Bangladesh’s long-standing alliance with India, strengthened under Sheikh Hasina’s leadership since 2009, faces uncertainty amid speculation of her departure. Hasina’s tenure has been pivotal in eradicating anti-India terrorist groups and enhancing economic, social, and cultural relations between New Delhi and Dhaka.
Bangladesh is India’s largest trade partner in the subcontinent, with bilateral trade totaling $13 billion in FY 2023-24. India exports significant volumes of cotton, petroleum products, and cereals to Bangladesh, which in turn exports ready-made garments. The two countries began discussions on a Free Trade Agreement (FTA) in October 2023, which could significantly boost trade and economic growth.
However, an interim Bangladeshi government or a new administration may affect the FTA’s progress. A 2012 World Bank report suggested that a full FTA could increase Bangladesh’s exports to India by up to 297%, while India’s exports could rise by 172%.
Infrastructure projects, including the Akhaura-Agartala rail link and other connectivity enhancements, have bolstered ties, facilitating trade and travel between the countries. Disruptions in this relationship could impact India’s access to its Northeast region and complicate cargo movement.
