Under Sheikh Hasina’s leadership since 2009, India-Bangladesh relations have improved significantly through enhanced diplomatic, economic, and strategic cooperation. Hasina’s pragmatic approach has focused on mutual benefits and addressing long-standing issues [8]. A key achievement was the 2015 Land Boundary Agreement (LBA)¹, resolving a 1947 dispute with the exchange of 162 enclaves and border demarcation. Her ability to garner domestic support for the LBA highlights her commitment to peaceful resolution, improving lives for many enclave residents [10].

Economic cooperation between India and Bangladesh has flourished, with India being a major trading partner. Hasina’s government provided duty-free access to Indian markets, boosting Bangladeshi garment exports [8]. Indian investments in energy and infrastructure deepened ties, while regional connectivity improved through the BBIN Motor Vehicle Agreement [14] and railway links like the Maitree Express [13]. Energy collaboration increased with India’s electricity supply and projects like the Maitree Super Thermal Power Plant. Despite challenges, it includes water-sharing disputes [10] and political tensions surrounding the CAA [14]. Hasina maintained a cooperative approach within SAARC, BIMSTEC, and IORA [16].

India’s steady ascent as a global power, along with its prospects of becoming the world’s third-largest economy, compels Dhaka to collaborate closely with New Delhi [1][17]. Consequently, Bangladesh will continue to rely on India’s kindness, compassion, and demeanour. India has a total area of 3,287,590 square kilometres, a population of 1.171 billion (2011), and a Gross National Income (GNI) of US$1.848 trillion (2011). Conversely, Bangladesh spans an area of 144,000 square kilometres and has a population of 164 million (2010). Its Gross National Income (GNI) stands at US$104.5 billion (2010), while PPP-GNI reaches US$267.2 billion (2010) [2][14][18].

During Prime Minister Sheikh Hasina’s trip to Delhi from April 7 to 10, 2017, the two prime ministers elevated our bilateral relations to a new height, surpassing the concept of a ‘strategic partnership’. The 11 agreements and 24 memorandums of understanding (MOUs) signed during this visit cover nearly every significant area of our cooperation, including security, trade, connectivity, energy, a civil nuclear agreement, defense, and the launch of new bus and train services, among others. In addition to the two previous Lines of Credit (LOCs), India provided a new LOC to Bangladesh during the visit, amounting to $5 billion, which includes $500 million allocated for defense acquisitions. Bangladesh plans to use this credit for priority initiatives, and similarly, it will apply the defence credit for necessary purchases. Furthermore, our private sectors contributed significantly by signing MOUs for investments totalling $13 billion, mainly in the energy sector [3][19].

As stated in the 2021 report by the UN Committee for Development Policy (CDP), Bangladesh has successfully transitioned its economy from a least developed country (LDC) to a developing nation, marked by significant growth, increased per capita income, notable advancements in human development, and a strong capacity to address economic vulnerabilities. Previously reliant on aid, it is now recognized as a development partner by developed nations and multilateral organizations [20].

During the latter part of the 1990s, Bangladesh’s annual GDP growth rate consistently exceeded 5 per cent, breaking free from the 4 per cent pattern that characterized the country’s growth over the previous twenty-five years [21]. In 2008, the GDP growth rate for Bangladesh was approximately 5 per cent. By 2019, this rate had risen to 8.15 per cent, largely attributed to the policy initiatives of Prime Minister Sheikh Hasina. Recently, Bangladesh has surpassed both India and Pakistan regarding nominal GDP per capita income for the fiscal year (FY2020). During this time, Bangladesh’s nominal GDP per capita stands at approximately 2227 US dollars, while Pakistan’s nominal GDP per capita is nearly half of that, at just 1186 US dollars. Meanwhile, India’s nominal GDP per capita is slightly below that of Bangladesh, at around 2191 US dollars [20].

At the request of Prime Minister Narendra Modi, Bangladesh’s Prime Minister Sheikh Hasina made a state visit to India on June 21-22, 2024. Sheikh Hasina was the first Head of State to travel to India after the Modi government began its third term. This visit marked her first bilateral engagement with India since her re-election on January 7, 2024. Prime Minister Modi emphasized Bangladesh’s strategic role at the crossroads of India’s Neighbourhood First, Act East, SAGAR², and Indo-Pacific initiatives. He underscored the significance of regional stability and collective prosperity, regarding Bangladesh as a vital ally in the development of India’s northeastern region. Conversely, Bangladesh perceives India as a crucial partner in its Neighbourhood Foreign Policy aimed at fostering shared peace and prosperity. Both leaders reiterated that the advancement and prosperity of India and Bangladesh are interlinked, expressing a shared commitment to elevate India-Bangladesh relations into a new era of forward-looking partnership. This vision aligns with their respective national development goals of ‘Viksit Bharat 2047’ and ‘Smart Bangladesh Vision 2041’. During the visit, ten Memorandums of Understanding (MOUs) and Vision Documents were exchanged, addressing multiple areas of collaboration. Furthermore, 13 important announcements were made [4][22].

