India’s Infrastructure Investments in Bangladesh Under Scrutiny

India’s significant infrastructural interests in the neighbouring country remain under close observation. During her 15-year tenure, Hasina fostered robust partnerships with India, focusing on several key infrastructure projects aimed at strengthening regional connectivity, particularly with India’s northeastern states.

The transition to an interim government led by Nobel Peace laureate Muhammad Yunus has introduced a period of political uncertainty. As this interim administration seeks to restore stability, the Indian government is meticulously monitoring ongoing projects where Indian investments and interests are deeply entrenched. India’s involvement in Bangladesh’s infrastructure has been substantial, with the Indian government-backed Export-Import (EXIM) Bank being a primary financier. As of mid-2023, EXIM Bank had committed approximately $7.9 billion to various projects in Bangladesh. This financial support underscores India’s commitment to enhancing regional connectivity and economic integration.

One of the most notable projects is the upgrade of Mongla Port, Bangladesh’s second-largest port, managed by Egis India Consulting Engineers Pvt Ltd. This project is crucial for bolstering trade and commerce in the region, enhancing connectivity between the Bangladesh-Bhutan-India-Nepal (BBIN) countries. Mongla Port is set to play a pivotal role in the Indo-Bangladesh Protocol Route, linking India’s National Waterway 1 and 2, thereby improving river connectivity between northeastern states and the rest of India while serving as a key transshipment hub. Additionally, the Matarbari deep-sea port, still under development and expected to become operational by 2027, is anticipated to be a game-changer for both Bangladesh and Northeast India.

Funded by the Japan International Cooperation Agency (JICA) under the Bay of Bengal Industrial Growth Hubs initiative, Matarbari Port is designed to accommodate larger cargo ships, with a bulk cargo handling capacity of 16-38 million tonnes and a container capacity of 4.9 million TEUs. This port is poised to integrate industrial value chains and enhance logistical efficiency in the region. The political changes in Bangladesh present both opportunities and challenges for India. As the new administration navigates its path, the continuation and success of these projects will be crucial in maintaining and strengthening the infrastructural and economic ties between the two nations. India’s strategic investments are set to play a significant role in shaping regional trade dynamics and connectivity, underscoring the importance of stability and continued cooperation in the bilateral relationship.