India-Bangladesh Relations: A History of Highs and Lows
Agartala | Northeast Press | July 5, 2025: India-Bangladesh relations have long been shaped by a mix of cooperation, mistrust, and evolving regional interests. But is India truly the “bad neighbour,” or is there more to the story?
The perception of India as a domineering neighbor has long prevailed in certain political and intellectual circles in Bangladesh. Over the years, New Delhi has been accused of economic exploitation, biased trade practices, and asymmetrical agreements. But a closer look at the evolving India-Bangladesh relationship, especially in trade, connectivity, and power cooperation, reveals a far more nuanced picture—one where Bangladesh has often benefited from India’s accommodative policies.
Trade Tensions: Context and Reality
Recent trade restrictions between the two nations have reignited debates. After Dhaka restricted Indian yarn imports via select ports, India responded with similar limitations on key Bangladeshi exports like jute and garments. While this tit-for-tat exchange appears retaliatory, it must be seen in a broader context. For over a decade, India allowed growing imports from Bangladesh—particularly in the textile and jute sectors—even though these sectors are vital and labor-intensive for India’s own economy.
During Prime Minister Sheikh Hasina’s tenure, Bangladesh’s exports to India surged to nearly $2 billion annually, thanks to Indian tariff relaxations and trade access. On the other hand, Bangladesh maintained high tariffs, limiting Indian exports. This clear trade imbalance was long overlooked by India in the interest of fostering regional economic integration.
India’s recent shift to non-tariff measures, therefore, reflects not hostility but an overdue recalibration to protect domestic interests.
Power Sector Cooperation: A Model of Regional Generosity
India’s power cooperation with Bangladesh further highlights New Delhi’s willingness to support its neighbor. At present, Bangladesh imports around 2,700 MW of electricity from India, sourced through a mix of regulated tariffs and market-driven models. A significant share—1,600 MW—comes from Adani Power’s Jharkhand-based plant, built exclusively to supply Bangladesh.
The deal, while controversial in Bangladeshi media, is often misunderstood. Initially, the power tariff was higher because Indian law at the time disallowed domestic coal usage for export projects, forcing reliance on expensive imported fuel. Moreover, Adani Power invested in exclusive transmission infrastructure. Despite criticisms, even the interim government under Dr. Muhammad Yunus, which promised a review, backed off—admitting that the tariff remained lower than Bangladesh’s domestic generation costs.
India has now lifted the coal export restriction, potentially lowering power costs in future exports. Additionally, Bangladesh benefits from Nepalese hydropower—transmitted via Indian territory—at minimal transmission charges, again reflecting India’s goodwill in enabling cross-border energy trade.
Diplomatic Strains Amid Changing Political Signals
The broader diplomatic tone, however, has shifted. Since the recent change of government in Dhaka, Indian officials have noted rising anti-India rhetoric. From accusations about flood mismanagement to social media campaigns calling for boycotts of Indian goods, the bilateral narrative has grown more strained.
Further concerns have emerged over Dhaka’s growing partnerships with Chinese firms, especially in sensitive infrastructure areas. While India has traditionally maintained diplomatic patience across different Bangladeshi regimes, it maintains a firm stance on national security issues, especially related to the Northeast region.
Water Sharing and the 2026 Ganga Treaty Renewal
A pivotal test of India-Bangladesh relations lies ahead in 2026 with the upcoming renewal of the Ganga Water Treaty. Bangladesh has often treated this treaty—and the long-stalled Teesta agreement—as entitlements. But in reality, India is under no international legal obligation to share river waters. Still, India remains the only Asian nation to have formal water-sharing treaties with its neighbors—Pakistan (Indus Waters Treaty) and Bangladesh (Ganga Treaty, 1996).
The Ganga agreement, signed during Hasina’s early term, committed India to share an average of 34,060 cusecs of Ganga water during the dry season—a generous offer made despite climate uncertainties and upstream interventions by Nepal or China. As strategic expert Brahma Chellaney once observed, no other country in the region matches India’s approach to hydro-diplomacy.
Yet, future treaties may look different, with experts suggesting that water shortages—not just surpluses—should also be equitably distributed, especially in an era of climate disruption.
A Complex Relationship, Not a One-Sided One
So, is India truly the regional bully it’s often portrayed to be? The evidence suggests otherwise. India has consistently extended preferential treatment, market access, and critical infrastructure support to Bangladesh—sometimes even at the expense of its own industries and domestic politics.
The emerging question is not about historical grievances, but about how Dhaka chooses to engage with New Delhi going forward. Despite the rising of Radical Islamist Influence in Bangladesh, India maintained Reciprocity, mutual respect, and strategic foresight to this important bilateral relationship, especially as both countries navigate the uncertain waters of geopolitics, climate change, and regional power shifts. This is also important because of
