Citation

Ata, S. A. (2025). Contemporary India–Bangladesh Relations: Cooperation, Challenges, and Prospects for Regional Connectivity. International Journal of Research, 12(2), 772–780. https://doi.org/10.5281/zenodo.22648647

Professor (Dr.) Shakil Ahmad Ata

Head, PG Department of Political Science

Ramjaipal College, J. P. University Chapra Saran Bihar 841301

Abstract

This article examines the contemporary dynamics of India–Bangladesh relations, situating the bilateral partnership within the broader context of South Asian regionalism. Drawing on recent developments in trade, connectivity, security cooperation and people-to-people exchanges, the analysis highlights both the substantial progress achieved since the early 2010s and the persistent structural constraints that continue to shape the relationship. Particular attention is paid to the 2024 political transition in Bangladesh and its implications for future cooperation. The study argues that while economic interdependence and shared strategic interests provide a solid foundation for deeper integration, unresolved issues surrounding water sharing, border management and external influences—especially from China—require sustained diplomatic engagement. The article concludes with targeted policy recommendations aimed at strengthening regional connectivity and consolidating the maturing neighbourhood partnership.

Keywords: India–Bangladesh relations; regional connectivity; Teesta water sharing; border governance; Belt and Road Initiative; South Asian integration.

1. Introduction

The relationship between India and Bangladesh constitutes one of the most consequential bilateral partnerships in contemporary South Asia. Since the independence of Bangladesh in 1971, the two countries have navigated a complex trajectory marked by periods of close cooperation and occasional friction. In recent years, however, the partnership has matured into a multifaceted engagement encompassing trade, transit, energy, security and cultural exchanges. This evolution reflects both the growing economic weight of the two nations and the shared recognition that regional stability and prosperity depend upon constructive neighbourhood relations (van Schendel 2005).

The present study provides a comprehensive assessment of India–Bangladesh relations in the second half of the 2020s. It analyses the principal pillars of cooperation, identifies the sources of persistent tension and evaluates the prospects for enhanced regional connectivity. The analysis draws upon official documents, academic scholarship and recent policy reports to offer an empirically grounded account of a relationship that is simultaneously cooperative and competitive. By focusing on the period following the landmark 2015 Land Boundary Agreement and the subsequent intensification of economic ties, the article illuminates the mechanisms through which two large developing countries have sought to transform historical legacies into a forward-looking strategic partnership.

The significance of this relationship extends well beyond the bilateral domain. Bangladesh’s emergence as a lower-middle-income economy with one of the fastest-growing manufacturing sectors in Asia has made it an increasingly important economic partner for India. At the same time, India’s role as the dominant power in South Asia means that its policies towards Bangladesh carry substantial implications for the broader regional architecture. The interplay between domestic politics, economic interests and external influences—particularly the growing presence of China—creates a strategic triangle that shapes the parameters of possible cooperation (ICG 2025).

2. The Modern Trajectory of the Relationship

The contemporary phase of India–Bangladesh relations can be traced to the political changes that occurred in both countries during the first decade of the twenty-first century. The return to power of the Awami League in Bangladesh in 2009 and the consolidation of the United Progressive Alliance government in India created a political window for the resolution of long-standing disputes. The 2011 Framework Agreement on Cooperation for Development marked an important symbolic step, although its implementation remained uneven (Ranjan 2025).

The most tangible achievement of this period was the 2015 Land Boundary Agreement, which resolved the long-standing enclaves issue and simplified the international border. This agreement removed a significant irritant that had complicated bilateral relations for decades and created the conditions for more ambitious cooperation in the areas of trade facilitation and border infrastructure. The agreement was widely welcomed by civil society organisations on both sides of the border and demonstrated that political will could overcome seemingly intractable territorial disputes (van Schendel 2009).

Economic relations expanded rapidly after 2015. Bilateral trade grew from approximately US$6 billion in 2015 to over US$14 billion by 2023, driven largely by Indian exports of cotton, machinery and chemicals and Bangladeshi exports of garments and textiles. India emerged as one of Bangladesh’s top trading partners, while Bangladesh became an important destination for Indian investment in the textile and pharmaceutical sectors. The establishment of border haats and the expansion of land ports further facilitated cross-border commerce and people-to-people contact (IBEF 2024).

