Bangladesh’s recent political upheaval has had significant ripple effects on India, especially given the close geographic and economic ties between the two countries. Bangladesh riots have not only created a humanitarian crisis but also affected border security and trade. With increased tensions, there’s concern about the potential spillover of violence and instability into India, particularly in border areas. Additionally, the unrest has implications for regional cooperation and economic partnerships. Understanding how these disturbances impact India helps in assessing the broader implications for regional stability and bilateral relations.
Tags: GS-2,IR- India and its Neighbourhood– Bilateral Groupings & Agreements
For Prelims: India-Bangladesh Relations, Bangladesh Liberation War 1971,Akhaura-Agartala rail link
For Mains: India-Bangladesh Relations, Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Context:
- The resignation of Sheikh Hasina as Prime Minister of Bangladesh marks a significant turning point in South Asian geopolitics.
- As she fled the country amid protests and sought refuge in India, the stability of Bangladesh and its relationship with India have come into question.
- This upheaval could have far-reaching consequences not only for the region but also for India’s national security.
What is the Current Situation in Bangladesh?
- Protests and Unrest
- Major Protests: Bangladesh has been engulfed in protests over job quota issues, fueled by authoritarian policies and suppression of opposition.
- Unprecedented Unrest: The scale of unrest is the largest seen since Sheikh Hasina’s tenure began in 2008.
- Economic Challenges
- Economic Concerns: Sheikh Hasina’s departure raises concerns about the country’s economic recovery from the Covid-19 pandemic.
- Financial Strain: Rising inflation and currency depreciation have further strained the economic recovery.
- Political Landscape
- Interim Government: The Bangladesh Army is set to form an interim government, highlighting the fluidity of the situation.
- Threat to Secular Governance: The potential return of radical Islamist forces could threaten Bangladesh’s secular governance.
- Disruption in Export Flow
- Textile Sector Impact: Bangladesh’s textile sector, which significantly contributes to its export revenue, is facing major disruptions.
- Supply Chain Breakdown: The ongoing unrest has led to a breakdown in supply chains, affecting the movement of consignments and production schedules.
- Bangladesh’s Textile Sector
- Global Player: Bangladesh accounts for 7.9% of global trade in clothing.
- Garment Sector: The USD 45 billion garment sector employs over four million workers and represents more than 85% of Bangladesh’s merchandise exports.
- Market Share: Bangladesh has a significant market share in the European Union, the UK, and the US, with a 10% share in the US market.
- Supply Reassessment: International buyers are reassessing their supply sources due to the uncertainty in Bangladesh, potentially shifting orders to alternative markets, including India.
- Impact on India
- Economic Opportunity: India stands to gain substantially if it captures a portion of the displaced orders from Bangladesh.
- Potential Gains: Industry experts estimate that India could see an additional USD 300-400 million in monthly business if 10-11% of Bangladesh’s textile exports are redirected to Indian hubs such as Tiruppur.
How Does the Political Instability in Bangladesh Affect India?
- Loss of a Trusted Ally
- Loss of Key Partner: India has lost a key partner in Sheikh Hasina, who was instrumental in countering terrorism and strengthening bilateral relations.
- Security Concerns: Hasina’s leadership enabled India to work closely with Bangladesh on security matters, a relationship now in jeopardy as political dynamics shift.
- Trade Relations:
- India-Bangladesh bilateral trade reached USD 13 billion in FY 2023–24, making Bangladesh India’s largest trade partner in the subcontinent.
- Duty-free access was provided on most tariff lines under the South Asian Free Trade Area (SAFTA) agreement under Hasina’s administration.
- Liability Issues: India’s support for her administration has now become a liability as her unpopularity and controversial governance might impact India’s regional standing.
- Western Scrutiny and Potential Backlash
- International Friction: India’s backing of Hasina has created friction with Western allies, specifically the US, which has criticised her undemocratic practices.
- Diplomatic Challenges: Balancing international relations while supporting a now-unpopular leader poses challenges for India.
- Public Backlash: With Hasina’s unpopularity growing, India may face backlash from Bangladeshi citizens who view India as an ally of the ousted leader, potentially straining India-Bangladesh relations.
Significance of Bangladesh for India
- Trade and Transportation Corridor: Bangladesh acts as an important corridor for trade and transportation, linking India’s Northeast with the rest of the country and facilitating access to international markets.
- Regional Security: A stable and friendly Bangladesh is essential for regional security. Cooperation on counter-terrorism, border security, and other security matters is crucial for maintaining peace in South Asia.
