Relations between India and Bangladesh have undergone a dramatic shift since Tarique Rahman's Bangladesh Nationalist Party (BNP) won the elections in February 2026. This political shift follows Sheikh Hasina's lengthy term, during which bilateral relations attained previously unheard-of levels of cooperation. Given the extent of the two countries' economic, security, and geopolitical interdependence, the shift is not just political but also extremely strategic for India. At this crucial point, a data-driven understanding of the relationship reveals both its advantages and disadvantages. India's pivotal role in Bangladesh's independence during the 1971 Liberation War forms the historical basis of India-Bangladesh relations. This partnership has developed into a strong one over time. Economically speaking, bilateral trade has grown dramatically, reaching about USD 13.51 billion in FY 2024–2025. Bangladesh is India's biggest trading partner in South Asia, with exports totaling approximately USD 11.46 billion and imports of USD 2.05 billion. Strong complementarities can be seen in the trade structure: Bangladesh exports ready-made clothing, textiles, leather goods, and footwear, while India supplies petroleum products, cotton yarn, machinery, and chemicals. Notably, Bangladesh's garment industry, which accounts for almost 80% of its export revenue, is highly dependent on Indian raw materials, resulting in a tightly integrated supply chain that strengthens mutual reliance. This partnership is further strengthened by energy cooperation. Bangladesh currently imports about 1,160 MW of electricity from India to meet its expanding power requirements. The depth of cooperation is demonstrated by joint projects like the 1,320 MW Maitree Super Thermal Power Plant and the India-Bangladesh Friendship Pipeline for high-speed diesel. Furthermore, India has extended three Lines of Credit totaling almost USD 8 billion for the development of infrastructure, including inland waterways, ports, railways, and roads. With the revival of several cross-border rail connections and the use of ports like Chittagong and Mongla for Indian cargo, these investments have greatly enhanced connectivity. These advancements have shown the real economic advantages of collaboration by lowering transportation costs for India's Northeastern states by up to 20–30% on some routes.
India reported more border-related insurgent activity during the BNP regime of 2001–2006, especially involving organisations like ULFA. With ongoing issues like illegal migration, smuggling, and infiltration, the more than 4,000-kilometer border between India and Bangladesh is still among the most delicate in the area. Particularly at risk is the 20–22-kilometer Siliguri Corridor, which connects mainland India to its north-east. The security and connectivity of India's eight northeastern states, which are home to more than 45 million people, could be seriously impacted by any unrest in Bangladesh. The situation is made more difficult by geopolitical factors. Bangladesh has invested more than USD 25 billion in infrastructure projects as a result of its expanding engagement with China under the Belt and Road Initiative (BRI). These consist of energy facilities, ports, and bridges. The potential dual-use nature of such infrastructure, especially ports like Payra and Mongla that may eventually be used for military purposes, is a strategic concern for India. Another issue is the growing anti-Indian sentiment in some segments of Bangladeshi society, particularly among young people. Tensions affecting minority communities have historically accompanied political transitions in Bangladesh, where Hindus make up about 8–9% of the population. Refugee inflows into Indian states like West Bengal and Assam could result from any widespread instability, intensifying political and demographic pressures. The degree of economic and social interdependence offers a solid basis for ongoing participation in spite of these obstacles. Bangladesh's impending graduation from Least Developed Country status in 2026 presents an opportunity for India to intervene with supportive measures like a Comprehensive Economic Partnership Agreement (CEPA), while India's trade surplus of over USD 9 billion offers economic leverage. The relationship can be further stabilized by increasing energy cooperation, streamlining visa procedures for the millions of Bangladeshis who visit India every year for medical and educational reasons, and bolstering regional programmes like BBIN.
Although the BNP's 2026 victory signifies a structural change, the underlying data makes it abundantly evident that Bangladesh and India are still closely linked. The two countries have a relationship that goes beyond political cycles thanks to trade flows, energy exchanges, infrastructure investments, and geographic realities. Managing security concerns while maintaining economic cooperation through practical diplomacy is India's challenge. For India's regional strategy and the accomplishment of its Act East policy, a stable and cooperative Bangladesh is not only desirable but also necessary.
Writer:
Assistant Professor, Commerce and Management
Guru Kashi University Punjab.