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India’s Act East and Neighbourhood First policies face hurdles as Bangladesh’s political shifts and Myanmar’s instability stall fundamental connectivity projects.
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India’s Northeast has risen to the forefront of its foreign policy aspirations in the past decade. Composed of eight states[1] and bordering five neighbouring countries,[2] the Northeast’s geostrategic position was realised with the renewed thrust to its Neighbourhood First policy and the launch of the Act East Policy in 2014 that aimed to strengthen India’s ties with its neighbourhood in the east. The region is a land bridge between the rest of India and Southeast Asia, is the hinterland for Bangladesh, and is a transit territory for Nepal and Bhutan to access the Bay of Bengal.
The resurgence of disturbances within the Northeast, Bangladesh, and Myanmar have stalled several bilateral connectivity projects.
For years, this geography had remained out of the strategic spotlight, riddled with political turmoil and ethnic violence. However, peace accords signed between various rebel groups and the Government of India over the past few years ushered in stability, enabling the geopolitical potential of this region to be harnessed through developmental initiatives. These are mostly devoted to building connectivity infrastructure as functional networks form the bedrock of improved transport and are fundamental to developing other sectors of bilateral cooperation, such as trade and energy. Unfortunately, the resurgence of disturbances within the Northeast, Bangladesh, and Myanmar have stalled several bilateral connectivity projects. In this volatile environment, it is crucial to revisit the viability of these initiatives.
Bangladesh borders four Northeastern states of India,[3] offering the landlocked region better land connectivity with the rest of India and maritime access to the Bay of Bengal for improved overseas trade opportunities. Multiple connectivity projects have been undertaken in the past 15 years of partnership between the Government of India and the Awami League administration in Bangladesh, often referred to as the “Golden Chapter” in bilateral ties. India has emerged as Bangladesh’s foremost development partner, with a development portfolio of US$8 billion. However, the regime change in Bangladesh in August 2024, former Prime Minister Sheikh Hasina’s flight to India, and the establishment of the interim government under Chief Advisor Muhammad Yunus have dramatically altered bilateral ties. As relations remain strained, with the anti-India rhetoric and Hasina’s extradition dilemma heightening tensions, connectivity projects remain in limbo.
The regime change in Bangladesh in August 2024, former Prime Minister Sheikh Hasina’s flight to India, and the establishment of the interim government under Chief Advisor Muhammad Yunus have dramatically altered bilateral ties.
Former PM Hasina had endowed India with increased use of Bangladesh’s Chattogram and Mongla ports to provide the Northeast with a maritime outlet. Accordingly, India secured the operating rights to a terminal in Mongla port in June 2024. It also funded the construction of the Khulna-Mongla Port rail link, connecting the port to the rail network in Khulna. This project aims to reduce logistical hurdles and cargo transportation costs between West Bengal and the Northeast. However, services are yet to begin on this route. Work on the Ashuganj Inland Container Port in Bangladesh, developed with India’s help, has also been suspended. Its completion would have facilitated the utility of the recently inaugurated Akhaura-Agartala rail link, enhancing Tripura’s trade with Bangladesh.
As such, commerce between India’s Northeast and Bangladesh has reportedly declined since the regime change, with border closures, issues with customs clearances, and increased security surveillance hindering the smooth flow of goods between the two countries. India’s exports to Bangladesh fell by 13.3 percent between April and October 2023, with imports dipping by 2.3 percent. Fly ash exports via the Indo-Bangladesh protocol route through Kolkata port also dipped by 15-25 percent during the peak construction season. The once bustling Benapole-Petrapole land ports at the India-Bangladesh border, which cater to nearly 30 percent of bilateral trade, now witness significantly less traffic. The reduced activity has severely impacted border-dependent livelihoods. People-to-people connectivity has also been impaired with the three railway services—Maitree Express (Kolkata-Dhaka), Bandhan Express (Kolkata-Khulna), and Mitali Express (Siliguri-Dhaka)—being suspended since July 2024. Bus services and other public transport remain unavailable, and private vehicles have been charging exorbitant rates to cross the land border.
The once bustling Benapole-Petrapole land ports at the India-Bangladesh border, which cater to nearly 30 percent of bilateral trade, now witness significantly less traffic.
Naturally, propositions in the last Joint Statement[4] issued before the regime change also remain suspended. These include the early operationalisation of the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicle Agreement to promote sub-regional connectivity and the implementation of goods-train services from Gede (India) to Darshana (Bangladesh) through Chilahati (Bangladesh) and Haldibari (India) up to Hasimara (Indian border town near Bhutan) via the Dalgaon (Assam, India) railhead at the India-Bhutan border. Physical connectivity aside, plans for cooperation in digital connectivity through digitising cross-border BBIN-MVA licences for bilateral trade and 4G/5G rollout by Indian companies Bharti Airtel and Jio Infocomm are also stalled.
Harnessing the strategic potential of India’s Northeast is intertwined with Dhaka’s cooperation. Bangladesh’s challenges, however, complicate its prospects. The rebel Arakan Army’s (AA) capture of Rakhine State at the Bangladesh-Myanmar border adds to this complexity.