Connectivity initiatives also gained momentum. The operationalisation of the India–Bangladesh Protocol on Inland Water Transit and Trade, the restoration of several rail links and the inauguration of bus services between major cities represented concrete steps towards physical integration. Energy cooperation, including the construction of cross-border electricity transmission lines and the proposed natural gas pipeline, added another dimension to the relationship. These developments reflected a shared understanding that economic interdependence could serve as a foundation for political stability in a region historically prone to conflict (ADB 2015).

3. Pillars of Bilateral Cooperation

3.1 Trade, investment and market access

Trade constitutes the most visible dimension of the contemporary relationship. The India–Bangladesh trade agreement, originally signed in 1972 and subsequently revised, provides for preferential market access on a range of products. In practice, however, non-tariff barriers, including lengthy customs procedures and restrictive rules of origin, have limited the realisation of potential gains. Bangladeshi exporters have repeatedly raised concerns about the complexity of Indian sanitary and phytosanitary requirements, while Indian exporters have pointed to port congestion and regulatory uncertainty in Bangladesh (Exim Bank 2024).

Investment flows have been more balanced. Indian companies have established manufacturing facilities in Bangladesh’s special economic zones, particularly in the textile and pharmaceutical industries. Conversely, Bangladeshi conglomerates have invested in India’s real estate, hospitality and information technology sectors. The bilateral investment promotion and protection agreement, signed in 2009 and renewed in 2022, provides a legal framework for these flows, although investor-state dispute settlement mechanisms remain underutilised.

3.2 Connectivity, transit and energy

Physical connectivity has improved markedly. The restoration of the pre-1965 rail links, including the Haldibari–Chilahati and Gede–Darsana routes, has reduced transit times for goods moving between India’s northeast and the rest of the country. The operationalisation of the Ashuganj river port as a trans-shipment point for Indian cargo destined for the northeast represents a significant innovation in multimodal logistics. These developments have lowered transport costs and strengthened economic linkages between India’s landlocked northeastern states and the Bay of Bengal (ADB 2015).

Energy cooperation has emerged as a particularly promising area. The 400 kV Baharampur–Bheramara cross-border transmission line, commissioned in 2018, enables the export of Indian electricity to Bangladesh during peak demand periods. Discussions are underway for a second high-voltage direct current link and for the construction of a natural gas pipeline from Assam to Bangladesh. These projects are expected to enhance energy security for both countries and create the infrastructure for a regional power grid (Ranjan 2025).

3.3 Security, border and maritime cooperation

Security cooperation has deepened in response to shared threats from transnational terrorism, narcotics trafficking and illegal migration. The coordinated border management plan, implemented since 2016, has reduced incidents of cross-border firing and facilitated the exchange of intelligence. Joint patrols along the land border and coordinated maritime surveillance in the Bay of Bengal have strengthened the capacity of both countries to address non-traditional security challenges. The 2023 agreement on maritime security cooperation formalised these arrangements and established a framework for joint exercises (ICG 2025).

Maritime delimitation, resolved through international arbitration in 2014, removed a potential source of friction and opened the way for joint exploration of hydrocarbon resources in the Bay of Bengal. Although commercial exploitation has been slow, the legal certainty provided by the award has encouraged investment in seismic surveys and has contributed to a more cooperative maritime posture.

3.4 Development and people-to-people ties

Development cooperation has expanded through Indian lines of credit and technical assistance programmes. India has extended more than US$8 billion in concessional financing to Bangladesh for infrastructure projects, including power plants, roads and bridges. Capacity-building programmes in agriculture, health and education have complemented these investments. The Indian Technical and Economic Cooperation programme has trained thousands of Bangladeshi officials and professionals, fostering long-term institutional linkages (Exim Bank 2024).

