Untraditional SecurityJUNE 15, 2026

NAVIGATING NEW ORDER IN BANGLADESH: THE NEIGHBOURHOOD DILEMMA

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The geopolitical landscape of South Asia experienced a structural change post the “Monsoon Revolution” of August 2024, which ended the fifteen-year rule of Prime Minister Sheikh Hasina. An interim government, led by Nobel laureate Muhammad Yunus, was formed, for transition. The elections of February 2026 concluded the rule of interim government and established a new political power in Bangladesh. This transition was characterised by a multi-vector foreign policy that tilts significantly toward China and Pakistan while navigating intense western counterbalancing. The newly elected government led by Prime Minister Tarique Rahman of the Bangladesh Nationalist Party (BNP) is actively revisiting Bangladesh’s external alignments. This realignment efforts are likely to have critical impact on the security framework of the Indian subcontinent and implications for India’s “Neighbourhood First” policy & strategic Bay of Bengal.

Political Transition and Constitutional Reforms: Post-August 2024

The student protest led to regime change and fall of Sheikh Hasina on 05 August 2024. The ibid development led to deterioration of Indo-Bangladesh ties and one of the primary reasons was India’s long reliance on Awami League. The interim government (August 2024 to February 2026) pursued to systematically reduce Bangladesh’s economic and political dependence on India. During this transition, public sentiment in Bangladesh grew increasingly sceptical of Indian influence.

This transitional paved the way for the thirteenth general elections held on 12 February 2026. On 17 February 2026, a new elected government led by Prime Minister Tarique Rahman of the Bangladesh Nationalist Party (BNP) assumed the office. This transition occurred alongside a successful national referendum “July Charter”, aimed for constitutional and administrative reforms. The restructuring introduced systemic changes to the state, transitioning from a first-past-the-post electoral model to proportional representation, establishing term limits for the prime ministe and introducing a bicameral legislature. The representation of religious minorities was decreased leaving them vulnerable to communal hostility and political vengeance, which is a key concern for India. To manage the Sino-Indian optical sensitivities, Rahman scheduled his first official foreign visit to Malaysia from 21-22 June 2026. However, under this overt diplomatic balance, the covert strategy of Bangladesh is to realign its core strategic dependencies. The transition, July Charter and impacts can be as tabulated below: –

Reform Vector	Specifics	Implications
Outcome of General Election	BNP – 209 seats, Jamaat-e-Islami Bangladesh (JeIB) – 68 seats, NCP – 06 seats (total 300 seats)	Re-establishes Islamist coalition
July Charter Referendum	More than 70% votes required for constitutional, administrative and electoral reforms	Reduces power concentration and state restructuring
Constitutional Restructuring	Proportional representation, term limitation for the prime ministerial and bicameral legislature	Institutionalizes coalition politics.
Religious Minority Status	Down to 8% & only 4 minority MPs elected	Escalates internal communal pressure

China: Multi-Vector Activities in Bangladesh:

China responded to the transition in Bangladesh with quick diplomatic and economic outreach to consolidate its influence, while western powers and India adopted cautious postures. The ibid outreach spans in the domains of diplomacy, economy, hydrology and military.

Diplomatic Measures – China greeted the formation of interim government in August 2024, reiterating its policy of non-interference in internal affairs but steadily built parallel diplomatic channels. This was demonstrated by September 2024 meeting between Yao Wen, Chinese Ambassador and Shafiqur Rahman, Ameer of JeIB. Notably, this was first visit of any foreign diplomat to JeIB headquarters, since 2010. The 50th anniversary (2025) of diplomatic ties between China and Bangladesh, provided as a major platform for public diplomacy. The same was celebrated by designating as the “Year of People-to-People Exchange”. In March 2025, the visit of Muhammad Yunus to China and meeting with President Xi Jinping resulted in signing of nine economic and technical agreements. These diplomatic ties were strengthened with May 2026 visit of Khalilur Rahman, Foreign Minister of Bangladesh. During the visit, China reaffirmed its commitment to align the Belt and Road Initiative (BRI) with national development strategies of Bangladesh and Bangladesh in turn reiterated its adherence to the One-China principle and opposition to independence of Taiwan.