Sheikh Hasina has played a significant role in the political climate of the country. Significant economic growth, massive infrastructure development, and an improvement in living standards have all occurred during her reign. As the head of the Awami League, Hasina has a significant impact on Bangladesh’s socio-political dynamics as well as its institutional structure. Ruled Bangladesh for more than 16 years, and her sudden departure from politics will undoubtedly hurt India-Bangladesh relations.

Since Bangladesh’s independence in 1971, changes in its political leadership have reshaped its bilateral relations with India, affecting trade, security, and diplomacy. Sheikh Mujibur Rahman’s governance fostered strong ties with India, formalised by the 25-year Treaty of Friendship, Cooperation, and Peace [23]. His assassination in 1975 initiated a decline, with General Ziaur Rahman shifting foreign policy to decrease reliance on India and align with Islamic nations and China [24]. General Ershad’s era was marked by trade cooperation, as well as Ganges water-sharing disputes and escalating anti-India sentiment [25].

Khaleda Zia’s era featured strained Indo-Bangladesh relations, with issues like the 2001 Boraibari clash and insurgent support [26]. Conversely, Sheikh Hasina, since 1996 has improved relations via treaties and cooperation, bolstering trade while some align with China and the Islamic bloc [27].

Sheikh Hasina resigned on August 5, 2024, causing political uncertainty in Bangladesh, with Muhammad Yunus leading the interim government [1][28]. Yunus is seen as neutral and reform-minded, creating dialogue opportunities, but the threat from anti-India factions, particularly those linked to the BNP, remains, given their history with Hasina’s Awami League [29].

Hasina’s departure indicated widespread dissatisfaction with governance and authoritarianism, with criticism of her 15-year rule due to dissent suppression and institutional decay [30]. The interim administration under Yunus aims to restore stability and ensure free elections, but the Awami League faces fragmentation without Hasina’s authority [31]. Emerging leaders present differing foreign policy directions, including Sajeeb Wazed Joy’s potential alignment with India and Khaleda Zia’s unpredictable nationalism. Youth leaders like Nahid Islam show reformist tendencies favouring openness, shaping future India-Bangladesh relations in trade and security [32][33].

Bangladesh’s electoral landscape is plagued by coercion and violence, particularly between the Awami League and the Bangladesh Nationalist Party. The 2014 and 2018 elections faced allegations of voter manipulation and unrest, diminishing public trust in democracy. Limited polling suggests few expect fair future elections, highlighting scepticism that fuels ongoing political volatility [34].

The elections anticipated between late 2024 and early 2025 are crucial for restoring democratic legitimacy in Bangladesh. Despite assurances from the transitional government for free elections, significant instability risks persist. Potential protests led by Khaleda Zia’s BNP could exacerbate tensions [35]. A youth movement plans a new party by February 2025, risking a more fragmented political landscape [33]. The interim government’s management of credible elections is vital amid opposition challenges [36] influencing ties with India.

Sheikh Hasina’s resignation in Bangladesh significantly affects India-Bangladesh relations, influencing economic ties, security cooperation, and water resource management. The interim government’s policies will shape future bilateral interactions, with economic stability [36], strong security collaboration, and efficient water management being essential for maintaining constructive relations amidst changing political conditions.

Under Hasina, bilateral trade thrived, reaching about $13 billion in 2023-24 [37]. Bangladesh emerged as a major market for Indian cotton, while also supplying ready-made garments. The interim government led by Muhammad Yunus now faces uncertainties regarding trade agreements, including the proposed FTA [37]. Political changes could jeopardize Comprehensive Economic Partnership Agreement (CEPA)³ negotiations, leading Indian investors to reconsider risks due to stability concerns [38].