People-to-people ties remain robust. Visa regimes have been liberalised, enabling increased tourism, medical travel and educational exchanges. The large Bangladeshi diaspora in India and the presence of Indian professionals in Bangladesh’s development sector have created dense transnational networks. Cultural exchanges, including joint film productions and literary festivals, have reinforced the sense of shared heritage that underpins the political relationship (van Schendel 2005).

Table 1: Core frameworks of India–Bangladesh cooperation

Domain	Key Framework	Status (2025)
Trade	Preferential Trade Agreement (1972, revised)	Operational; NTBs persist
Connectivity	Protocol on Inland Water Transit (1972)	Expanded; rail & river links active
Energy	Cross-border Power Trade Agreement (2014)	Two HVDC lines operational
Security	Coordinated Border Management Plan (2016)	Joint patrols; intelligence sharing
Development	Lines of Credit Framework (2010, renewed 2022)	US$8+ billion committed

 

4. Persistent Challenges and Sources of Friction

4.1 The unresolved water file: Teesta

Water sharing remains the most intractable bilateral issue. The Teesta river, which originates in India and flows through Bangladesh before joining the Brahmaputra, has been the subject of protracted negotiations since the 1980s. Although a draft agreement was initialled in 2011, domestic political opposition in the Indian state of West Bengal has prevented its finalisation. The absence of a comprehensive water-sharing treaty has led to periodic crises, particularly during the dry season when upstream withdrawals in India reduce flows into Bangladesh, affecting irrigation and fisheries (van Schendel 2009).

Successive rounds of talks have failed to break the impasse. Bangladesh has proposed a 50:50 sharing arrangement during the lean season, while India has emphasised the need for data sharing and joint management of upstream infrastructure. The lack of progress has become a symbol of the limits of bilateral cooperation and has been exploited by domestic political actors in both countries. The issue illustrates the difficulty of translating technical solutions into politically acceptable agreements when subnational interests are at stake (Ranjan 2025).

4.2 Border governance and migration

Despite the resolution of the enclave issue, border governance continues to generate friction. The killing of Bangladeshi nationals by Indian border forces, although reduced in frequency, remains a sensitive issue that periodically strains diplomatic relations. The construction of the border fence by India, intended to curb illegal migration and smuggling, has been criticised in Bangladesh as an unnecessary barrier that disrupts traditional cross-border communities (van Schendel 2005).

Irregular migration, driven by economic disparities and climate-induced displacement, continues to pose challenges for both countries. While Bangladesh has made significant progress in reducing poverty and creating employment, the pressure of population density and the increasing frequency of extreme weather events have sustained outflows. India’s response has oscillated between periodic regularisation drives and stricter enforcement, creating uncertainty for migrants and their families (Samaddar 1999).

4.3 China and the strategic triangle

The growing economic and strategic presence of China in Bangladesh has introduced a new dimension to the bilateral relationship. Chinese investment in infrastructure, particularly under the Belt and Road Initiative, has expanded rapidly. Major projects include the Padma Bridge rail link, several power plants and the development of deep-sea ports. While these investments address genuine infrastructure deficits, they have raised concerns in India about strategic encirclement and debt sustainability (ICG 2025).

Bangladesh has sought to maintain a balance between its two powerful neighbours, pursuing an ‘equidistance’ policy that maximises economic benefits while avoiding exclusive alignment. This approach has been facilitated by the relatively pragmatic stance of the Chinese government, which has avoided overt political conditionality. Nevertheless, the strategic triangle creates dilemmas for policymakers in Dhaka, who must navigate Indian sensitivities without jeopardising access to Chinese capital and technology (Ranjan 2025).

4.4 The 2024 political transition

The political transition that occurred in Bangladesh in 2024 introduced a new element of uncertainty into the relationship. The departure of the long-ruling Awami League government and the installation of an interim administration led by Muhammad Yunus created a period of flux in which established patterns of cooperation were temporarily disrupted. While both governments have expressed commitment to continuity in bilateral relations, the change in leadership has opened space for a reassessment of priorities and has emboldened domestic constituencies critical of close ties with India (ICG 2025).

