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India-Bangladesh ties at crossroads amid trade friction and political transition

Indian Express·2026-08-11· Read original

"India-Bangladesh ties at crossroads amid trade friction and political transition"

Prelims Facts

  • •India-Bangladesh share the longest land border between any two countries in South Asia: 4,156 km
  • •The Land Boundary Agreement (LBA), 2015 exchanged 162 enclaves, resolving a dispute dating back 68 years to Partition
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Key Terms

Non-Tariff Measures (NTMs)

regulatory barriers (port restrictions, certification rules, anti-dumping duties) that raise trade costs without explicit tariffs

LDC Graduation

process by which a Least Developed Country loses UN-designated status and associated preferential market access in third-country markets

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Study Note

BackgroundCore Concept

Background

India and Bangladesh share one of South Asia's most consequential bilateral relationships, rooted in the 1971 Liberation War in which India provided decisive military and diplomatic support for Bangladesh's independence. This foundational solidarity created what was long described as a sonali adhyay (golden chapter) in bilateral ties. Over the decades, the relationship was institutionalised through a series of landmark agreements: the Land Boundary Agreement (LBA) of 2015 resolved a 68-year-old enclave dispute by exchanging 162 enclaves, and transit arrangements granted India access to its landlocked northeastern states through Bangladeshi territory. The two countries share 54 rivers, and the unresolved Teesta Water-Sharing Treaty — blocked by West Bengal's objections — remains a persistent irritant. India's Neighbourhood First Policy and its Act East orientation both assign Bangladesh a pivotal role: as a gateway to Southeast Asia and as a test case for whether India can sustain deep, mutually beneficial ties with smaller neighbours.

The political architecture of this relationship was significantly shaped by the Awami League's long tenure. The party's ideological alignment with India's role in 1971 created a degree of strategic comfort that facilitated cooperation on connectivity, energy, and security. However, this also meant that the relationship became, to a degree, personality- and party-dependent rather than institutionally anchored — a structural vulnerability that the 2024 political transition has now exposed.

The Topic Explained

The economic sinews of the India-Bangladesh relationship are substantial. Bangladesh is one of India's principal trade partners in South Asia, and the relationship encompasses goods trade, energy flows, and cross-border infrastructure. On the energy front, India exports electricity to Bangladesh, the Maitree Super Thermal Power Plant (a joint venture) and the India-Bangladesh Friendship Pipeline represent institutionalised cross-border energy infrastructure. These are not merely bilateral assets — they constitute regional public goods that create mutual dependence and raise the cost of political disruption.

However, the trade relationship has been increasingly strained by non-tariff measures (NTMs). These include sudden land-port restrictions, withdrawal of transshipment privileges, anti-dumping duties, and stringent testing or certification requirements. NTMs are particularly damaging because they raise transaction costs without the transparency of tariff schedules, making them harder to negotiate away through standard trade diplomacy. …

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Practice MCQs

IRmedium

With reference to India-Bangladesh economic relations, consider the following statements:

1.The Maitree Super Thermal Power Plant is a joint India-Bangladesh energy project.

2.The India-Bangladesh Friendship Pipeline facilitates cross-border petroleum trade.

3.India and Bangladesh share 54 transboundary rivers.

Which of the statements given above is/are correct?

A1 and 2 only
B2 and 3 only
C1 and 3 only
D1, 2 and 3
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IRmedium

Which of the following best describes 'Non-Tariff Measures (NTMs)' in the context of India-Bangladesh trade relations?

ACustoms duties imposed on goods crossing the land border between India and Bangladesh
BRegulatory barriers such as land-port restrictions, anti-dumping duties, and certification requirements that raise trade costs without explicit tariffs
CBilateral quotas agreed upon under the SAFTA framework limiting the volume of goods traded
DPreferential tariff concessions extended to Bangladesh under India's Neighbourhood First Policy
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IRmedium

Consider the following statements about the Land Boundary Agreement (LBA) between India and Bangladesh:

1.It was signed in 2015 and resolved a dispute dating back to the Partition of 1947.

2.It involved the exchange of 162 enclaves between the two countries.

3.It also resolved the Teesta River water-sharing dispute.

Which of the statements given above is/are correct?

A1 and 2 only
B2 and 3 only
C1 only
D1, 2 and 3
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IRhard

Bangladesh's forthcoming graduation from Least Developed Country (LDC) status is most directly significant for its bilateral trade relationship with India because:

AIt will make Bangladesh eligible for full membership of the World Trade Organization for the first time
BIt will erode Bangladesh's preferential market access to major external markets, increasing the strategic value of a comprehensive bilateral trade agreement with India
CIt will automatically trigger a revision of the SAFTA tariff schedule applicable to Bangladesh
DIt will require Bangladesh to adopt India's standards and certification frameworks as a condition of continued trade
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