Why Bangladesh’s Future Runs Through India

Bangladesh’s foreign-policy debate has recently been dominated by its reported interest in the Mecca Pact and a proposed $2.3 billion deal to acquire around 20 Chinese J-10CE fighter jets. However, beneath the headlines, the practical relationship between Bangladesh and India continues to deepen, driven by trade, energy, healthcare, connectivity and investment.

India: A Market Bangladesh Cannot Afford to Ignore

Bangladesh is scheduled to graduate from the United Nations’ Least Developed Country category in November 2026. The transition is expected to gradually reduce the tariff advantages enjoyed by Bangladeshi exporters, potentially putting pressure on export earnings.

The garment industry, a major pillar of Bangladesh’s economy, will particularly need access to new markets. India, with its huge consumer base and geographical proximity, offers Dhaka an important opportunity.

Bangladesh-India bilateral trade is estimated at around .4 billion annually, although the balance remains heavily in India’s favour. Bangladesh exports only around .8 billion worth of goods to India, while its imports from India are several times higher.

To address this imbalance, Dhaka has shown interest in negotiations for a Comprehensive Economic Partnership Agreement (CEPA) aimed at increasing Bangladeshi exports to India and securing preferential market access.

India’s industry has also shown interest in cooperation with Bangladesh in emerging sectors such as semiconductors, green hydrogen, battery storage and data centres.

Energy Cooperation Strengthens the Relationship

Energy security is another major factor tying Bangladesh to India. With domestic gas supplies under pressure, Bangladesh has increasingly relied on Indian energy infrastructure.

Around 180,000 tonnes of diesel annually are supplied through the pipeline from India’s Numaligarh refinery. More than 1,000 MW of electricity from India is also supplied to Bangladesh’s national grid.

In 2025, Indian electricity reportedly accounted for roughly one-sixth of Bangladesh’s power supply, highlighting the importance of cross-border energy cooperation.

Since late 2024, Bangladesh has also been receiving hydropower from Nepal through Indian transmission lines. The arrangement represents an early example of the wider regional electricity market involving India, Nepal and Bangladesh.

Healthcare and Cross-Border Movement

People-to-people ties remain another important pillar of the relationship. Bangladesh restored full visa services for Indian citizens in February, covering tourist, medical, business and work travel.

India has traditionally been a major destination for Bangladeshi patients seeking medical treatment. The reopening of visa services therefore restored an important lifeline for patients, students, traders and families travelling across the border.

The Petrapole-Benapole land crossing remains one of the key points of movement between the two countries, while cargo traffic through Bangladeshi ports such as Chittagong and Mongla supports wider regional trade.

Strategic Friction Has Not Halted Cooperation

Bangladesh’s ties with India have faced political tensions, particularly over former Prime Minister Sheikh Hasina’s presence in India. Yet these differences have not completely stalled practical cooperation.

Both sides continue to discuss issues including water sharing, renewal of the 1996 Ganges Water Sharing Treaty, expanded trade and new investment.

Against this wider backdrop, Bangladesh’s interest in Chinese fighter aircraft or regional defence arrangements involving Pakistan and Saudi Arabia may attract significant attention, but such developments do not necessarily alter the country’s fundamental economic and geographic realities.

For Bangladesh, India remains its immediate large market, a major source of electricity and fuel, a crucial healthcare destination and an essential transit partner. These everyday economic and human connections suggest that, despite political and strategic differences, Bangladesh’s long-term economic future will remain closely connected with India.