Economic Cooperation:

China is primary import partner of Bangladesh, with bilateral trade favourable to China. It extended its duty-free, quota-free market access for 99 percent of goods from Bangladesh,till 2028, a gesture to support economic turmoil during transition. Remarkably for China, since 1975, Bangladesh is the fourth-largest lender(loan of approximately $7.5 bllion),which helped China to leverage over Bangladesh’s infrastructure. During the march 2025, multiple economic initiatives were formalized which including the launch of the Chinese Industrial Economic Zone in Chattogram. The major economic initiatives are tabulated below:-

Agreement / Initiative	Agenda	Geopolitical Implication
Economic & Technical	Cooperation agreements and eight MoUs	Change in traditional India-centric development models
Chattogram Industrial Zone	$1 billion committed by 30 Chinese firms, $350 million direct investment in the zone	Strengthened Chinese Economic footprints in southeastern Bangladesh
Mongla Port Modernization	Commercial agreement – $400 million loan by China	Counter Indian access
Healthcare Aid	Initiated $150 million technical assistance, robot physiotherapy centre cardiac vehicle	Reduces dependence on Indian medical tourism
Least Developed Country (LDC) Tariff Extension	Zero-tariff market access extended until 2028	Support economic impact of scheduled upgradation

Defence Arrangements:

China has been largest arms supplier for Bangladesh, accounting for approximately 72% of Bangladesh military imports (between 2019 and 2023). During the transition and new regime, the Sino-Bangladesh defence cooperation has expanded to institutional integration, joint production and technology transfer. Notable defence agreements are as given below: –

Agreement for Drone Manufacturing Plant – On 27 January 2026, the Bangladesh Air Force signed a Government to Government (G2G) agreement with China Electronics Technology Group Corporation International (CETC) to establish a advanced Unmanned Aerial Vehicle (UAV) manufacturing and assembly plant in Bangladesh. The deal includes comprehensive technology transfer, allowing Bangladesh to initially assemble Medium Altitude Low Endurance (MALE) and Vertical Take-Off and Landing (VTOL) UAVs, with the long-term goal of designing and manufacturing indigenous drones.

Renaming Submarine Base Bangladesh Naval Ship (BNS) Sheikh Hasina to BNS Pekua – The construction of submarine base at Pekua was result of $1.21 billion contract with Chinese company Poly Technologies Inc, with work commenced in September 2019. The base is 130 X 30 meter drydock, designed to berth six submarines (including two Chinese-built Type 035G Ming-class submarines BNS Nabajatra and BNS Joyjatra) and eight warships simultaneously. In March 2025, the base was officially renamed from BNS Sheikh Hasina to BNS Pekua. The major aspect of the base is the engineered capabilities of the drydock to support maintenance for visiting Chinese naval vessels.

J-10CE Fighter Jet Deal – Bangladesh, with an aim to modernise its Air Force, is acquiring 20 J-10CE multirole fighters from China for $2.2 billion (structured payments concluding in the 2035–36, deliveries expected by 2027).

Golden Friendship Joint Exercise: August–September 2024 – The exercise was first ever Sino-Bangladesh joint military exercise, focused on UN peacekeeping operations and counter-terrorism.

VT-5 (Type 15) Light Tanks – Bangladesh Army received additional VT-5 tanks, as a part of initial shipment of a second order of VT5 light tanks from Norinco (Chinese company) in February 2026. These are aimed to strengthens manoeuvre forces under Forces Goal 2030 modernization plan.

SY-400 Missile System – Bangladesh is also in process of acquiring SY-400, precision-strike short-range ballistic missile system, with a 280 km range, from China.

Hydrological Diplomacy:

Teesta River Comprehensive Management and Restoration Project (TRCMRP) –
The interim government pursued China to provide 50-year master plan for water management and China agreed to support with technical and technological assistance. The project with respect to Teesta River, a transboundary river originating in Sikkim and flowing through West Bengal before entering Bangladesh, is highly sensitive. The was formally discussed with China for financing, during May 2026 Beijing visit of Khalilur Rahman, Foreign Minister of Bangladesh

Revitalization of Pakistan-Bangladesh Relations:

The change of regime in Bangladesh, renewed bilateral relations between the two countries including security and economic cooperation. The maritime trade between Karachi and ports in Bangladesh was restored in 2024, followed by the resumption of direct flights. The Joint Economic Commission (JEC) was re-established and bilateral trade increased by 27% in 2024-25.

