Bangladesh-India Relations Ease as Dhaka Secures $2.1 bn China Deal

Bangladesh’s interim government, led by Nobel laureate Muhammad Yunus, has moved to balance its foreign policy after the ouster of former prime minister Sheikh Hasina. Dhaka deepened ties with China, securing a $2.1 billion package that includes $400 million for modernising Mongla Port and over $1 billion for a new Chinese‑backed industrial zone.

At the same time, Bangladesh and India signed an agreement on 12 June 2026 to enhance border patrols, share intelligence and resume tourist visas for Bangladeshi citizens, signalling a thaw in relations that had soured following Hasina’s departure. The bilateral trade relationship remains significant, and the new security cooperation aims to stabilise the long shared border.

Bangladesh’s strategy is described as a hedge: Chinese capital funds large infrastructure projects, while Indian proximity provides essential trade routes and security cooperation. The evolving partnership reflects broader regional competition between Beijing and New Delhi for influence in South Asia.