The relationship between India and Bangladesh has always been based on a special historical, social and cultural basis. India’s decisive role in Bangladesh’s struggle for independence in 1971 made the two countries close friends. However, events in recent years, especially in 2024-25, have brought many ups and downs in this relationship.
Historical background: Strong foundation of friendship
In the 1971 Liberation War, India not only provided military support to liberate Bangladesh, but also gave shelter to more than 1 crore refugees. Since this conflict, close ties were established between the two countries in trade, water resources management, security cooperation and cultural exchange. In 2021, the ‘Maitri Setu’ was inaugurated, which established a direct connection between Tripura in India and Chittagong Port in Bangladesh. It became an important part of India’s ‘Act East Policy’.
Political instability and rift in relations
The power struggle in Bangladesh suddenly took a new turn in mid-2024. Bangladesh Prime Minister Sheikh Hasina, who was in power for the last one and a half decade, was surrounded by protests by students and opposition parties. After the withdrawal of support from the army, Sheikh Hasina had to resign and she was forced to take refuge in India. The interim government of Bangladesh demanded the extradition of Hasina, which India has so far rejected. This created serious tension in bilateral relations. Bangladesh considered this as interference in its internal affairs and anti-India rhetoric intensified.
Deterioration in trade relations
India-Bangladesh economic relations also fell victim to the political situation. In April 2025, India withdrew the transit facility given to Bangladesh. Under this, Bangladesh used to send its textile exports to other countries through India. This decision shocked the economy of Bangladesh as its textile industry is the basis of 80% of GDP and 4 crore jobs. This led to a 17% increase in Bangladesh’s export costs and many small traders were forced to the streets. India cited security reasons and increased border smuggling as the reason, while Bangladesh called it part of political pressure.
Growing security concerns on the border
In 2024, the BSF seized smuggled material worth ₹461 crore on the India-Bangladesh border, the highest in the last 10 years. It included weapons, drugs, cattle and counterfeit currency. Bangladesh claimed that this smuggling is done by organized gangs on both sides and some Indian agencies are also involved in it. At the same time, India accused the Bangladesh government of negligence in action. The tension on the border increased so much that many times there were clashes between the security personnel of both sides.
Teesta River Water Dispute
The Teesta River water sharing dispute has been unresolved since 1983. Bangladesh says that it should get 50% of the river’s water, while India kept blocking the agreement citing the interests of the farmers of West Bengal. In 2025, Bangladesh raised the issue again and sought international mediation. But India turned it down, calling it a bilateral matter. The issue further increased mistrust and resentment between the two countries.
Growing closeness with Bangladesh-Pakistan
After 15 years, Bangladesh and Pakistan decided to normalize diplomatic relations in late 2024. Both started dialogue towards trade, defense and cultural exchange. India considered it a diplomatic failure and feared that Pakistan could promote anti-India activities through Bangladesh. Sympathetic reports also started appearing in the media of Pakistan and Bangladesh, especially on the Kashmir issue.
Dr. Muhammad Yunus’s visit to China and strategic partnership
In August 2024, Dr. Muhammad Yunus, head of the interim government of Bangladesh, during a meeting with Chinese Ambassador Yao Wen, urged China to relocate some of its solar panel factories to Bangladesh. Yunus said that China is a major manufacturer of solar panels, but it is facing increasing restrictions in the export market. He suggested that shifting these factories to Bangladesh would not only provide China with new markets for its products but also help Bangladesh move towards a green economy and diversify its exports. Yunus particularly highlighted the northern regions of Bangladesh, such as Sylhet and Rangpur, as suitable locations for these investments, which are located close to India’s ‘Chicken Neck’ region. Investments in the region would not only boost Bangladesh’s economic development but could also become a strategic concern for India, as the region provides the only land connectivity to India’s north-eastern states.
During his visit to China, the two countries are likely to sign an agreement under which Bangladesh will receive a grant of 1 billion yuan (about $138 million or Taka 1,678 crore). The amount is earmarked for jointly selected projects, including the construction of a world-class hospital in Bangladesh. Additionally, four specialized hospitals have been established for Bangladeshis in Kunming city, China, and China plans to establish a specialized hospital in Bangladesh as well. Dr Yunus also expressed his desire to cooperate with China in other areas, including the establishment of a Chinese economic zone, the launch of a Bangladesh-China free trade agreement, and negotiations on an investment treaty. These initiatives are aimed at strengthening Bangladesh’s healthcare system and accelerating the country’s economic development. In addition, Yunus also urged China to enhance cooperation in technology transfer, disaster management, education, and agriculture. Chinese Ambassador Yao Wen expressed his commitment to support the interim government of Bangladesh and to enhance economic cooperation between the two countries. This initiative may further strengthen the relationship between Bangladesh and China, but it presents a new strategic challenge for India, especially in terms of the security and sovereignty of its north-eastern states.
China’s growing role in Bangladesh
China recently gave Bangladesh a loan package of $2.5 billion, in which the interest rates are much lower than India. Also, China has started giving medical visas to Bangladesh. In addition, negotiations for a free trade agreement (FTA) have also begun. The effect of this is that Bangladesh is now looking at China as its biggest economic partner. India has described these activities of China as a ‘strategy to increase its influence in South Asia’.
Impact on cultural and sports relations
While once the organization of cricket matches, film festivals and cultural fairs between India and Bangladesh used to be a symbol of friendship between the two countries, now these events have also been affected. During the India-Bangladesh match in the 2025 Asia Cup, there have been political sloganeering and even clashes between spectators. It is clear from this that politics has also affected the bridge of sports and culture.
The journey of relations between India and Bangladesh started with friendship and today has reached the threshold of conflict. Political instability, trade decisions, border security, water disputes, Bangladesh’s closeness with Pakistan and the increasing role of China have complicated these relations. If both the countries do not solve the problems through dialogue and cooperation in the future, then it will become a serious challenge for regional peace, trade and security. India needs to limit China’s influence while maintaining a strategic, cultural and diplomatic balance with Bangladesh.