In diplomacy, the Dhaka visit of Lieutenant General Asim Malik (ISI Chief) in January 2025, was first ISI chiefs to visit Bangladesh, since 1971. Then Ishaq Dar (Deputy Prime Minister and Foreign Minister of Pakistan) visited Bangladesh in August 2025. Bangladesh was one of the participants in “Aman”, joint naval exercise organised by the Pakistan navy, in Karachi in 2025.

United States of America (USA): Strategy in Bangladesh:

In Bangladesh, the expansion of China and growing footprints of Pakistan, pushed USA to initiated an aggressive counter-balancing strategy. On 09 February 2026, USA and Bangladesh signed the legally binding U.S.-Bangladesh Agreement on Reciprocal Trade (ART). The ibid agreement characterises a mechanism of strategic containment by placing critical sectors under USA oversight. As it can be seen under Article 4 of the agreement, Bangladesh is obligated to increase purchases of USA military equipment and restrict military procurement from “certain countries”, a clause directly targeting Chinese defence dominance. To further strengthen this alignment, additional agreements were signed in early 2026, including a $3.7 billion purchase of 14 Boeing aircraft for Biman Bangladesh Airlines, an energy MoU establishing a $15 billion 15year USA LNG supply commitment.

Strategic Implications for India:

The convergence of Chinese military facilities, Pakistani intelligence revival, and a nationalist Bangladesh leadership has fundamentally altered India’s security dynamics, three critical vectors.

Siliguri Vulnerability: Asymmetric Leverage to China:

The physical proximity of the Chinese-funded Teesta Project (TRCMRP) to sensitive Siliguri Corridor signifies critical vulnerability to India. If China secures the TRCMRP contract, the Chinese state-owned enterprises, hydrologists and engineering assets will be deployment close to corridor (less than 100 Kms), exposing the Siliguri Corridor to persistent physical and electronic surveillance. Furthermore, control over hydrology gives China asymmetric leverage to manipulate water flows in Indian side.

Maritime Challenges: Susceptibilities in the Bay of Bengal:

The establishment of a G2G CETC drone manufacturing and assembly facility in Chittagong, along with the BNS Pekua submarine drydock, directly challenges the maritime dominance of India in the Bay of Bengal. In addition, the dual-use drydock at BNS Pekua enables the Chinese Navy (PLAN) to maintain submarine presence in the Indian Ocean, bypassing the Malacca Strait.

Border Security and Internal Instability:

The electoral resurgence of Jamaat-e-Islami, whose support base is concentrated in border districts to India, has revitalised concerns regarding cross-border subversion. Moreover, the revival of ISI (Pakistan) operational capability in Bangladesh, facilitated by the diplomatic push, could reactivate sleeper cells and coordinate cross-border subversion.

The geopolitical chessboard in Bangladesh has shifted fundamentally. For India, the “Neighbourhood Dilemma” is no longer about status quo, but about managing a highly fluid, multi-aligned political reality. With the BNP consolidating power post 2026 elections and JeIB gaining institutional ground, India must adapt interest-driven strategy. With Chinese presence in Bangladesh transitioning from infrastructure loans to deep strategic integration necessitates India to leverage its geographical proximity, economic engagement framed as a partnership of economic sovereignty (counter long-term sovereignty traps of Chinese dependencies) and proactive resolution of hydro-diplomacy. India also needs to expand Indo-USA overarching goal of preventing domination of China in the Bay of Bengal. The resurgence of radical entities in Bangladesh along with Pakistan rebuilding links, needs improvised intelligence mechanism and smart border management to counter internal security threat regarding cross-border radicalization.

Eventually for India, success in navigating this new order will depend on its ability to dissociate bilateral and diplomatic ties from Bangladesh’s internal ideological shifts, while safeguarding its core national security interests.

Authored by:

Lt.Col. Ujjual Abishek Jha, DCPP

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