Bangladesh’s interim government, led by Nobel laureate Muhammad Yunus, has accelerated a dramatic foreign policy shift toward China and Pakistan following the ouster of pro-India Prime Minister Sheikh Hasina in August 2024. The move, triggered by India’s refusal to extradite Hasina—who faces trial for crimes against humanity, has plunged bilateral ties to historic lows. Yunus’s first state visit to Beijing secured $2.1 billion in Chinese investments, including modernization of the strategic Mongla Port and Teesta River management, a project India long sought to control. Dhaka’s explicit backing of Beijing’s "One China" policy further signals alignment.
India has retaliated with sweeping trade restrictions, targeting Bangladesh’s vital jute, garment, and plastic exports. New Delhi’s actions stem from fears that Bangladesh’s warming ties with Pakistan, including new direct shipping routes and flights and China’s involvement near India’s vulnerable "Chicken’s Neck" corridor threaten their security. Former Bangladeshi envoy Md Humayun Kabir acknowledged cooperation persists but lamented, "the warmth is gone".
In a historic reconciliation, Bangladesh and Pakistan have accelerated economic and diplomatic normalization despite their 1971 independence war legacy. Joint initiatives brokered by China in June 2025 cover trade, education, and agriculture. Notably, Bangladesh now routes medical tourism through Chinese hospitals after India restricted access, a symbolic rupture in a sector once dominated by Indian facilities.
With elections slated for April 2026, major parties vie for external backing, including the Bangladesh Nationalist Party (BNP), polling frontrunner, praises China’s "sincerity and love" and seeks expanded ties. The student-led National Citizen’s Party (NCP) aligns with Yunus’s reform-first agenda, advocating delayed polls to purge Hasina-era corruption . Islamist Jamaat-e-Islami, newly unbanned, leverages Chinese engagement to re-enter politics. India signals it may undermine Yunus’s unelected government unless polls produce a "friendly" regime.
Amid Trump’s global tariffs, Bangladesh proposes buying Boeing jets and U.S. agricultural goods to balance trade. Though Yunus assured Secretary of State Marco Rubio of strengthened ties, analysts note Dhaka’s tilt toward Beijing risks triggering U.S. penalties. Meanwhile, Bangladesh’s $45 billion garment industry faces existential threats if Trump imposes threatened 37% tariffs post-2026.
The Crisis Group warns Bangladesh’s realignment could escalate into proxy conflict, citing India’s military buildup near the Chinese-backed Teesta project. As Yunus frames Bangladesh as China’s "economic extension," New Delhi fears encirclement. With Pakistan bolstering Dhaka and Hasina agitating from exile, the region’s fragile stability hangs in balance.