Maintaining current initiatives and exploring new collaborations in the midst of Bangladesh’s political transition is crucial for India-Bangladesh relations
Bangladesh is navigating an unprecedented political transition, which has shrouded its future development trajectory in uncertainty. Former Prime Minister Sheikh Hasina's uninterrupted 15-year tenure ushered in a period of stability in the country, attracting foreign investments in transport, energy, and digital infrastructure development. In this period, project aid emerged as a favoured modus operandi amongst Bangladesh's development partners, accounting for the largest proportion of overall foreign assistance. India emerged as Bangladesh’s foremost development partner under Sheikh Hasina’s premiership, with a development portfolio of US$ 8 billion, building bilateral and regional connectivity linkages essential to achieve Bangladesh’s economic growth potential. However, Hasina’s sudden departure from Bangladesh on August 5 brought the country to a halt. As the Mohammad Yunus-led interim government in Dhaka strives to return things to normalcy and rebuild its institutions, questions arise about the fate of the bilateral connectivity projects pending completion.
Former Prime Minister Sheikh Hasina's uninterrupted 15-year tenure ushered in a period of stability in the country, attracting foreign investments in transport, energy, and digital infrastructure development.
Given their geographic proximity and interlinkages, connectivity cooperation is a central tenet of the India-Bangladesh bilateral partnership. Sharing the world’s fifth-longest boundary (4,096 km), Bangladesh borders India’s Northeastern states and West Bengal. Connectivity cooperation between the bilateral partners is mutually beneficial. Surrounded by Indian territory on three sides, Bangladesh is often described as ‘India locked’, necessitating robust connectivity with India. For New Delhi, connectivity with Bangladesh is vital as its Northeastern territories will gain access to the Bay of Bengal, improving maritime trade opportunities. Furthermore, Bangladesh is a key focus of the country’s ‘Neighbourhood First’ and ‘Act East’ policies as its immediate eastern neighbour and land bridge to Southeast Asia.
Connectivity between India and Bangladesh is also mutually beneficial because of their robust trade ties. India is Bangladesh’s largest trading partner, with bilateral trade ranging from energy, food, and cloth fibres to electric appliances and plastics. Consequently, several connectivity channels have been established between the two countries including rail links, bus routes, inland waterways, and sea ports for trade and transport.
India is Bangladesh’s largest trading partner, with bilateral trade ranging from energy, food, and cloth fibres to electric appliances and plastics.
India and Bangladesh broadly define connectivity to go beyond physical connectivity to include energy and digital links. This was articulated in the joint statement issued by the two countries during Hasina’s last visit to India as Bangladesh’s PM in June 2024. The statement identified several joint projects undertaken in these three categories. In the current political scenario, when the fate of these projects remains uncertain, it is important to revisit these initiatives and understand their merit and present state.
Table 1: Status of India’s connectivity projects with Bangladesh
| Subsector | Project | Year of Completion | Status |
| Energy | SASEC 1000MW-HVDC Bangladesh India Electrical Grid Interconnection Project I | 2016 | Completed |
| Transport | Restoration of the Radhikapur-Birol rail link | 2017 | Completed |
| Energy | SASEC 500MW-HVDC Bangladesh India Electrical Grid Interconnection Project II | 2017 | Completed |
| Transport | Restoration of the Haldibari – Chilahati rail link | 2020 | Completed |
| Transport | Restoration of the Gede-Darshana rail link | 2021 | Completed |
| Transport | Restoration of the Petrapole-Benapole rail link | 2022 | Completed |
| Transport | Akhaura-Agartala rail link I | 2023 | Completed* |
| Transport | Khulna-Mongla Port Rail | 2023 | Completed |
| Energy | Maitree Thermal Power Plant I, II | 2023 | Completed* |
| Energy | India-Bangladesh Friendship Pipeline | 2023 | Completed |
| Energy | Rooppur Nuclear Plant I | 2024 | Under Construction |
| Energy | Katihar-Parbatipur-Bornagar 765 kV electricity transmission line | 2025 | Under Construction |
| Energy | Rooppur Nuclear Plant II | 2027 | Under Construction |
| Digital | ISRO-Bangladesh satellite launch | N/A | MoU signed |
| Digital | 4G/5G connectivity projects by Indian companies | N/A | MoU signed |
| Total number of sectors covered: 3 | Total projects: 16 |
Source: MEA Dashboard, Ministry of External Affairs, India, (*only parts/phases of these projects have been completed).
Physical connectivity: A shared vision of India and Bangladesh has been to utilise their wide-ranging bilateral cooperation as an anchor for regional and sub-regional integration in the Global South, through common platforms such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), South Asian Association for Regional Cooperation (SAARC), and Indian Ocean Rim Association (IORA). Towards this objective, the two countries had prioritised early operationalisation of the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicle Agreement to promote sub-regional connectivity. Enhancing road and highway connectivity is essential to complement the burgeoning India-Bangladesh trade which has doubled between 2014 and 2024.