Security cooperation has been vital during Hasina’s administration, aiming to combat cross-border terrorism, insurgency, and maritime challenges. The interim government’s uncertain position, amidst rising anti-India sentiments, may empower factions opposed to India. Continued counter-terrorism collaboration, extraditions, and border security are essential, especially with Bangladesh’s 4096-kilometre boundary with India [39]. Political instability or a shift towards militarism could heighten regional risks [40]. Water resource management is contentious, encompassing 54 shared rivers including the Ganges, Brahmaputra, and Teesta [41]. The expired Ganges Water Sharing Treaty in 2026 illustrates the scarcity of bilateral agreements [42]. Despite Hasina’s dialogue efforts on equitable sharing, particularly for the Teesta, no resolution has been reached. Concerns over potential shifts towards China linger [43]. Yet, opportunities for enhanced collaboration exist through multilateral frameworks [44], emphasizing the need to revitalize the Indo-Bangladesh Joint Rivers Commission for effective dialogue.

Under Sheikh Hasina’s leadership, Bangladesh fostered a strong relationship with India, focusing on security, trade, and cultural ties. Her pro-India stance allowed New Delhi to enhance its influence in South Asia, countering China’s presence (Ministry of External Affairs, 2024). Hasina was viewed as a strategic ally against Islamist extremism and for economic [1] collaboration [45]. However, her departure raises concern for India about its influence in Dhaka, with the interim government led by Muhammad Yunus expected to shift foreign policy toward greater sovereignty.

Speculation is increasing regarding a shift towards enhanced ties with China, especially in defense and infrastructure [46]. From highways to railways, seaports to airports, under-river tunnels to overhead expressways, water services to digital governance, and coal to solar power, China asserts its influence throughout Bangladesh through investment, technology, and knowledge. An estimate from the American Enterprise Institute (AEI), a US think tank, suggests that China’s overall investment in Bangladesh amounts to $7.07 billion. Moreover, Chinese firms have secured construction contracts totalling $22.94 billion across various sectors. Over the past decade, China has allocated $4.45 billion for 35 initiatives under the Belt and Road Initiative (BRI), according to Chinese Ambassador to Bangladesh Yao Wen [47].

Hasina’s exit creates opportunities for Beijing’s influence in the Bay of Bengal, challenging Indian security. The political transition has led to unrest, including violence against minorities and anti-India sentiment, reminiscent of past regional crises [48]. With a 4000-kilometre border, India is concerned about the repercussions of instability in Bangladesh. Indian policymakers confront the challenges of addressing domestic scepticism while engaging with Yunus’ interim government [49][50]. A nuanced diplomatic strategy is essential for bilateral cooperation in trade and security.

The political transition in Bangladesh has disrupted India’s economic interests, raising concerns over trade stability and investment prospects. With nearly $13 billion in bilateral trade for 2023-24, Bangladesh is India’s largest trading partner in South Asia. Under Sheikh Hasina, economic collaboration thrived through transit agreements and infrastructure projects. However, Muhammad Yunus’s interim government raises fears of a policy shift that may impact these arrangements. Indian investments, including over $8 billion for infrastructure and energy, now face uncertainty. Declining trade flows and potential risks to future projects highlight challenges, while uncertainty around initiatives like the Comprehensive Economic Partnership Agreement threatens regional economic integration, necessitating a recalibration of India’s strategy in the Bay of Bengal [37][51]-[54].

Sheikh Hasina’s departure marks a crucial juncture in Bangladesh’s politics, allowing the Bangladesh Nationalist Party (BNP) and a potential military-backed regime to emerge. Nobel laureate Muhammad Yunus leads the interim government amid uncertainty, aiming to stabilise the nation ahead of elections. Deep divisions remain as Hasina’s supporters and opponents compete for power [51][55].

The fall of Hasina’s administration has strengthened opposition figures like Khaleda Zia, leading the BNP to consider a confrontational approach towards India [30]. The new regime may foster closer ties with China and Pakistan, amid rising anti-India sentiment from recent protests [5][56]. India is concerned about increased Chinese influence in Bangladesh [56], and the Yunus government’s policies on trade and security will be crucial for existing bilateral agreements, including the $1.7 billion Adani power deal [57][58].

Leadership transitions in Bangladesh have significantly impacted its bilateral relationship with India, particularly since the 1971 Liberation War. Under Sheikh Mujibur Rahman (1971-1975), foreign policy favoured India, emphasising collaboration through trade, cultural exchange, and connectivity [23][66]. Following his assassination in 1975, leaders like Ziaur Rahman and H.M. Ershad adopted a nationalist stance, often anti-India, strengthening ties with China and Pakistan while promoting Bangladesh’s Islamic identity [24][67].

