More than a week after the chief adviser of Bangladesh’s interim government, Muhammad Yunus, created a ripple in South Asia by asking China to expand its economic base in his country as it is “the only guardian of the ocean” for India’s seven landlocked northeastern states, New Delhi has decided to withdraw trans-shipment facility to Dhaka, preventing it to export cargo to any third country using Indian ports and airports.

The decision to this effect was announced through a notification issued by India’s Central Board of Indirect Taxes and Customs (CBIC) on April 8. In response to a question on the issue, the spokesperson of the ministry of external affairs, Randhir Jaiswal, said the trans-shipment facility extended to Bangladesh in 2020 had over a period of time “resulted in significant congestion at our airports and ports. Logistical delays and higher costs were hindering our own exports and creating backlogs”.

It has clearly signaled that relations between the two countries are under strain as Bangladesh under Yunus continues to be impervious to India’s interest. Rather, it is relying on China and Pakistan to create an atmosphere, which is inimical to India’s strategic and security concerns in the Northeast region.

In the course of a four-day visit to China, during March 26-29, Yunus, in his attempt to leverage his country’s strategic position and its access to India’s northeast region, asked Beijing to enhance its economic base in Bangladesh as “the seven states of eastern India, known as the seven sisters, are a landlocked region. They have no direct access to the ocean…We are the only guardian of the ocean for the entire region. This opens up a huge opportunity. It could become an extension of the Chinese economy.”

Modi-Yunus meeting
Despite this controversial statement by Yunus, prime minister Narendra Modi, at the request of Dhaka, held a meeting with him on the sidelines of the just concluded BIMSTEC summit in Bangkok. This was the first meeting between the two leaders since the ouster of former Bangladesh PM Sheikh Hasina on August 5, 2024.

Lasting for 39 minutes, the meeting, as per India’s foreign secretary Vikram Misri dwelled on several issues, including New Delhi’s desire “to forge a positive and constructive relationship with Bangladesh based on a spirit of pragmatism”.  In that meeting, the two leaders also discussed measures to curb illegal border crossings. Along with this, prime minister Modi also made the Bangladesh chief adviser aware of India’s concern over “safety and well-being of Hindus and other minorities.”

Need to normalize ties
Experts say the meeting offered the Bangladesh interim government’s chief adviser a rare opportunity to have a dialogue with the Indian prime minister and normalize the relations between the two countries.

In the wake of attacks on minority Hindus, their properties, and temples, coupled with the unchecked flow of anti-India propaganda in the months following the formation of the Yunus-led interim government in Bangladesh, relations between the two close neighbours have hugely deteriorated.

Islamist groups like the Jamaat-e-Islami, the Hefazat-e-Islam and the Hizbut Tahrir have fast gained ground and legitimacy. These issues have been highlighted by India at several levels with Bangladesh, even at the leadership-level.

Lack of sensitivity towards India
However, the much talked about meeting between Modi and Yunus turned into a game of political spin, hijacked by the chief adviser of the Bangladesh interim government’s press team in an apparent bid to appease domestic constituents.

Twisting the facts, Shafiqul Alam, the press secretary to the Bangladesh chief adviser, wrote a post in his Facebook account, saying that PM Modi spoke highly of Yunus’s work. “One of the things he said in the meeting was that while India had good relations with Sheikh Hasina, ‘We saw her disrespectful behaviour towards you. But we continued to respect and honour you’.” Further, he wrote “When Professor Yunus raised the extradition of Sheikh Hasina, the response was not negative.”

These claims were strongly refuted by Indian officials. One government representative on the condition of anonymity described the Facebook post as “mischievous and politically motivated,” further dismissing the portrayal of Modi’s remarks as “inaccurate”.

Invariably, the incident showed that the press secretary of the Bangladesh interim government’s chief adviser was more interested in giving a political colour to the meeting to please domestic constituents than appreciating the spirit of high-level diplomatic engagement.

This is particularly concerning given that the meeting itself reportedly took place following multiple requests from Dhaka.

