The Bay of Bengal has emerged as a focal point of China’s Belt and Road Initiative (BRI) in South Asia, with Memorandums of Understanding (MoUs) signed between China and littoral states like Bangladesh, Myanmar, and Sri Lanka driving infrastructure projects. Bangladesh’s 2016 MoU facilitated the $1.5 billion Karnaphuli Tunnel (inaugurated in 2023) and the 1,320 MW Payra Thermal Power Plant, both bolstered by BRI funding. Myanmar’s 2017 agreement with China prioritized the Kyaukpyu Deep-Sea Port and the China-Myanmar Economic Corridor, while Sri Lanka’s BRI engagements include the Hambantota Port and Colombo Port City. Complementing these, the Asian Infrastructure Investment Bank (AIIB), China-led but multilaterally governed, has funded non-BRI projects in the region, such as Bangladesh’s Padma Bridge Rail Link (co-financed with the World Bank) and Sri Lanka’s Strategic Cities Development Project in Kandy and Jaffna, aimed at urban infrastructure upgrades.
Japan and India’s Counterbalancing Investments
Parallel to China’s BRI, Japan and India have expanded their footprint in the Bay of Bengal through alternative funding mechanisms. Japan, via the Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) , is financing Bangladesh’s Matarbari Deep Sea Port , a $6.5 billion project rivalling China’s Sonadia Port proposal, and Sri Lanka’s Colombo Light Rail Transit System to ease urban congestion. India, meanwhile, has prioritized the Kaladan Multimodal Transit Project in Myanmar, linking Sittwe Port to Mizoram via river and road networks, aiming to bypass Bangladesh and enhance connectivity with Northeast India. India has also invested in upgrading Myanmar’s Sittwe Port and Nepal’s Bharatpur International Airport , while funding Sri Lanka’s Colombo International Container Terminal through public-private partnerships. These projects, though smaller in scale than BRI ventures, reflect Tokyo and New Delhi’s strategic efforts to counterbalance China’s influence.
Competing Visions and Geopolitical Strains
The overlap of the BRI with investments from AIIB, Japan, and India has heightened regional rivalries. China's lease of Hambantota Port and the development of Kyaukpyu Port, both linked to the BRI, have raised strategic encirclement concerns in India. Conversely, Japan's Matarbari Port and India's Kaladan Project present alternative visions for infrastructure-led growth, often aligning with the Quad's (U.S., India, Japan, Australia) Indo-Pacific strategy. Bangladesh's approach of accepting BRI loans while collaborating with JICA and India illustrates the region's complex diplomacy. Debt sustainability remains a common challenge, as seen in Sri Lanka's issues with Hambantota and Myanmar's stalled Kyaukpyu Port, highlighting the risks of large-scale projects. As the Bay of Bengal becomes a battleground for competing infrastructure agendas, South Asia's geopolitical landscape becomes increasingly fragmented, mixing economic potential with strategic mistrust.