India’s string of trade restrictions on Bangladesh, including the suspension of trans-shipment facilities and curbs on key imports via land ports, signals more than just an economic response. As the Yunus-led interim regime continues to provoke India’s northeast, while Pakistan dispatches top military and ministerial delegations to Dhaka and China strengthens its presence, the geopolitical undertone is hard to miss. Adding to the complexity are subtle cues from the exiled Awami League leadership, prompting a sharper dilemma: Is Dhaka testing New Delhi’s threshold? Or has India begun to shed its ‘friendly neighbour’ lens in dealing with Bangladesh?
What has become evident is that India-Bangladesh relations are at their lowest and many view India’s recent trade-related measures as steps "laden with both economic and geopolitical significance," according to a News18 report.
"The trade relations between India and Bangladesh are not just about economic interests. It is crucial for South-East Asia’s stability and unity. This also leads to progress and development for both nations. However, the interim government in Bangladesh has been taking certain policy decisions and supporting an international narrative which is not conducive to stable bilateral relations," News18 quoted a senior diplomat, who served in Bangladesh, as saying.
"Despite knowing that there would be repercussions across the border, Bangladesh continued to meddle with India’s sensitive and strategic boundaries. The Yunus-led government also ignored Prime Minister Narendra Modi’s suggestions of not bringing up north-east corridors as part of their speeches. India then chose to make some changes following those instances. The recent decisions are not trading friction in isolation. They are calibrated and well-thought policy decisions," he added.
Beyond trade, India and Bangladesh have engaged in wide-ranging cooperation across sectors such as energy, railways, and cultural exchange. As per a Ministry of Commerce document, the 15th meeting of the Joint Working Group on Trade (JWG) was held in Dhaka on September 26–27, 2023.
According to a review by the India Brand Equity Foundation (IBEF), the meeting addressed several bilateral priorities, including lifting port restrictions, laying the groundwork for a Comprehensive Economic Partnership Agreement (CEPA), aligning and mutually recognising standards, ensuring the steady supply of essential goods to Bangladesh, improving road and rail connectivity, and boosting regional links through multi-modal transport. Discussions also focused on developing infrastructure at Land Customs Stations, Integrated Check Posts, and border haats.
However, following the fall of Sheikh Hasina’s government, most of these initiatives have come to a standstill. Senior diplomats note that Bangladesh’s foreign policy is likely to remain “unpredictable” until a new government is elected, the report added.
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