Mentors’ comment: The political crisis in Bangladesh escalated dramatically following Prime Minister Sheikh Hasina’s resignation amid widespread protests against a controversial government job quota system. The unrest has led to significant violence, particularly against Hindu minorities, with reports of targeted attacks and rising casualties. The military has since established an interim government, raising concerns over regional stability and India’s strategic interests. The crisis threatens to disrupt bilateral trade, which reached $13 billion in FY 2023-24, and could impact ongoing infrastructure projects vital for connectivity between India and Bangladesh.

Let’s learn!

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Why in the news?

Bangladesh is engulfed in chaos following Prime Minister Sheikh Hasina’s abrupt resignation amid escalating student protests over job quotas.

Why Hasina’s fall was not a surprise?

• Long-standing Discontent: Widespread protests against Sheikh Hasina’s government had been brewing over issues like a controversial quota system for government jobs, indicating significant public discontent.
• Authoritarian Drift: Hasina’s government has been accused of suppressing opposition and civil society through measures like the Digital Security Act, which has been used to arrest critics and journalists.
• Historical Context: Since gaining independence in 1971, Bangladesh has experienced several military coups, political assassinations, and periods of military rule, including the killing of Hasina’s father, Mujibur Rahman, in 1975.

Impact on India-Bangladesh relations: 

• Loss of a Trusted Ally
  • Hasina’s leadership enabled India to work closely with Bangladesh on security matters, countering terrorism and strengthening bilateral ties. Her resignation jeopardises India-Bangladesh’s relationship as political dynamics shift in Bangladesh.
• Disruption of Trade and Economic Ties
  • India-Bangladesh bilateral trade reached $13 billion in FY 2023-24, making Bangladesh India’s largest trade partner in South Asia. Hasina’s exit could disrupt these gains, affecting the movement of goods and people.
  • Discussions for a potential India-Bangladesh Free Trade Agreement (FTA) initiated in October 2023 aimed to boost trade. However, the future of these talks remains uncertain with the interim government in place.
  • India had a $9.2 billion trade surplus with Bangladesh in FY24. The ongoing unrest has already caused issues like internet disruptions affecting banking and issuing letters of credit, concerning exporters.
• Uncertainty over Infrastructure Projects
  • India has extended $8 billion in credit since 2016 for developing Bangladesh’s road, rail, shipping and port infrastructure. Projects like the Akhaura-Agartala rail link and Khulna-Mongla Port rail line, inaugurated in 2023, could face disruption.
  • A breakdown in ties could restrict India’s access to the Northeast, currently connected through narrow land corridors. 
  • Existing bus routes and port usage agreements also face potential risks.

Way forward: 

• Engagement with All Political Factions: India must proactively engage with a broader spectrum of Bangladeshi political parties, including the opposition parties like the Bangladesh National Party (BNP) and Jamaat-e-Islami (JI). 
• Strengthening Economic Ties and Infrastructure Projects: India should prioritize the continuity of trade and infrastructure projects established under Hasina’s government. This includes reaffirming commitments to the $8 billion credit extended for infrastructure development and ensuring that transit arrangements remain intact.