In the railway sector, an MoU on Railway Connectivity was signed with a decision to begin goods-train services from Gede (India)-Darshana (Bangladesh) through Chilahati (Bangladesh)-Haldibari (India) up to Hasimara (Indian border town near Bhutan) via Dalgaon (in Assam, India) railhead at the India-Bhutan border. Transporting goods via the Gede-Darshana and Chilahati-Haldibari rail links to the Bhutan border would allow India to facilitate trade between Bhutan and Bangladesh and benefit from transit trade. Eventually, this facility could be extended to Nepal, to enhance regional trade. Commencement of passenger services along this route would facilitate tourism, enabling tourists in Bangladesh to explore the Himalayan kingdoms and Northeast India. However, this plan remains on paper without a deadline for completion.
Transporting goods via the Gede-Darshana and Chilahati-Haldibari rail links to the Bhutan border would allow India to facilitate trade between Bhutan and Bangladesh and benefit from transit trade.
Energy connectivity: Energy cooperation is another cornerstone of the India-Bangladesh relationship. Notable initiatives include the India-Bangladesh Friendship Pipeline, which reduces diesel supply costs and mitigates power cuts in Bangladesh, and jointly developing the Maitree Thermal Power Plant in Bangladesh, to enhance power supply (see Table 1). Furthermore, under the Indo-Russian agreement to collaborate on atomic energy projects in third countries, India is assisting in the construction of Bangladesh's first nuclear power station in Rooppur, paving the way for Bangladesh's entry into the ‘nuclear club’.
To expand cooperation and develop intra-regional electricity, both countries also aspired to expedite the construction of a 765 kV high-capacity interconnection between Katihar (India)-Parbatipur (Nepal)-Bornagar (Bangladesh) with Indian financial assistance, to anchor electricity grid connectivity. This was part of the tripartite power trade agreement between Nepal, Bangladesh, and India that was scheduled to be signed on 28th July this year, allowing Nepal to export power to Bangladesh via the Indian power grid. The agreement would have been the first of its kind in South Asia. No further information on this is available.
The India-Bangladesh digital partnership hinges on synergising India’s digital infrastructure development aid with the 2041 Smart Bangladesh plan.
Digital connectivity: In the last visit of former PM Hasina to India, Indian Prime Minister Narendra Modi signed multiple MoUs with her for an India-Bangladesh Digital Partnership, which will focus on “leveraging digital technologies to foster economic growth, cross-border digital interchange and regional prosperity.” The India-Bangladesh digital partnership hinges on synergising India’s digital infrastructure development aid with the 2041 Smart Bangladesh plan. It aims to develop information and communications infrastructure to attain four objectives—smart citizens, smart government, smart economy, and smart society. The initial partnerships included digitising cross-border BBIN-MVA licenses for bilateral trade and 4G/5G rollout by Indian companies Bharti Airtel and Jio Infocomm.
In the aftermath of the Bangladeshi coup, India closed the six major land ports between India and Bangladesh, reinforced security presence along the borders, and suspended rail connectivity indefinitely. However, weeks later, the largest land port, connecting Petrapole (India) and Benapole (Bangladesh) was reopened, to normalise trade. Economic interdependence and multiple connectivity linkages were responsible for this speedy return to normalcy. This incident symbolises a long-awaited success for New Delhi in South Asia, marking the fruition of its efforts to cultivate economic interdependencies and physical linkages in the region to bolster overall regional stability and security. While economic and infrastructure interconnectedness was not the only factor in swift normalisation, it was a significant one. India’s ability to swiftly and decisively restore bilateral trade with Bangladesh underlines the importance that the country accords to its neighbourhood.
Governments in New Delhi and Dhaka need to find continuity in the bilateral cooperation, essential for holistic economic development on both sides of the border and for stabilising the rather tumultuous geopolitical milieu in South Asia.
India’s role in economic development and regional growth has partly (yet significantly) been cultivated by extensive connectivity projects across the region. While national parties in other countries may instrumentalise anti-India rhetoric to gain power, they still recognise the importance of New Delhi’s various economic and physical linkages in regional development. This is particularly true for Bangladesh, a country that wishes for a developing country status in the UN by 2026 and needs multiple development partnerships to achieve the same. Governments in New Delhi and Dhaka need to find continuity in the bilateral cooperation, essential for holistic economic development on both sides of the border and for stabilising the rather tumultuous geopolitical milieu in South Asia.
New Delhi's position in the region requires constant effort. India's influence and the region's development depend on its proactive engagement with neighbouring countries. The largely untapped credit line extended to Bangladesh presents both a challenge and an opportunity. The interim government’s cautious approach in using India’s credit lines could cost Bangladesh in its long-term developmental trajectory. Engagement with Bangladesh's interim government necessitates a dual approach: Maintaining existing projects and exploring new avenues of cooperation. Sectors like renewable energy, digital infrastructure, and climate resilience offer promising areas for collaboration. The future of India's bilateral ties hinges on its ability to adapt and maintain its role in driving regional progress.
Sohini Bose is an Associate Fellow at the Observer Research Foundation.
Prithvi Gupta is a Junior Fellow at the Observer Research Foundation.
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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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Prithvi works as a Junior Fellow in the Strategic Studies Programme. His research primarily focuses on analysing the geoeconomic and strategic trends in international relations. ...
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