The AA has reportedly seized control of 15 out of 18 townships in Rakhine State and secured key border points with Bangladesh and Paletwa in Chin State—areas vital to the Kaladan Multi-Modal Transit Transport Project (KMMTTP). India’s connectivity projects with Myanmar, which shares borders with the Indian states of Manipur, Mizoram, Nagaland, and Arunachal Pradesh, are integral to broader regional and sub-regional initiatives like the Act East Policy and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
The operational stability of Sittwe Port, a critical component of the KMMTTP project operationalised in 2023 and secured by India in 2024, faces challenges as instability persists. The AA’s rejection of a Chinese-proposed ceasefire indicates a protracted conflict, threatening supply chains and logistics. Indian Ambassador to Myanmar Abhay Thakur’s visit to Sittwe Port in January 2025 reflects India’s commitment to monitoring and addressing these challenges.
India’s connectivity projects with Myanmar, which shares borders with the Indian states of Manipur, Mizoram, Nagaland, and Arunachal Pradesh, are integral to broader regional and sub-regional initiatives like the Act East Policy and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
The 109-kilometre long Paletwa-Zorinpui highway, a vital road link for the KMMTTP, remains incomplete due to legal and logistical issues, which are compounded by security threats. Despite initial resistance, the AA now seems to be supporting the project to protect local interests. Still, junta airstrikes and ongoing conflicts continue to disrupt progress. After terminating previous contracts, India’s Indian Railways Construction International (IRCON) partnered with local firms to resume work, but instability persists, delaying completion.
On the Indian side, unresolved land disputes and inadequate infrastructure in Mizoram exacerbate delays. Key highways connecting Zorinpui to Lawngtlai and Aizawl require upgrades to handle increased trade volumes. These combined challenges demand immediate attention to ensure that the Kaladan corridor achieves operational efficiency soon.
The IMT-TH, aimed at linking India’s Northeast with Thailand via Myanmar, is equally significant for regional connectivity, trade, and socio-economic integration. Proposals to extend the highway to Cambodia, Laos, Vietnam, and potentially Bangladesh underscore its strategic importance. In 2024, India’s External Affairs Minister S. Jaishankar emphasised the project’s alignment with the India-Middle East-Europe Economic Corridor (IMEC), highlighting its potential to connect the Pacific and Atlantic while strengthening land-based connectivity in the Indian Ocean.
Despite being 70 percent complete, the highway faces delays due to the instability in Myanmar, ethnic tensions in Manipur, and infrastructure challenges such as the replacement of 69 bridges on the Tamu-Kyigone-Kalewa road and slow progress on the Yar Gyi section, with only 25 percent of the work completed thus far. To mitigate risks and safeguard projects, the Indian government maintains engagement with the junta and more recently with the EAOs and the National Unity Government (NUG).
The successful realisation of both corridors depends not only on Myanmar’s ability to stabilise its internal situation but also on India’s capacity to navigate complex geopolitical realities while ensuring the project’s sustainability and security.
The escalating conflict in Myanmar underscores the broader securitisation challenges associated with connectivity projects in conflict-prone regions. The successful realisation of both corridors depends not only on Myanmar’s ability to stabilise its internal situation but also on India’s capacity to navigate complex geopolitical realities while ensuring the project’s sustainability and security.
India’s Northeast remains crucial to its Neighbourhood First and Act East policies. However, ongoing instability in Bangladesh and Myanmar continue to disrupt India’s connectivity projects, including the IMT-TH and the Kaladan project. Security concerns stem from an increasing influx of displaced people, insurgent activities, and cross-border smuggling. Trade through key land ports, such as Petrapole (West Bengal) and Dawki (Meghalaya), faces disruptions, while investment in infrastructure remains uncertain. Instability in Myanmar has not only restricted trade through Moreh (Manipur) and Zokhawthar (Mizoram) but also delayed crucial border road and rail projects, weakening regional integration.
To address these challenges, India must strengthen border management, enhance diplomatic efforts, and develop resilient infrastructure. Ensuring the stability and security of these connectivity initiatives is crucial for sustaining economic growth in the Northeast and advancing India’s Neighbourhood First and Act East policy objectives.
Sohini Bose is Associate Fellow at the Observer Research Foundation.
Sreeparna Banerjee is Associate Fellow at the Observer Research Foundation
Anasua Basu Ray Chaudhury is Senior Fellow with the Neighbourhood Initiative at the Observer Research Foundation.
[1] India’s eight Northeastern states are Assam, Meghalaya, Manipur, Mizoram, Tripura, Arunachal Pradesh, Nagaland, and Sikkim.
[2] India’s Northeast borders five neighbouring countries: Bangladesh, Myanmar, Nepal, Bhutan, and China.
[3] Bangladesh borders the Northeastern states of Assam, Tripura, Mizoram, and Manipur.
[4] The last Joint Statement between the Government of India and the Government of Bangladesh led by former PM Sheikh Hasina was issued on 22 June 2024.
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Sohini Bose is an Associate Fellow at Observer Research Foundation (ORF), Kolkata with the Strategic Studies Programme. Her area of research is India’s eastern maritime ...
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Sreeparna Banerjee is an Associate Fellow in the Strategic Studies Programme. Her work focuses on the geopolitical and strategic affairs concerning two Southeast Asian countries, namely ...
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Anasua Basu Ray Chaudhury is Senior Fellow with ORF’s Neighbourhood Initiative. She is the Editor, ORF Bangla. She specialises in regional and sub-regional cooperation in ...
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