Transit Revoked, Ties Recalibrated: What Bangladesh's Pivot Signals
India’s revocation of transhipment access to Bangladesh marks a broader shift in bilateral ties, driven by Dhaka’s strategic pivot towards China and Pakistan. The move reflects India’s growing unease over regional security and the erosion of mutual trust post-regime change in Dhaka. For India, the implications are twofold: safeguarding its Northeast’s security interests and recalibrating its neighbourhood policy to manage emerging fault lines.
India’s revocation of transhipment access for Bangladeshi exports—effective April 8—marks a significant turning point in bilateral relations. While officially attributed to logistical bottlenecks and rising costs, the decision comes amid deeper political and strategic shifts between New Delhi and Dhaka. It reflects growing Indian unease over Bangladesh’s evolving foreign policy and its perceived distancing from a once-close partnership.
The now-suspended 2020 agreement had allowed Bangladesh to export goods to third countries via Indian ports and airports—an arrangement critical to Dhaka’s ready-made garment (RMG) sector, which faces major infrastructure constraints. Bangladesh’s domestic ports lack the scale and connectivity of Indian hubs like Delhi and Kolkata, making the loss of access a setback for its export competitiveness. The move affects not only bilateral trade flows but also the broader architecture of subregional connectivity that India has championed under initiatives like BBIN and BIMSTEC.
Beneath the trade disruption lies a broader recalibration of political ties. Relations have cooled since the fall of the Sheikh Hasina-led Awami League government in August 2024. The new interim regime under Mohammad Yunus, lacking electoral legitimacy and guided by a council of advisors with little governance experience, has taken a markedly different approach to India. Political signalling—including a controversial statement by Yunus referring to Bangladesh as the "guardian of the ocean" for India’s Northeast—has aggravated Indian concerns about Dhaka’s strategic drift.
Further complicating matters is Bangladesh’s growing engagement with China and Pakistan. Reports of Chinese investment interest in the Lalmonirhat airbase near India’s sensitive Siliguri Corridor, along with renewed defence and trade ties with Pakistan, signal a shifting regional orientation. For India, these developments raise red flags—not only about regional security but also about the erosion of mutual strategic sensitivity that once defined the bilateral relationship.
India’s reaction has been restrained but deliberate. While it has revoked transhipment privileges, it has notably not suspended transit rights for Bangladeshi goods moving through India to Nepal and Bhutan. This suggests a selective recalibration—balancing strategic signalling with a desire to maintain broader regional stability and avoid harming third-party partnerships.
Meanwhile, Bangladesh's domestic politics are feeding into its foreign policy posture. The interim government’s efforts to distance itself from the Awami League have included downplaying India’s role in Bangladesh’s liberation and cancelling cooperative symbols like the National Mourning Day. The recent disruption in Hilsa fish exports to India—reversed only after political and economic pressure—exemplifies the current government's inconsistent approach.
Yet, geography and interdependence remain unavoidable. India is Bangladesh’s second-largest trading partner and one of its top development partners. Bangladesh provides India’s Northeast with maritime access, while India offers Dhaka crucial trade and energy connectivity. The two countries share not only a border, but also overlapping economic and strategic interests that are difficult to disentangle.
Going forward, both sides will need to reassess their engagement models. For India, the priority will be to protect its core security interests while keeping the door open for future re-engagement. For Bangladesh, realism must prevail—neither China nor Pakistan can match India’s proximity, scale, or regional influence. Strategic autonomy need not come at the cost of functional ties with a key neighbour. In this delicate phase, the challenge will be to prevent short-term political divergences from undoing decades of progress. For India, particularly, this is of concern at a time when tensions with Pakistan are at a high. With Bangladesh's pivot to China and Pakistan, India could become isolated in the sub-continent.