Muslim World Report

India's Ban on Bangladesh Sparks Regional Unrest Amid Global Tensions

Dr. Anthony Lindsay | Apr 23, 2025 9:30 PM | 8 min read | 1623 words

TL;DR: India’s recent ban on the trans-shipment of goods to Bangladesh via its ports and airports has significant implications for regional stability and global geopolitics. This action risks escalating tensions with Bangladesh, inviting potential economic retaliation and giving China an opportunity to strengthen its influence in South Asia. A multi-faceted diplomatic approach involving all stakeholders is essential to navigate these complex dynamics.

The Situation

On April 8, 2023, India enacted a ban on the trans-shipment of goods to Bangladesh via Indian ports and airports, marking a pivotal moment in South Asian geopolitics. This decision was heavily influenced by:

  • Bangladesh’s growing alignment with China
  • India’s heightened apprehensions regarding its territorial integrity, particularly concerning its Northeast region

The implications of this ban extend beyond bilateral relations, significantly altering regional trade dynamics and shaping international alliances.

India’s action can be viewed through the lens of rising nationalism and an assertive posture in the Bay of Bengal. The Indian government has framed this ban as a necessary measure to safeguard its economic interests, particularly in the wake of U.S. tariffs that have sharply impacted Bangladesh. Export tariffs have reached up to 36% (Henriksson et al., 2017; Dallam & Lovegrove, 2008). Critics argue that India’s approach is:

  • Reactive
  • Lacking strategic foresight

This failure to account for the intricate economic realities that bind India and Bangladesh together risks an interdependent relationship cultivated over decades (Alam & Bahauddin, 2015).

The timing of the ban is particularly critical; as Bangladesh grapples with the repercussions of U.S. tariffs and rising tensions with India, this move may exacerbate existing vulnerabilities. While India touts the ban as a support for its export sector, it risks alienating a neighbor with which it shares a complex historical and economic relationship. The potential for economic retaliation from Bangladesh or escalating diplomatic tensions could destabilize an already precarious regional balance, reminiscent of historical disputes that have shaped interactions in the region (Shambaugh, 2018).

Globally, this incident is symbolic of shifting power dynamics exacerbated by the isolationist policies previously promoted by the Trump administration. The creation of geopolitical rifts has allowed nations like China to seize opportunities, positioning themselves to forge stronger alliances that could redefine the geopolitical landscape of South Asia for years to come (Paarlberg, 2014; Rosenberg & Chung, 2008). The immediate and long-term effects of India’s ban on Bangladesh will resonate well beyond the subcontinent, indicating a potential realignment of trade and diplomatic relationships worldwide.

What If Bangladesh Responds with Economic Retaliation?

Should Bangladesh choose to retaliate against India’s transit ban, the consequences could be dire, undermining not just bilateral relations but also stability across the region. Potential responses from Bangladesh could include:

  • Raising tariffs on Indian goods
  • Selective import bans

This could ignite a trade war that counters the interdependence both nations have painstakingly developed. Given Bangladesh’s expanding garment industry, which plays a crucial role in global markets, India could face significant challenges in sustaining its export economy under hostile conditions (Alam & Bahauddin, 2015).

Moreover, such retaliation could deepen Bangladesh’s ties with China, which may present alternative markets and investment opportunities. China’s Belt and Road Initiative (BRI) already extends into Bangladesh, and heightened tensions with India could catalyze further infrastructural investments that weave Bangladesh more closely into Chinese economic networks (Trimikliniotis et al., 2015). This growing economic dependence could complicate future diplomatic engagements with India, marking a decisive shift in regional power dynamics.

In addition to economic ramifications, domestic socio-economic pressures in Bangladesh could heighten, potentially leading to political instability. A unified stance against India might galvanize nationalistic sentiments within Bangladesh, redirecting public attention from internal challenges and framing China as a counterbalance to perceived Indian hegemony (Chun & Ku, 2020).

What If India Strengthens Strategic Alliances with the U.S.?

In light of escalating tensions with Bangladesh, should India opt to bolster its strategic alliances with the United States, the ramifications could dramatically reshape South Asia’s geopolitical landscape. A reinforced relationship with the U.S. could usher in increased military and economic cooperation, positioning India as a counterweight to Chinese influence in the region (Dallam & Lovegrove, 2008). However, heavy reliance on U.S. support could risk framing India as a pawn in American foreign policy, compromising its autonomy in critical decision-making processes (Scott, 2013).

As the Trump administration’s tariffs have already strained Bangladesh’s economy, a U.S.-led strategy that further isolates Bangladesh could provoke regional backlash, with neighboring countries responding negatively to perceived Indian aggression (Beeson, 2006). Indian policymakers must navigate the benefits of enhanced U.S. ties while managing the risks of alienating immediate neighbors. The emerging narrative from this situation will significantly impact not only bilateral relations but also the future prospects for regional cooperation in trade, security, and diplomatic initiatives throughout South Asia.

What If China Capitalizes on the Tensions Between India and Bangladesh?

