New Delhi: The situation in India’s neighboring country, Bangladesh, has escalated dramatically following violent clashes over reservation issues. Angry mobs have stormed the Prime Minister’s residence, prompting the resignation of PM Sheikh Hasina, who has now fled the country. Simultaneously, Army Chief General Waqar-uz-Zaman has declared his intention to assume control of the nation. These developments are poised to strain India-Bangladesh relations significantly.
Trade and Security Implications
Bangladesh, a crucial trading partner for India, shares borders on three sides. The stability of Bangladesh is not only vital for bilateral trade but also for regional security. China, too, closely monitors the situation in Bangladesh. With its expansionist ambitions, China could exploit the unrest to encircle India. Moreover, the deteriorating security climate in Bangladesh may lead to an influx of illegal immigrants into India.
Economic Fallout
The ongoing crisis threatens economic ties between the two countries. Indian companies and investors have substantial stakes in Bangladesh, while China has also made significant investments in recent years. China’s ambitious Belt and Road Project aims to boost trade with Bangladesh, potentially at India’s expense. Experts warn that India may face substantial losses due to the burgeoning trade relationship between China and Bangladesh. However, the extent to which Bangladesh’s military rulers prioritize trade with India remains uncertain.
Trade Statistics
India and Bangladesh engage in trade worth several billion dollars annually. According to the United Nations COMTRADE database, India exported $11.25 billion to Bangladesh in 2023, $13.8 billion in 2022, and $14.1 billion in 2021.
In 2023, India’s exports to Bangladesh included mineral fuel, oil, and distillation products (approximately $2.19 billion). Other notable exports comprised cotton ($2.18 billion), residues and food industry waste for animal feed ($733.42 million), railways, tramways, and other vehicles ($593.97 million), and machinery, nuclear reactors, and boilers ($552.41 million).
Additionally, edible vegetables and certain roots and tubers were exported for $464.31 million, sugar and sugar confectionery for $391.60 million, organic chemicals for $369.71 million, and coffee, tea, mate, and spices for $293.73 million. Iron and steel exports totaled around $287.42 million.
