Muslim World Report

India's Trade Blockade on Bangladesh Sparks Geopolitical Tensions

Dr. Anthony Lindsay | Apr 13, 2025 9:54 AM | 5 min read | 1038 words

TL;DR: India has terminated Bangladesh’s access to its ports and airports for cargo trans-shipment, escalating geopolitical tensions in South Asia. This blockade not only threatens Bangladesh’s economic stability but may also push it closer to China. Potential scenarios stemming from this action include strengthened Chinese influence in Bangladesh, increased Indian protectionism towards other neighbors, and possible international interventions.

The Situation

On April 8, 2023, India made a pivotal decision to terminate Bangladesh’s access to its ports and airports for cargo trans-shipment. This marked a significant shift in regional trade relations and heightened geopolitical tensions across South Asia. The Indian government presented this action as a defensive measure against perceived threats to national integrity and economic stability. This decision arises amid ongoing concerns over Bangladesh’s growing ties with China, particularly in the context of India’s sensitive Northeast region (Datta, 2002; Sikri, 2009).

The closure of these vital trade routes has jeopardized Bangladesh’s emerging market status and exacerbated an already precarious economic situation. This is further complicated by steep tariffs imposed by the United States, which have reached 36% due to protectionist policies initiated during the Trump administration (Islam, 2018).

Ramifications of India’s Decision

The ramifications of this decision extend far beyond a mere disruption of trade flows:

  • Shift in Regional Power: The blockade reshapes the balance of power among significant players, particularly China and the United States.
  • Economic Challenges for Bangladesh: Historically dependent on Indian routes for exports, Bangladesh faces severe economic challenges, threatening to derail its growth trajectory amid rising national debt and increasing domestic pressures (Rather & Gupta, 2014).
  • India’s Dominance: India’s motivations for this policy shift are deeply embedded in a desire to reinforce its dominance in the Bay of Bengal and assert influence over neighboring nations (Sahoo, 2013).

Additionally, by blocking trade routes that previously sustained Bangladesh’s economy, India may inadvertently drive Bangladesh closer to China, a nation eager to expand its influence in South Asia through initiatives like the Belt and Road Initiative (Chung, 2017). This evolving relationship could allow Bangladesh to establish new trade routes that circumvent Indian control, ultimately enhancing its bargaining power while challenging India’s longstanding hegemony (Sahoo, 2013; Hossain & Islam, 2021).

What If Scenarios and Their Implications

What if Bangladesh seeks stronger ties with China?

  • Deepening Partnership: Should Bangladesh opt to deepen its partnership with China in response to India’s trade blockade, the geopolitical landscape of South Asia could be fundamentally altered.
  • Increased Investments: China, already a major investor in Bangladesh, may seize this opportunity to solidify its presence through increased infrastructure investments.
  • Foreign Policy Shift: Such a pivot could embolden Bangladesh to adopt an assertive foreign policy aligned with Chinese interests, potentially stabilizing its economy in the short term.

However, this shift could provoke:

  • Military Reaction from India: India historically views Chinese encroachment with suspicion (Rather & Gupta, 2014).
  • Heightened Tensions: The dynamics of South Asian security could become increasingly complex, raising the specter of an arms race in the region.

What if India pursues aggressive trade policies with other neighbors?

If India intensifies its protectionist policies towards neighbors, this may set a troubling precedent for:

  • Isolationism and Nationalism: Similar stances towards Pakistan, Nepal, or Bhutan could emerge, leading to increased isolationism and nationalism (Gul & Yasin, 2011).
  • Economic Retaliations: Countries could experience trade wars, affected by historical grievances and border disputes.

Such shifts may hinder cooperative economic initiatives in the region:

  • Jeopardized Projects: Projects that enhance regional connectivity, such as those under the South Asian Association for Regional Cooperation (SAARC), could be compromised.
  • Reinforced Divides: Aggressive trade tactics may reinforce divides and lead to missed opportunities for collaboration.

What if international actors intervene?

Shifting trade dynamics may attract the attention of external actors, particularly the United States and China:

  • U.S. Response: If the U.S. recognizes that its tariffs are intensifying tensions, there might be calls for reassessment to stabilize the situation and counter Chinese influence (Kumar, 2019).
  • Chinese Support: Conversely, China may offer Bangladesh favorable economic packages, complicating geopolitical dynamics further (Pant, 2009).

The possibility of international involvement could:

  • Open Platforms for Dialogue: Facilitate negotiations among countries.
  • Risk Diplomatic Crises: Create tensions, especially in a region where sovereignty is defended fiercely.

Strategic Maneuvers

As India navigates this intricate geopolitical landscape, it must weigh:

  • Immediate Economic Benefits: The short-term gains of curtailing trade with Bangladesh.
  • Long-Term Strategic Consequences: The risks of alienating neighboring countries.

Reopening dialogue focused on cooperative agreements—addressing shared concerns through infrastructure projects and trade facilitation—could foster positive relations and mitigate fallout (Datta, 2002; Hossain & Islam, 2021).

Similarly, Bangladesh should actively seek to:

  • Diversify Trade Partnerships: Explore markets beyond India to lessen economic dependency.
  • Strengthen Ties with ASEAN and the EU: This could provide alternative pathways for growth and enhance negotiating power (Paprocki & Cons, 2014).

Both nations must consider regional cooperation frameworks prioritizing:

  • Economic Collaboration: Mechanisms for conflict resolution.
  • Trust-Building Initiatives: To alleviate tensions and promote dialogue.

As South Asia moves into an increasingly multipolar world, the choices made today will significantly shape bilateral relationships and broader regional dynamics.

Ultimately, it is imperative to acknowledge the human costs associated with aggressive nationalism and trade policies. The welfare of ordinary people in both nations must remain a priority, urging leaders to champion diplomacy over isolationism. A collaborative approach can serve the interests of both India and Bangladesh while fostering a more stable and prosperous South Asian region, reducing the specter of conflict and economic downturn for millions.

References

← Prev Next →