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Bangladesh seeks careful balance between China and India

January 18, 2024

India and China are competing for influence in Bangladesh and Prime Minister Sheikh Hasina looks to maintain partnerships with the US and Europe while keeping new options on the table.

Wang Yi and Sheikh Hasina meet in Dhaka
Bangladeshi Prime Minister Sheikh Hasina meets with Chinese Foreign Minister Wang Yi in 2022Image: Xinhua/imago images

After Bangladesh's Sheikh Hasina's Awami League recently won a fourth consecutive term as prime minister, the country's partners in the West voiced concerns over democratic backsliding, while China and India rushed in to congratulate her. 

Both Asian powers have interests in forming partnerships with smaller countries to extend their spheres of influence. Experts caution that Bangladesh must carefully balance its interests with those of India and China.

Michael Kugelman, the South Asia director at the Wilson Center, said Bangladesh is successfully "reaping the benefits of great power competition" in its relationship with China and India.

"Its economic and defense ties with Beijing have grown significantly in recent years. We've gotten to the point where China is financing Bangladesh's first submarine base. This is another reflection of Dhaka's successes as a balancer," he told DW.

China makes inroads in Bangladesh

Last year, Bangladesh inaugurated a $1.2 billion (€1.1 billion) submarine base in Cox's Bazar named after Sheikh Hasina. The base was built with Chinese help and caused concern in India that the Chinese People's Liberation Army (PLA) was trying to covertly move into India's sphere of influence.

A 2023 US Department of Defense report also warned about China considering Bangladesh for PLA military logistics facilities.

According to the Chinese Foreign Ministry, the country's investment in Bangladesh now stands at about $1.5 billion. Bangladesh has also been part of China's global infrastructure-for-influence project, the Belt and Road Initiative (BRI), since 2016.

Bangladesh's former Foreign Secretary Md. Touhid Hossain told DW that a new China-funded project proposal on the Teesta River, which flows between India and Bangladesh, is likely to cause friction with New Delhi.

Bangladesh's government is considering a proposal from China to undertake dredging and embanking on significant sections of the river. The so-called Teesta River Comprehensive Management and Restoration Project is tagged at around $1 billion.

Teesta River at the border between India and Bangladesh
China is proposing a massive dregding project on the Teesta RiverImage: Prabhakar Mani Tewari

"A potential problem may arise if China pushes too far, particularly with any advancements in the Teesta project," said Hossain.

The Chinese proposal came after Bangladesh and India failed to sign a water-sharing treaty after almost a decade of negotiations. In 2011, a potential deal was postponed due to opposition from the Indian state of West Bengal.

India's Siliguri Corridor, often called the Chicken's Neck, is near the proposed project site. It is a geopolitically sensitive passage connecting northeastern Indian states to the rest of India through a narrow strip of Indian territory measuring 20-22 kilometers (12-14 miles) at its narrowest section.

India fears China might aim to establish its presence near the corridor under the guise of development work with Bangladesh.

"These developments might have implications both domestically and in the broader context of regional geopolitics," Hossain said.

Can Bangladesh afford to turn away from the West?

Bangladesh's election on January 7 was criticized in the West over concerns of democratic backsliding following a crackdown on the opposition Bangladesh Nationalist Party (BNP), which ended up boycotting the polls.

Following the announcement of Hasina's win, the United States said it would not recognize the Bangladeshi election as "free and fair." 

After the election on January 9, Hasina gave a speech to her Awami League party workers accusing the BNP of working on behalf of unnamed "foreign masters."

Bangladesh: Democracy faces uncertain future after election

Bangladesh is scheduled to graduate from the UN's list of Least Developed Countries (LDCs) in 2026. After this transition, it will have three years before the current duty and quota-free export privileges it enjoys within the European market are dropped.

Former Chief Economist of the World Bank in Bangladesh Zahid Hussain told DW that Bangladesh can pursue other options to retain economic advantages with Western countries.

"The benefits we get for being on the LDCs list can also be reinstated by taking an alternative approach," he said. "For instance, if Bangladesh enters into a free-trade agreement or an economic alliance, it can easily access the markets of those alliances."

Bangladesh's new foreign minister, Hasan Mahmud, is known for his positive relations with European countries.

The EU's ambassador to Bangladesh, Charles Whiteley, after meeting with the new foreign minister on Wednesday, commended Mahmud's "strong connection" with the EU and his "deep understanding" of Europe.

Whiteley told reporters that the relationship between Bangladesh and the EU will be driven by a new Partnership and Cooperation Agreement (PCA). This legally binding agreement, he said, will be negotiated soon and will be "much more political in nature than the existing agreement."

Analyst Kugelman said he believes Bangladesh won't be forced to choose a side and will able to balance between the superpowers quite well.

"This is a country that, much like India, has showed a strong capacity to balance rivalries instead of succumb to them," he said.

"Sheikh Hasina has been especially adept at balancing relations with developed and developing worlds, with India and China, with West and non-West, and so on," he added.

Edited by: Wesley Rahn