The sudden exit of Bangladesh’s Prime Minister Sheikh Hasina from the country in the wake of mass student protests is threatening to become one of India’s worst foreign policy headaches that is likely to test all of its capability to resolve.
After having fled the country, Hasina landed in India’s Hindon Air Base on the outskirts of the capital New Delhi, where she is likely to be based temporarily before heading to a European destination, according to local media reports.
India’s Foreign Minister S Jaishankar told the country’s upper house of parliament on Tuesday that Hasina had “at very short notice … requested approval to come for the moment to India” after she resigned the day before.
The minister said the government was in touch with authorities to ensure the safety of the 19,000-strong Indian community in Bangladesh, out of whom 9,000 are students.
“The bulk of the students have already returned to India in the month of July on the advice of the High Commission,” Jaishankar said, adding that border forces had also been instructed to be “exceptionally alert in view of this complex situation”.
Throughout her 15-year rule, Hasina had maintained strong ties with Delhi that had blossomed into Bangladesh emerging as one of India’s top export destinations for a variety of goods and services – from cotton yarn to make garments to information technology.
The booming trade with Dhaka was also promising to become an anchor in boosting moribund trade within the Bay of Bengal region that sits at the nexus of strategic trade routes positioned between the Indian and Pacific Oceans.
“We will have to wait and watch how things happen. The government of India had invested a lot in Hasina’s government and virtually given her everything that she wanted,” said Biswajit Dhar, professor at the Delhi-based research institute Council for Social Development.
Over the course of a decade, Bangladesh’s economic rise had propelled it almost to the rank of an “Asian Tiger” though growth had tapered in the last 1½ years and Dhaka had started drawing substantial foreign investments.
Bangladesh is India’s largest trade partner in South Asia, and India is the second-largest trading partner for Bangladesh in Asia after China.
According to a report in India’s leading business daily The Economic Times, Indian exports to Bangladesh fell to US$11 billion in 2023-24 from US$12.21 billion in 2022-23, while imports decreased to US$1.84 billion from US$2 billion in the same period.
Bangladesh’s primary exports to India are garments, accounting for over half of shipments.
Delhi has gone out of its way to court Bangladesh, agreeing to even concede a larger share of water flow to the Teesta river in 2011 – a deal that was scuppered at the last minute because of objections raised by India’s West Bengal state.
Despite the setback, Hasina also reciprocated Delhi’s gestures and, as recently as last month, chose India over China for a US$1 billion Teesta River development project despite little forward movement on the issue of sharing of waters.
“There is now no certainty on when the next stable government will take over in Bangladesh and whether it will continue the policies consistently,” Dhar said.
On Wednesday, Bangladesh’s presidency announced that Nobel-winning microfinance pioneer Muhammad Yunus had been tapped to lead an interim government after a meeting with military leaders and the heads of the Students Against Discrimination group.
Hasina, 76, had been in power since 2009 but was accused of rigging elections in January. The interim government is expected to hold fresh elections soon, as Yunus is seen as largely a figurehead who has assumed charge of governance temporarily.
The ripples of the political unrest are likely to be felt across the South Asian region because Bangladesh’s trade ties with India were emerging as an anchor for building up a regional subgroup centred on trade from the Bay of Bengal region.
Last year, Bangladesh cleared the use of Chittagong and Mongla Ports by India for transit and transshipment of cargo, potentially slashing logistics time and costs from India’s landlocked and resources-rich northeast that was planned to be extended to Southeast Asia through development of highways, coastal shipping and even air services.
India’s trade ties with Bangladesh also serve as a cornerstone for a planned free trade area connecting Myanmar, Thailand, Bangladesh, Bhutan, India, Nepal and Sri Lanka who are members of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) headquartered out of Dhaka.
Leaders of the seven nations are due to meet next month in Thailand to solidify the cooperation.
“Going forward, whatever this grouping can contribute will depend on the political situation in Bangladesh. Everything around it could be seriously impaired,” Dhar said.
Delhi’s ties with Hasina’s government were important not only because of trade. She had successfully kept at bay radical militant groups who wanted to target India, analysts say, pointing out all that is up in the air with Hasina’s departure.
The potential of trade ties blossoming in the region is now being replaced by Indian anxiety over whether militants and extremist groups could take advantage of the political flux to set up bases that could endanger the region’s stability, analysts say.
“Sister states in India’s northeast have been at relative peace because of Hasina’s cooperation with India. She’s been tough on radical Islamism and Pakistan’s ISI networks in Bangladesh,” said Chris Blackburn, a British political and security analyst.
Bangladesh together with strife-torn Myanmar is threatening to compound headaches for Delhi on India’s eastern flank, he added.
India shares a long and porous border with Bangladesh that has been a conduit for gold smuggling and illicit weapons. If the unrest continues, a wave of illegal immigrants is also likely – a problem that has eased in recent years because of more economic prosperity.
But Bangladesh’s economy has been battling persistently high inflation of close to 10 per cent in recent months, with workers earning some of the lowest wages in the world.
The lack of political stability following Hasina’s departure can compound Bangladesh’s economic woes that could disturb the South Asia region, analysts say.
“When you have a partner like Sheikh Hasina suddenly leaving, it does give a shock to the system. Bangladesh is neither politically stable, nor is an economic turnaround … likely to happen quickly,” said Harsh Pant, a professor of international relations at King’s College in London, adding that the challenges for India would be high.
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‘Our country has been liberated’: Bangladeshis celebrate as prime minister resigns and flees
‘Our country has been liberated’: Bangladeshis celebrate as prime minister resigns and flees
Will unrest encourage militancy?
The political vacuum in Bangladesh could leave the space open for the Bangladesh Nationalist Party and its ally Jamaat-e-Islami who have been inimical to India, analysts say.
The army was expected to maintain law and order in the interim period of a caretaker government, but it “will be interesting to see whether other political forces including those on the far-right make a comeback”, said Priyajit Debsarkar, an independent geopolitical analyst who has written extensively on Bangladesh.
“It is going to be a jigsaw of multiple stakeholders who can potentially stake claim to form the government,” he said.
Earlier this week, India’s Bharatiya Janata Party-led ruling coalition held an all-party meeting including opposition leader Rahul Gandhi to discuss the situation in Bangladesh.
Though Delhi’s task appears cut out in rebuilding ties with Bangladesh, analysts are cautiously optimistic that India’s geographical proximity will mean that even a new regime will be amicable to maintaining relations out of economic interest.
Sreeradha Datta, an international-affairs professor at Jindal Global University in Haryana, said observers needed to recognise that the Bangladesh situation “is a completely youth-led movement and largely apolitical”.
“No political party has been able to drive it,” she said, adding that too much should not be read into isolated acts of violence against minority Hindus in Bangladesh because it was a “typical thing” that happened during a significant event.
“I am hoping that the interim government will adeptly handle all of that. Every political party [in Bangladesh] knows that working with India is very useful. If you see good will happen, why would you want to deprive your people of that?” she said.
