India loses key Bangladesh port project to China. Should Delhi be concerned?

Bangladesh has signed a deal with China to build an economic zone near Mongla Port on land once allotted to India. The move deepens Dhaka's engagement with Beijing, while raising India's strategic concerns in the Bay of Bengal.

In Short

• Mongla lies 188 km from Kolkata and close to the Sunderbans
• The 110-acre zone will house factories, warehouses and storage facilities
• India had secured the site in 2015 under Sheikh Hasina

Amid turbulence in ties between India and Bangladesh, China seems to be stepping into that vacuum. Bangladesh Prime Minister Tarique Rahman, who chose China for his first foreign visit, has signed an agreement with a Chinese state-owned company to develop an economic zone near the strategic Mongla Port, which sits close to India's eastern coastline in the Bay of Bengal. Significantly, the land was originally earmarked for an Indian economic zone, but was delisted by the Muhammad Yunus regime as ties hit rock bottom.

Mongla, Bangladesh's second-largest and second-busiest seaport after Chittagong, is just 188 km from Kolkata and sits close to the Sunderbans. The economic zone will be developed by China on 110 acres of land adjacent to Mongla Port in Bagerhat, according to a report in Bangladesh's Business Standard. China plans to set up manufacturing industries, warehouses and storage facilities in the zone.

WHY INDIA SHOULD BE CONCERNED?

For India, the concern is two-fold. First, a strategically key project has slipped out of its hands. Secondly, it opens the door for a larger Chinese presence in the Bay of Bengal and the wider Indian Ocean region.

Even though investment in a port project does not automatically mean military access, China has previously been accused of using overseas ports where it has invested for intelligence gathering and surveillance activities.

The agreement signals a major policy shift by Bangladesh. It risks kicking off a strategic contest between India and China in a region that Delhi has traditionally viewed as its sphere of influence and backyard.

Over the years, China has been actively expanding its influence across the Indian Ocean as part of its Maritime Silk Road initiative. It has invested heavily in ports from Gwadar in Pakistan to Djibouti in East Africa. In all, Chinese firms are involved in 17 Indian Ocean port projects.

A major reason is energy security. China is the world's largest crude oil importer. About 80% of China's energy imports pass through the Indian Ocean. This underscores the strategic importance of ports like Mongla for China.

HOW PORT PROJECT SLIPPED OUT OF INDIA'S HANDS?

India had recognised the importance of the Mongla Port way early. It was in 2015, during the tenure of Sheikh Hasina, that Bangladesh and India signed an MoU to develop two economic zones - one in Mongla and the other in Chattogram's Mirsarai. India was to provide a line of credit to Bangladesh for the projects.

Bangladesh wanted to modernise the Mongla Port and establish it as a capable port like Chittagong in the shortest possible time. To boost bilateral trade, the two countries also constructed a new railway line between Mongla Port and Khulna.

In 2018, the Prime Minister Narendra Modi government selected the Hiranandani Group for developing the land at Mongla, as per the report. Four years later, an MoU was signed with the Bangladesh Economic Zones Authority (Beza).

And then came the turmoil. Bangladesh's streets erupted in protest in 2024 as students led an uprising against Hasina over corruption. Hasina was forced to flee Dhaka and took shelter in India.

Under interim chief Yunus, Bangladesh saw a rise in anti-India sentiment. Radical Islamist leaders accused Hasina of pandering to India.

Amid the chaos, the project failed to take off. In 2025, Yunus took India off the project, delisting it. Bangladeshi officials claimed the Indian developer failed to commence work within the two years as stipulated in the agreement.

China, which has been building a kind of port empire through strategic investments and loans, sensed an opportunity.

Last year, amid a strain in India-Bangladesh ties, the Chinese embassy in Dhaka reached out to Yunus with a proposal. It wanted to develop a Chinese economic zone on the same 110-acre site that was originally given to India.

That agreement was finalised earlier this week as Tariq Rahman visited China.

TEESTA RIVER OUTREACH ALSO A WORRY FOR INDIA

Bangladesh also touched India's sensitive nerve after it agreed to deepen cooperation with China on the management of the Teesta River project.

The Teesta River has been at the heart of a longstanding dispute between India and Bangladesh over water sharing.

Despite differences, Hasina, a pro-India leader, always preferred Delhi to undertake conservation and management work on the river.

China's participation in the project will raise India's hackles as it lies close to the sensitive and vulnerable Chicken's Neck or Siliguri Corridor. It is basically the 22-km narrow stretch linking India's northeastern states with the mainland.

The developments regarding the Mongla Port economic zone project and the Teesta river signal Bangladesh's gradual pivot towards China. However, it must be noted that China has always been Bangladesh's largest trading partner. But Bangladesh cannot ignore its geographical reality, as it shares its largest border with India.

The Mongla Port project marks a crucial strategic moment. It now remains to be seen how Bangladesh balances its economic ties with China while carefully managing its longstanding relationship with India.

- Ends