 70% of Bangladesh’s arms imports are from China, solidifying military dependency.
• Strategic Geography: Bangladesh’s proximity to India’s sensitive Northeast makes China’s presence a security concern.
  Example: Infrastructure development with Chinese help near the Siliguri Corridor (Chicken’s Neck) could threaten India’s strategic autonomy.
• Uneven Playing Field: Duty-free fabric imports from China give Bangladeshi garment manufacturers a price advantage over Indian firms.

Comprehensive Approach India Could Adopt to Safeguard its Regional Interests

• Enhancing Bilateral Trade: Negotiate favorable trade agreements with Bangladesh to counterbalance China’s economic influence.
  Example: Extend duty-free access for key Bangladeshi exports while securing similar benefits for Indian goods.
• Strengthening Ties: Accelerate projects like the Bangladesh-Bhutan-India-Nepal (BBIN) corridor to foster regional integration.
  Example: Develop joint infrastructure initiatives such as cross-border rail links and port facilities.
• Capacity Building: Offer military training, joint exercises, and defense equipment to reduce Bangladesh’s reliance on China.
  Example: India can build on its recent supply of coastal surveillance radar systems to Bangladesh.
• Cultural and Educational Ties: Increase scholarships, cultural exchanges, and cooperative ventures to strengthen people-to-people connections.
  Example: Initiate collaborative projects like the Maitree Thermal Power Plant and extend grants for Bangladeshi students in Indian institutions.
• Broader Partnerships: Work with allies like the US, Japan, and Australia to counterbalance China’s Belt and Road Initiative (BRI).
  Example: Promote Quad-backed projects and Build back better that focus on infrastructure development in South Asia.
  

By pursuing a multi-pronged strategy encompassing diplomacy, trade, infrastructure, and cultural ties, India can effectively safeguard its regional interests while addressing the challenges posed by China’s growing influence in Bangladesh.

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