The return to democratic rule in 1991 under Khaleda Zia strained India-Bangladesh relations due to border and river-sharing disputes and cross-border insurgency [68]. Sheikh Hasina’s leadership since 2009 has improved cooperation through agreements like the Ganges Water Treaty and the 2015 Land Boundary Agreement. Leadership transitions have influenced trade and border security, with Hasina’s governments facilitating trade and combating insurgency, while others opted for protectionist stances. Bangladesh’s international alignment has varied per administration [26][27].

The 2024 ousting of Hasina and the rise of Muhammad Yunus’s interim government introduced uncertainty. With Yunus signalling a more independent foreign policy, concerns over renewed nationalist rhetoric and anti-India sentiment have resurfaced [31][69]. As Bangladesh’s domestic politics continue to evolve, the future of its ties with India will likely depend on shared interests and mutual diplomacy.

The World Bank has committed over $39.5 billion to Bangladesh since 1972 for development, including over $3 billion for COVID-19 recovery, making it crucial during the political transition [73]. The United Nations is also important for democratic governance and human rights, aiding the interim government in stabilising the political climate [74]. Post-Hasina, China is expected to increase its influence, capitalising on political changes to promote infrastructure investments through the Belt and Road Initiative [75][76]. Analysts predict that opposition forces like the BNP may adopt a pro-China stance, impacting India’s regional strategy [77].

The United States aims to support democratic reform under the interim government led by Nobel laureate Muhammad Yunus, while navigating complex local dynamics, particularly concerns regarding the treatment of minorities [78][79]. Russia, historically tied to Bangladesh’s energy and defense sectors (e.g., Rooppur Nuclear Power Plant), may seek to reaffirm its presence, though growing pro-Western sentiment could limit its influence.

The Quad, involving the U.S., India, Japan, and Australia, influences regional strategies. Bangladesh, traditionally neutral, faces pressure from Quad interests in counterterrorism and security, which may concern China [80]. The interim government needs to balance relations with China, the U.S., Russia, and the Quad, while engaging with the UN and World Bank for stability and growth.

The leadership change in Bangladesh complicates India-Bangladesh relations. Hasina’s departure has led to increased anti-India sentiment and criticism of India’s ties to her regime [81][82]. Concerns rise over the BNP’s resurgence, communal violence against minorities, and security issues in India’s north-eastern Border States, necessitating a vigilant Indian foreign policy.

Future India-Bangladesh relations hinge on factors like Bangladesh’s domestic stability, election outcomes, and regional geopolitical dynamics. The interim government must tackle political unrest, boost economic growth, and handle communal tensions effectively. A credible electoral process and collaboration with India may enhance ties, while a rise of the BNP or radical groups could strain relations, affecting trade and security. Shifts in Bangladesh’s balance between China and India may elevate Chinese influence, challenging India [3][83].

Hasina’s exit signifies a pivotal change in India-Bangladesh relations, impacting cooperation on the border, security, and infrastructure [84]. Proactive strategies are essential for managing challenges and leveraging opportunities.

7.3.1. Strategic Policy Recommendations for India

1) Engage with Diverse Political Actors: India should actively engage a broad range of political parties and social groups in Bangladesh, building goodwill beyond traditional alliances to maintain strong ties regardless of leadership changes.

2) Strengthen Economic Ties: Accelerate negotiations on trade agreements like CEPA and develop Special Economic Zones (SEZs) while simplifying trade processes to promote mutual economic growth.

3) Enhance Security Cooperation: Prioritise joint security frameworks, including task forces and intelligence sharing, to tackle terrorism and cross-border crime.

4) Promote Connectivity Projects: Advance infrastructure linking roads, rail, waterways, and energy to support Bangladesh’s development.

5) Leverage Cultural Diplomacy: Support cultural exchanges, educational scholarships, tourism, and arts to strengthen people-to-people relations.

7.3.2. Strategic Policy Recommendations for Bangladesh

1) Diversify Economic Partnerships: Bangladesh should broaden its economic ties beyond India by strengthening relations with Southeast Asian and European countries to reduce dependence risks.

2) Policy Focus on Regional Integration: Pursuing sub-regional cooperation through frameworks like BBIN⁴ can enhance economic benefits and capitalise on geographic proximity.

3) Enhance Disaster Management Frameworks: Bangladesh should collaborate with India on joint disaster management strategies, including research and emergency response training.

4) Promote Trade Facilitation Measures: Streamlining customs and investing in logistics can improve trade efficiency with India.

5) Advocate for Water Resource Management: Prioritise negotiations on water sharing, especially concerning the Teesta River, to ensure equitable riparian rights.