- Major Trade Partner: Bangladesh is India’s biggest trade partner in South Asia and India is the second largest trade partner of Bangladesh in Asia.
- Economic Support: The economic relationship supports India’s goals under its foreign trade policy and contributes to its aim of becoming a USD 5 trillion economy.
- Regional Collaboration: Active collaboration between India and Bangladesh is crucial for the success of regional forums like BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) and SAARC (South Asian Association for Regional Cooperation).
What Challenges Lie Ahead for India in Engaging with a New Regime?
- Uncertain Political Environment
- New Government Dynamics: The nature of the new government, whether led by opposition parties or the military, will significantly impact India’s strategic interests.
- Security Threats: A new administration that is less friendly to India could re-energize anti-India militant groups, adding pressure to an already tense security situation along the borders.
- Minority Risks: The Hindu minority may face increased risks if Islamist extremism rises. India must navigate citizenship promises for Hindu refugees carefully to avoid regional tensions.
- Regional Geopolitics
- Chinese Influence: The political instability in Bangladesh could provide an opportunity for China to expand its influence in the region.
- Strategic Vigilance: India must be vigilant as Beijing might offer lucrative deals to the new regime, similar to how it has leveraged regime changes in Sri Lanka and the Maldives.
- Strategic Partnerships: India will need to engage in strategic partnerships to ensure that extremist elements do not gain a foothold and that Bangladesh’s economic stability is supported.
- Multiple Fronts Challenge: The turmoil in Bangladesh comes at a time when India faces challenges on multiple fronts, including tensions with Pakistan, instability in Myanmar, strained relations with Nepal, Taliban’s seizure of power in Afghanistan, and the Maldives.
- Impact on Indian Investments
- Business Uncertainties: Indian businesses and investments in Bangladesh might face uncertainties due to the political upheaval.
- Trade Disruptions: Disruptions in trade and payment delays could impact the profitability and stability of these investments.
- Textile Industry Impact: Around 25% of textile units in Bangladesh are owned by Indian companies. These units may shift their operations back to India due to the current instability.
- FTA Negotiations:
- As discussions around a potential free trade agreement (FTA) began in October 2023, hopes soared that it could boost Bangladesh’s exports to India by up to 297% and India’s exports by 172%.
- Infrastructure and Connectivity Concerns
- Crucial Connections: India has provided USD 8 billion in credit since 2016 for road, rail, and port projects, including the Akhaura-Agartala rail link and the Khulna-Mongla Port rail line.
- Threat to Agreements: Current unrest threatens these crucial connections, potentially disrupting trade and access to India’s Northeast region, and jeopardising earlier agreements.
- Balancing Act
- Diplomatic Strategy: India must strike a balance between supporting democratic forces and managing relationships with regional powers.
- Avoiding Internal Disputes: The challenge will be to avoid getting entangled in internal disputes while maintaining a robust diplomatic presence in Bangladesh.
How Should India Approach Its Foreign Policy Moving Forward?
- Building New Alliances
- Cautious Monitoring: India is maintaining a cautious approach, closely monitoring the situation in Bangladesh while adopting a “wait-and-watch” strategy.
- Engaging Various Factions: India should engage with various political factions in Bangladesh to foster a more inclusive relationship.
- Broadening Engagement: Engaging with a broader spectrum of Bangladeshi society will be crucial to counteract any negative perceptions of India. Moving beyond the 1971 liberation narrative is necessary.
- Enhancing Security Measures
- Border Security: India should bolster its security measures along the border and in areas with significant bangladeshi expatriate populations to address potential spillover effects and maintain stability.
- Digital Connectivity Corridor
- Trade and Technological Exchange: Developing a digital connectivity corridor can enhance trade, technological exchange, and e-commerce.
- FTA Evaluation: Evaluate the feasibility of an FTA with Bangladesh in light of the new political climate.
- Geopolitical Manoeuvring
- Anticipating Exploitation: India must anticipate that Pakistan and China will seek to exploit the situation in Bangladesh to their advantage.
- International Collaboration: Collaborating with international partners, including the US, UK, and European nations, will be key to mitigating these risks.
- Gulf Cooperation: India should work with Gulf partners like the UAE and Saudi Arabia to support Bangladesh’s economic stabilisation and counter extremist influences.
UPSC Civil Services Examination, Previous Year Question (PYQ)
Mains:
Q:1 Analyze internal security threats and transborder crimes along Myanmar, Bangladesh and Pakistan borders including Line of Control (LoC). Also discuss the role played by various security forces in this regard. (2018)
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