IAS Gyan

Daily News Analysis

India-Bangladesh Relation

22nd June, 2024 International Relations

India-Bangladesh Relation

Source: TheHindu

Disclaimer: Copyright infringement not intended.

Context: Bangladesh PM Sheikh Hasina to Visit on June 21-22, First Bilateral Visit Since Modi's Third Term.


India and Bangladesh share a relationship that is deeply rooted in history, language, and culture. This bond has evolved into a robust partnership founded on sovereignty, equality, trust, and mutual understanding, serving as a model for bilateral relations in the region and beyond.

Infrastructure Projects

Strategic Location and Major Infrastructure Projects

  • Matabari Port and Akhaura-Agartala Rail Link:
    • Strategic location for transport and navigation from India’s point of view.
    • High population density and increased need for hinterland transportation in Bangladesh.
    • Developments mostly cover Dhaka and port cities.
    • Provide continuous and established connection to Agartala and the Indian mainland.

Akhaura-Agartala Rail Link

  • Inauguration: 1st November 2023.
  • Connectivity: Bangladesh and North Eastern region through Tripura.
  • Connection: Chattogram and Mongla ports of Bangladesh.
  • Benefits:
    • Enhances cooperation and connectivity in the region.
    • Reduces distance from 1,600 km to 500 km.
    • Reduces travel time from 31 hours to approximately 10 hours.
    • Bypasses the congested Siliguri corridor (Chicken Neck).

Matarbari Deep Sea Port

  • Assistance: Japan.
  • Potential: Capable of handling larger cargo.
  • Significance:
    • Important industrial route linking Dhaka and North Eastern India.
    • Balances China’s influence in South Asia through the Belt and Road Initiative (BRI).
    • Boosts connectivity of regional trade networks.

Trade Agreements

Comprehensive Economic Partnership Agreement (CEPA)

  • Announcement: 2022.
  • Current Status: Not yet on the official negotiation level.
  • Future Plans: Post-election continuation.
  • Components:
    • Joint working group set up in October 2023.
    • Focus on trade and investments, reducing trade tariffs on various goods.
  • Impact:
    • Builds strong trade movement with services, professionals, and investment.
    • Reduces bilateral trade deficit and trade barriers.

Trade Figures

  • India to Bangladesh Exports:
    • 2020: USD 7.91 Billion.
    • 2021: USD 14.1 Billion.
    • 2022: USD 13.8 Billion.
  • Bilateral Trade Deficit: USD 12 Billion (Bangladesh Bank).
    • Imports from India: USD 14 Billion.
    • Imports from Bangladesh: USD 2 Billion.

BBIN-Motor Vehicle Agreement (BBIN-MVA)

  • Countries Involved: Bangladesh, Bhutan, India, Nepal.
  • Purpose: Motor vehicle movement across borders and economic development.
  • Benefits:
    • Promotes collaboration through road and port transport.
    • Enhances regional integration and increases trade.
    • Increases tourism by allowing citizens to travel with their vehicles.
  • Status: Bhutan has not ratified due to environmental concerns; other countries have ratified.

Power and Energy Cooperation

  • Energy cooperation forms a crucial pillar of India-Bangladesh relations.
  • Bangladesh currently imports 1,160 MW of power from India.
  • The India-Bangladesh Friendship Pipeline, inaugurated in March 2023, facilitates the transport of High-Speed Diesel from India to Bangladesh.
  • ONGC Videsh Limited (OVL), in consortium with Oil India Limited, is engaged in offshore oil exploration, indicating a significant collaboration in the energy sector.

Development Partnership

  • Bangladesh is the largest development partner of India. Over the past eight years, India has extended three Lines of Credit (LOC) amounting to approximately USD 8 billion for infrastructure development in various sectors, including roads, railways, shipping, and ports.
  • The Government of India has also funded 93 High Impact Community Development Projects (HICDPs) in Bangladesh, supporting the construction of student hostels, academic buildings, skill development institutions, cultural centers, and orphanages.

Capacity Building and Human Resource Development

  • As an important partner in India’s Indian Technical and Economic Cooperation (ITEC) program, Bangladesh sees around 800 participants annually benefiting from ITEC training courses.
  • In 2024 alone, approximately 1,000 student visas were issued to Bangladeshi students aspiring to study in India under the Self-financing Scheme.

Cultural Cooperation

  • Cultural ties between India and Bangladesh have been strengthened through initiatives like the revamped Bangladesh Youth Delegation 2022 campaign.
  • In February 2024, a 100-member delegation visited India, exploring sites of academic and cultural interest and engaging with prominent leaders, including the President of India. This initiative reflects the importance of youth connectivity in fostering bilateral relations.

Trade Relations

  • Trade Figures:
    • 2020: USD 15.1 Billion.
    • 2021: USD 23.8 Billion.
    • 2022: USD 26.8 Billion.
    • 2023: USD 15.9 Billion.
  • China’s Influence: Increasing presence in Bangladesh through infrastructure, duty-free trade, and BRI.

Defense Cooperation

Historical Context

  • Liberation of Bangladesh: India’s support.
  • US$500 Million Credit: For purchasing defence hardware.


  • Market Potential: Bangladesh as a significant market for Indian defence items.
  • Convenience: Proximity and bargaining position for Bangladesh.
  • Joint Activities: Cooperative training programs, medical support, drills, and counterterrorism exercises (e.g., SAMPRITI).

Involvement of China in Bangladesh

Historical Context

  • Diplomatic Relations: Established in 1976.
  • Principal Armament Supplier: China (75% of Bangladesh’s arms).

Recent Developments

  • Submarine Purchase: USD 203 million for two Type 035G diesel-electric attack submarines.
  • Frigates Purchase: Abu Bakar and Ali Haider.

Implications for India

  • Security Concerns: Potential impact on India’s security.
  • Political vs. Tactical: Acquisitions seen as political moves.
  • Forces Goal 2030: Government’s plan to strengthen military relations.
  • Submarine Base Construction: Assistance from China (Poly Technologies Inc.).

Way Ahead

Key Issues

  • Teesta River Water Sharing: Impacts agricultural sector and cultivation costs.
  • Trade Loops and Rohingya Crisis: Sources of resentment in Bangladesh.

Strategic Engagement

  • Gujral Doctrine Principles: Engage neighbouring countries for mutual benefit.
  • Countering Chinese Influence: Through infrastructure investments and defence cooperation.
  • Awami League’s Role: Positive impact on India-Bangladesh relations with recent win.


Financial Express


Q. Give an account on the India-Bangladesh bilateral relation. 200 words.