Early indications suggest that the interim government has adopted a more cautious approach to several high-profile Indian projects, including the proposed Teesta river management initiative. At the same time, it has signalled interest in diversifying economic partnerships and has welcomed renewed engagement from Western donors. The trajectory of the relationship in the coming years will depend in large measure on the outcome of the next general election and the extent to which the new political dispensation prioritises neighbourhood cooperation over other foreign policy objectives.

5. Prospects for Regional Connectivity

Despite the challenges outlined above, the prospects for deeper regional connectivity remain substantial. The completion of the Asian Highway Network and the Trans-Asian Railway, both of which traverse Bangladesh, would create new opportunities for transit trade and position the country as a regional logistics hub. The proposed Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) master plan for transport connectivity, if implemented, would further integrate Bangladesh into the wider South and Southeast Asian economy (ADB 2015).

Digital connectivity offers another avenue for cooperation. The establishment of a regional data centre and the expansion of fibre-optic links could support the growth of the digital economy in both countries. Joint initiatives in fintech, e-commerce and digital public infrastructure could generate new forms of economic interdependence that are less vulnerable to the political frictions that have historically affected physical trade. The success of these initiatives will depend upon regulatory harmonisation and the development of trusted digital governance frameworks (Ranjan 2025).

6. Conclusion

India–Bangladesh relations have reached a level of maturity that would have been difficult to imagine two decades ago. The resolution of the enclave dispute, the expansion of trade and investment, the development of cross-border infrastructure and the institutionalisation of security cooperation represent tangible achievements. Yet the relationship remains constrained by unresolved water-sharing disputes, the complexities of border governance, the strategic implications of China’s growing role and the uncertainties introduced by political change in Bangladesh.

The central argument of this analysis is that the bilateral partnership is fundamentally sound but requires sustained political investment to realise its full potential. Economic interdependence provides a buffer against periodic political tensions, but it cannot substitute for the resolution of structural disputes. The 2024 transition has created both risks and opportunities: risks that established cooperative frameworks will be questioned, and opportunities for a recalibration that addresses long-standing grievances. The coming years will test whether the two countries can build upon the achievements of the past decade while addressing the issues that have proven most resistant to resolution.

7. Policy Recommendations

Based on the foregoing analysis, the following recommendations are offered:

• Prioritise the conclusion of a Teesta water-sharing agreement through a time-bound bilateral mechanism that incorporates subnational stakeholder consultations and climate-adaptive provisions.
• Establish a permanent India–Bangladesh Border Commission with authority to investigate incidents, recommend compensation and oversee the implementation of humane border management protocols.
• Develop a joint infrastructure financing facility, capitalised by both governments and multilateral institutions, to fund connectivity projects that serve the interests of both countries and reduce dependence on external powers.
• Accelerate regulatory harmonisation in trade facilitation, including mutual recognition of standards, simplified rules of origin and digitised customs procedures.
• Institutionalise a biannual strategic dialogue at the foreign minister level, supported by working groups on water, connectivity, security and economic cooperation, to provide continuity across political transitions.

References

ADB (2015) Connecting South Asia and Southeast Asia: A Bangladesh Perspective. Manila: Asian Development Bank.

Exim Bank (2024) India–Bangladesh Economic Relations: Trade, Investment and Future Prospects. Mumbai: Export-Import Bank of India.

IBEF (2024) India–Bangladesh Bilateral Trade and Investment Report. New Delhi: India Brand Equity Foundation.

ICG (2025) Bangladesh’s Political Transition and Regional Implications. Brussels: International Crisis Group.

Ranjan, A. (2025) India, Bangladesh and the Politics of Water Sharing. New Delhi: Oxford University Press.

Samaddar, R. (1999) The Marginal Nation: Transborder Migration from Bangladesh to West Bengal. New Delhi: Sage Publications.

van Schendel, W. (2005) The Bengal Borderland: Beyond State and Nation in South Asia. London: Anthem Press.

van Schendel, W. (2009) A History of Bangladesh. Cambridge: Cambridge University Press.