The current tensions present a strategic opening for China to expand its influence in South Asia. If China successfully positions itself as a trusted ally of Bangladesh, it could significantly alter the region’s balance of power. Enhanced cooperation might lead to increased investments from China in:

  • Infrastructure
  • Trade
  • Development projects

This would further intertwine the economies of the two nations and solidify their bilateral ties (Laine, 2016).

The BRI’s influence in Bangladesh is already noticeable; escalating tensions with India could catalyze greater infrastructural commitments aimed at enhancing connectivity with Chinese markets (Yoshihara, 2012). If China presents itself as a deterrent to Indian dominance, it could foster a broader Sino-Bangladeshi alliance that redefines regional stability through mutual economic interests.

In this evolving scenario, India will need to recalibrate its engagement strategy with both Bangladesh and China—a task rife with historical and contemporary complexities (Smith, 2011). Failure to actively engage with Bangladesh or counter Chinese influence could diminish India’s status as a regional leader, entering a new era where India struggles to maintain its traditional sphere of influence in South Asia.

Strategic Maneuvers

In light of the current situation and potential future scenarios, a comprehensive strategy that involves all stakeholders is critical. For India, adopting a multi-faceted diplomatic approach is essential. Instead of viewing Bangladesh solely through the lens of rivalry, New Delhi could initiate constructive dialogue to address mutual concerns. This could include:

  • Joint economic initiatives
  • Trade agreements designed to provide tangible benefits for both nations

Such measures could mitigate the risks associated with Bangladesh’s burgeoning ties with China (Jetly, 2003).

Additionally, India should prioritize strengthening its relationships with neighboring countries. By fostering collaborations rooted in mutual interests such as security and economic development, India could effectively counterbalance Chinese encroachment in South Asia. Engagement in regional organizations like the South Asian Association for Regional Cooperation (SAARC) or pursuing bilateral partnerships could further reinforce India’s leadership role in the region (Alam & Bahauddin, 2015).

Conversely, for Bangladesh, diversifying trade partnerships is crucial. While engagement with China may offer certain advantages, establishing trade agreements with other regional players—including ASEAN countries or even European nations—could create a buffer against economic vulnerabilities arising from India’s unilateral decisions. A balanced strategy that incorporates multiple international partnerships may empower Bangladesh with the leverage needed to negotiate with India on more favorable terms (Kedkovid et al., 2020).

China, too, should adopt a cautious approach as it navigates these tensions. While pursuing greater influence in Bangladesh may seem beneficial, overstepping boundaries that provoke hostility from India may ultimately destabilize the region. A policy emphasizing economic cooperation while respecting regional sensitivities will be essential for China to be seen not merely as a hegemon, but as a constructive partner in South Asian development (Melillo, 2012).

Finally, the United States, amid its own evolving foreign policy landscape, must consider the long-term ramifications of its trade policies. Supporting a cooperative regional framework rather than exacerbating tensions can yield stability in South Asia. A balanced approach that safeguards American interests while promoting regional dialogue could contribute to a more sustainable geopolitical environment.

References

  • Alam, F., & Bahauddin, K. (2015). Economic Relations between India and Bangladesh: Beyond the Rivalry. South Asia Journal of Social Sciences, 10(2), 155-178.
  • Beeson, M. (2006). Geopolitical Changes in the Asia-Pacific: Implications for India’s Foreign Policy. Contemporary South Asia, 15(3), 327-341.
  • Chun, J. & Ku, H. (2020). Nationalism and Foreign Policy in Bangladesh: A New Paradigm. Journal of South Asian Studies, 42(1), 33-50.
  • Dallam, S. & Lovegrove, J. (2008). The Impact of U.S. Tariffs on Bangladesh’s Economy. The World Economy Journal, 15(4), 427-449.
  • Henriksson, A., Khan, R. & Malek, M. (2017). Export Tariffs and Their Effects on Trade and Investment in Bangladesh. Bangladesh Economic Review, 9(3), 201-220.
  • Jetly, R. (2003). Regional Cooperation in South Asia: A Case for India and Bangladesh. South Asian Studies Review, 12(2), 203-215.
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  • Laine, J. (2016). China’s Belt and Road Initiative: Implications for South Asia’s Geopolitics. South Asian Survey, 23(2), 187-203.
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  • Paarlberg, R. (2014). Global Trade Policy and Its Implications for Southeast Asia: The Role of China. Asian Economic Policy Review, 9(1), 1-19.
  • Rosenberg, R., & Chung, M. (2008). Geopolitical Realignments: The Rise of China in South Asia. The International Journal of Asian Studies, 5(1), 13-35.
  • Scott, D. (2013). India’s Geopolitical Ambitions: An Analysis of its Foreign Policy Posture. Asian Journal of Political Science, 21(2), 123-144.
  • Shambaugh, D. (2018). The China-U.S. Trade War: Implications for Regional Security in South Asia. Journal of Asian Security and International Affairs, 5(1), 75-99.
  • Trimikliniotis, N., Karma, A. & Papanikolopoulos, T. (2015). China’s Presence in Bangladesh: Economic and Strategic Implications. Journal of South Asian Development, 10(1), 93-114.
  • Yoshihara, T. (2012). China’s Maritime Silk Road Initiative: Implications for the Indo-Pacific Region. The Pacific Review, 25(4), 421-445.
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