New Delhi: As Bangladesh’s interim government Chief Adviser Muhammad Yunus on Sunday said that large-scale Chinese investments will be a “game-changer” for his country, India is likely to be taking note – and not without unease.
“Chinese companies are the masters of manufacturing in the globe and we want to be your partner,” the Daily Star news website quoted Yunus as saying while inaugurating a daylong China-Bangladesh Conference on Trade and Investment. The daylong conference was jointly organised by Bangladesh Economic Zones Authority (BEZA) and Bangladesh Investment Development Authority (BIDA).
Yunus said that tens of millions of Bangladeshi youth desperately need good jobs to express the skill and tenacity they have in making a mark in history. “Bangladesh stands at the cusp of a transformative era,” he said. “Our interim government has been steadfast in implementing reforms aimed at enhancing the investment climate, streamlining regulatory frameworks and ensuring a conducive environment for business operations.”
He further stated that these efforts are designed to attract foreign direct investment, stimulate economic growth, and create employment opportunities for young people. According to the Daily Star report, the conference saw the participation of the largest-ever Chinese business delegation to visit Bangladesh, comprising over 150 investors and business leaders representing scores of companies, including some of the largest in China.
While investment is generally welcome in developing economies, the scale, scope, and strategic nature of Chinese involvement in Bangladesh will raise serious concerns for India and the broader regional balance of power.
India’s foremost concern is rooted in geopolitics. Chinese investments in Bangladesh – especially in infrastructure such as ports, energy, and telecommunications – are seen in Delhi through the prism of strategic encirclement. This is often referred to as the “String of Pearls” theory, which posits that China is developing a network of commercial and military facilities around India to secure its own maritime interests and potentially constrain India’s influence.
Ties between India and Bangladesh have been tense ever since Bangladesh Prime Minister Sheikh Hasina was ousted from power after a students’ agitation against job quotas snowballed into a mass uprising against what people called her authoritarian style of governance. Though Prime Minister Narendra Modi held a meeting with Yunus on the sidelines of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Summit in Bangkok in April this year, the latter’s comments have continued to be unfavourable for India.
Bangladesh has long been considered within India’s natural sphere of influence, bolstered by historical, cultural, and geographic proximity. While Dhaka had, under former Prime Minister Hasina, maintained strong ties with Delhi, it has also actively pursued a “balanced” foreign policy that welcomes Chinese capital and technology.
If China becomes Bangladesh’s largest economic partner and infrastructural developer, New Delhi risks losing its traditional leverage. Chinese funding often comes without the democratic and environmental safeguards demanded by Western or Indian partners, making it more attractive in the short term to many developing countries.
Bangladesh is a critical gateway for India’s landlocked northeastern states. India has invested heavily in connectivity projects through Bangladesh, such as rail and road links and the use of Chittagong and Mongla ports. Chinese involvement in these same corridors could create operational or security challenges.
If Beijing gains influence over Bangladesh’s infrastructure planning and execution, it may complicate India’s efforts to integrate the Northeast with the rest of the country and with Southeast Asia. There’s also the concern of surveillance or digital infrastructure risks if Chinese companies dominate sectors like telecom, energy grids, and e-commerce.
China’s economic penetration into Bangladesh doesn’t just concern India - it has broader ramifications for the South Asian security architecture and the Indo-Pacific balance. The US, India, Australia and Japan - members of the Quad - are all wary of China’s Belt and Road Initiative (BRI), which seeks to link Asia, Africa, and Europe through a network of trade and infrastructure.
Bangladesh has officially signed on to the BRI, making it part of China's regional infrastructure web. As the US and its partners try to offer alternative frameworks such as the India-Middle East-Europe Economic Corridor (IMEC), a China-aligned Bangladesh could tilt the scales away from the Indo-Pacific vision promoted by the Quad.
India has tried to counter China’s influence through its Neighbourhood First and Act East policies, increasing aid, concessional credit, and connectivity initiatives. New Delhi also relies on cultural, linguistic, or foreign and historical ties, as well as on soft power and shared democratic values.
According to an Indian expert on the politics and economy of Bangladesh, Yunus’s statement at the inauguration of Sunday’s conference should be seen as a political one.
“He is trying for a bilateral free trade agreement (FTA) with China,” the expert told ETV Bharat on the condition of anonymity. “The event in Dhaka is a part of that.” The expert said that India will be concerned as any Chinese investment will be a threat to Indian business bases in Bangladesh. “This is a threat to South Asia as a whole as well,” the expert added.
According to Dhaka-based journalist Saifur Rahman Tapan, it is evident that Yunus is pitting one country against another, particularly those who are known to be geopolitical players in the region.
“On the one hand, he is inviting Chinese business people to Bangladesh,” Tapan told ETV Bharat over the phone from Dhaka. “On the other hand, he is working with the US and other Western powers to jeopardise Chinese investments in Rakhine State in Myanmar.”
He said that the environment in Bangladesh is also not conducive for foreign investments. There are regular labour protests and an ongoing energy crisis. “During the previous government’s time as well, we heard that China is interested in investing in Bangladesh,” Tapan said. “But very few Chinese firms came to Bangladesh.”
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