Playing China card against India
In the meantime, Bangladesh has triggered widespread concern in India by reportedly inviting China to assist in the revitalization of the British-era airbase at Lalmonirhat, located near the strategically sensitive Siliguri Corridor – a narrow stretch of land that connects mainland India to its northeastern states.

According to multiple media reports, work on the Lalmonirhat airbase could begin as early as October 2025, with a Pakistani company reportedly involved as a subcontractor. This prospect of China-Pakistan participation in a project near such a sensitive choke point has enhanced India’s apprehensions, fuelling concerns of increased regional volatility.

India is already worried about the increasing footprint of China in Bangladesh. Last month, during the visit of Yunus to Beijing, Bangladesh secured fresh $2.1 billion in loans from China for various infrastructure projects, including the Teesta river project, modernization of Mongla Port and a Special Economic Zone in Chittagong.

The involvement of China in these projects in Bangladesh has a potential of disturbing regional balance. For instance, the Teesta river has long been a point of contention between India and Bangladesh. In fact, due to political sensitivities within India, the Teesta river water sharing pact between New Delhi and Dhaka has been stalled for years. Now China has been involved in the project for its management and infrastructure development.

Experts say this marks a significant shift, as an issue which has been traditionally negotiated between India and Bangladesh, is now poised to come under the influence of China. This will not only complicate future negotiations between India and Bangladesh but also raises concerns in New Delhi about leverage Beijing may gain through this involvement in the Teesta river project.

Amid this, the modernization of Mongla port, located in southwest Bangladesh, has raised alarm in India. While port development is framed as commercial, India is wary of dual-use possibilities – something that has been witnessed in the case of Hambantota port in Sri Lanka and Gwadar port in Pakistan. Moreover, given that an upgraded Mongla port would lead to an increase in China’s influence in the Bay of Bengal, experts believe that Beijing would get an opportunity to further strengthen its “String of Pearls” strategy around India.

And, it is apparent with the planned China-led Special Economic Zone in Chittagong, a key port city of Bangladesh. Armed with multiple dimensions, including economic and strategic, Chittagong has potential of deepening China’s influence in Bangladesh. According to experts, a China-led economic zone would evolve into a major logistics hub, supporting Beijing’s ambitions in the Indo-Pacific region.

Growing proximity between Bangladesh and Pakistan
With Yunus at the helm of Bangladesh’s affairs, Pakistan has stepped up efforts to reset ties with Dhaka amid growing influence of China in the region. To give a significant push to this resetting effort, Pakistan is sending its deputy prime minister and foreign minister Ishaq Dar to Dhaka on April 22, as per a report in the Dhaka Tribune.

Yunus has already met Pakistan prime minister Shehbaz Sharif on the margins of the D-8 Summit at Cairo on December 20, 2024. To the chagrin of India, Bangladesh and Pakistan are planning to strengthen defence cooperation, intelligence-sharing mechanism and launch Pakistan-Bangladesh Political Consultative Meeting.

This warming of ties between the two countries has raised concerns in India. It is feared that enhanced military collaboration and intelligence sharing between Bangladesh and Pakistan could impact the regional security landscape.

This fear started deepening among Indian strategists when the Bangladesh Navy for the first time in decades joined the Pakistan Navy organised AMAN-25 multinational naval drills in the Arabian Sea near Karachi from February 7 to 11.

Fifty countries, including China, Russia, Saudi Arabia, Turkey, and Iran, participated in the naval exercise. It highlighted the evolving defence posture of Bangladesh as well as growing defence partnership among Dhaka, Islamabad, Beijing and others.

Conclusion
South Asia is currently witnessing a sharp change in its geopolitical situation, which has largely been triggered by Bangladesh’s growing tilt toward China and Pakistan under the leadership of Yunus. While India has made diplomatic overtures – such as the recent Modi-Yunus meeting – to salvage ties, these efforts have been met with political opportunism and a lack of sensitivity to India’s core strategic and security concerns.