India’s Northeast has become a key focus of its foreign policy, especially under the Neighbourhood First and Act East policies. This region, made up of eight states and sharing borders with five countries, has the potential to be a major hub for trade and connectivity between South and Southeast Asia. By improving infrastructure and transport links, India aims to strengthen economic ties with its neighbors and integrate the Northeast into regional development.

However, recent political changes in Bangladesh and ongoing instability in Myanmar have created serious challenges. Several important connectivity projects have been delayed or suspended, affecting trade, infrastructure development, and diplomatic relations. The shift in Bangladesh’s leadership has led to uncertainties in bilateral agreements, while conflicts in Myanmar have disrupted key transport routes. These issues not only slow down India’s regional plans but also impact economic growth and security in the Northeast.

India-Bangladesh Connectivity: Political Shifts and Economic Disruptions

Strategic Importance of Bangladesh for India’s Northeast

Bangladesh borders four Northeastern states, providing landlocked regions with crucial connectivity to the rest of India and maritime access to the Bay of Bengal. Over the past 15 years, bilateral cooperation between India and Bangladesh—especially under the Awami League government—has facilitated several connectivity projects, marking what was termed the “Golden Chapter” of bilateral ties. India has invested heavily in Bangladesh, with an $8 billion development portfolio.

Political Transition and its Impact

The regime change in Bangladesh in August 2024 has significantly altered bilateral dynamics. The political shift, marked by former Prime Minister Sheikh Hasina’s flight to India and the establishment of an interim government under Chief Advisor Muhammad Yunus, has led to strained relations. Anti-India sentiments, diplomatic uncertainties, and Hasina’s extradition dilemma have contributed to the suspension of key connectivity projects.

Disruptions in Trade and Infrastructure Development

• Maritime Access: India had secured operational rights to a terminal in Mongla Port (June 2024) and funded the Khulna-Mongla Port rail link. However, logistical hurdles have stalled their operationalization.
• Rail and Inland Transport: The Ashuganj Inland Container Port project, which would facilitate the newly inaugurated Akhaura-Agartala rail link, remains suspended.
• Declining Trade: Since the political transition, India-Bangladesh trade has declined, with border closures, customs clearance issues, and increased security surveillance. Between April and October 2023, Indian exports to Bangladesh fell by 13.3%, while imports dipped by 2.3%. Fly ash exports, critical for Bangladesh’s construction sector, dropped by 15–25%.
• Land Border Connectivity: The Benapole-Petrapole land port, responsible for nearly 30% of bilateral trade, has seen reduced activity, affecting border-dependent livelihoods. Railway services (Maitree Express, Bandhan Express, Mitali Express) have been suspended since July 2024, and cross-border bus services remain unavailable.

Suspended Joint Initiatives

Several initiatives outlined in the last Joint Statement before the regime change remain on hold, including:

• The Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicle Agreement, aimed at enhancing sub-regional connectivity.
• Operationalization of goods-train services from India (Gede, Haldibari) to Bangladesh (Darshana, Chilahati) and further into Bhutan.
• Cooperation in digital connectivity, including the rollout of 4G/5G by Indian telecom companies Bharti Airtel and Jio Infocomm.

Strategic Implications

The evolving political situation in Bangladesh underscores the fragility of India’s connectivity projects. The impact is not limited to trade and infrastructure; people-to-people connectivity and regional integration have also suffered setbacks.

Myanmar’s Internal Conflict and the Kaladan Project

The Arakan Army and Escalating Instability

Myanmar’s Rakhine State, critical to India’s Kaladan Multi-Modal Transit Transport Project (KMMTTP), is witnessing growing conflict. The Arakan Army (AA) has seized control of 15 out of 18 townships, disrupting key border points with Bangladesh and Paletwa in Chin State—both vital for India’s connectivity projects.

Challenges to India’s Connectivity Initiatives

• Sittwe Port Operations: The port, operationalized in 2023, faces security threats amid ongoing violence.
• Paletwa-Zorinpui Highway: The 109-kilometre road link crucial for KMMTTP remains incomplete due to legal, logistical, and security challenges. Despite AA’s reported support for the project, military airstrikes and conflicts have stalled progress.
• IMT Trilateral Highway (IMT-TH): Aimed at linking India’s Northeast with Thailand via Myanmar, this initiative is part of broader regional connectivity efforts extending to Cambodia, Laos, and Vietnam. However, instability has slowed progress, with only 25% of key infrastructure completed. The replacement of 69 bridges on the Tamu-Kyigone-Kalewa road remains a bottleneck.

Security and Infrastructure Constraints in India’s Northeast

• Land Disputes in Mizoram: Unresolved land acquisition issues and infrastructure deficiencies further delay the Kaladan project.
• Border Trade Disruptions: Trade routes through Moreh (Manipur) and Zokhawthar (Mizoram) remain restricted due to ethnic tensions and security concerns.
• Geopolitical Engagements: India has engaged with Myanmar’s ruling junta, ethnic armed organizations (EAOs), and the National Unity Government (NUG) to safeguard its projects. However, ongoing violence complicates diplomatic efforts.

Broader Geopolitical Implications

Myanmar’s instability poses a direct challenge to India’s regional connectivity ambitions under BIMSTEC and the Act East Policy. The prolonged conflict underscores the need for India to adopt a multi-stakeholder approach, ensuring that projects are resilient against geopolitical disruptions.

Way forward:

India’s Neighbourhood First and Act East policies rely heavily on stable and secure connectivity initiatives in its Northeast. However, the political transition in Bangladesh and Myanmar’s escalating conflict has disrupted key projects. Trade, infrastructure, and cross-border movement have suffered setbacks, threatening India’s broader regional integration efforts.

1.     Strengthening Border Management: India must enhance security measures along its borders with Bangladesh and Myanmar to safeguard trade routes and infrastructure projects.

2.     Diversifying Diplomatic Engagements: Proactive engagement with multiple political actors in Bangladesh and Myanmar is crucial to mitigating disruptions.

3.     Resilient Infrastructure Development: Investments in alternative connectivity routes, such as enhanced air and maritime transport, can provide long-term solutions.

4.     Regional Security Cooperation: Collaborating with ASEAN and BIMSTEC nations to stabilize Myanmar and improve cross-border governance is necessary.

5.     Economic and Trade Diversification: India should explore alternative trade agreements and investment strategies to minimize reliance on politically volatile regions.

While challenges persist, India’s strategic approach to connectivity must evolve to address emerging geopolitical realities. By focusing on resilience and adaptability, India can sustain its regional ambitions and secure the economic future of its Northeast.