It's almost unimaginable that a Prime Minister who has been in power for 15 years would have to flee her country in such a manner. On Monday, Sheikh Hasina resigned from her post and subsequently left Bangladesh. This is unprecedented in the nation's history, marking the first time a Prime Minister has had to leave the country after losing power.
The surprise is heightened by the fact that Sheikh Hasina's party, the Awami League, won over two-thirds of the seats in the elections held in January of this year. She was elected Prime Minister for the fourth consecutive time but had to flee the country within seven months.
On Thursday, an interim government will be sworn in Bangladesh, headed by Muhammad Yunus. Alongside him, 15 other members will also take the oath. New elections are expected to occur in the next few months.
Currently, Sheikh Hasina is in India, and it is reported that she may seek asylum in a European country in the coming days. The political instability in Bangladesh could also have implications for India. Until now, Bangladesh was the only neighboring country that not only enjoyed political stability but also had strong relations with India.
How Big is the Blow to India?
Sheikh Hasina's departure from power in Bangladesh is a significant setback for India. Bangladesh was established with India's help, and since then, the relationship has been strong. Last year, Bangladesh was invited as a special guest to the G20 Summit in India. However, without Sheikh Hasina in power, things might become difficult for India.
In Bangladeshi politics, the two major faces have been Sheikh Hasina of the Awami League and Khaleda Zia of the Bangladesh Nationalist Party (BNP). For over three decades, power has alternated between the two women.
From India's perspective, having Sheikh Hasina in power was more beneficial. She has always been closer to India.
Last month, Sheikh Hasina visited China but had to cut her trip short and return. Upon her return, she made a significant announcement. She stated that although both India and China were interested in the Teesta Project, she wanted India to complete it.
On the other hand, Khaleda Zia's BNP is seen as leaning more towards Islamic extremism. The BNP has a closer relationship with Pakistan, which benefits China because Pakistan is a close ally of China.
Also Read: Why Muhammad Yunus of Bangladesh is referred to as 'America's Man'? What is his stance on India?
What's at Stake for India?
Since Sheikh Hasina became Prime Minister in 2009, relations between India and Bangladesh have grown stronger. Her government has not only quashed anti-India terrorist groups in Bangladesh but also enhanced economic ties during this period.
Trade between India and Bangladesh is robust. Interestingly, Bangladesh is one of those countries where India's trade balance is positive. India imports fewer goods from Bangladesh but exports significantly more.
In 2023-24, India imported goods worth INR 15,268 crore from Bangladesh while exporting goods worth INR 91,614 crore. This means trade between the two countries amounted to over INR 1.06 lakh crore last year.
In just the first two months of 2024-25, trade between the two countries has already surpassed INR 17,000 crore.
The current instability in Bangladesh could affect trade. The border has been closed for two days, and it is uncertain when it will be reopened until conditions improve. Clearly, this will impact India's exports.
Also Read: From Friendship to Enmity... The Rivals in Bangladesh: The Bloody Politics of Two Leaders and the Story on Dhaka's Streets
What Else?
Since 2016, India has significantly aided Bangladesh in infrastructure development, extending an $8 billion credit line. This funding has been used to develop railways, roads, and ports. Last November, two projects - the Akhaura-Agartala cross-border rail link and the Khulna-Mongla Port rail line - were inaugurated.
The Akhaura-Agartala link is the sixth cross-border rail line between the two countries, which is expected to boost tourism and trade.
Moreover, India has invested over $120 million in Bangladesh.
The political and economic instability could also impact Indian companies operating in Bangladesh. Until conditions stabilize, the earnings of these companies may be affected.
Potential Increased Issues:
1. Sheltering Militants Again:
During the insurgency in Northeast India, militant groups found refuge in Bangladesh. They were provided with weapons and funds. In the new regime, this could pose a significant problem for India, especially as Pakistan tries to reignite terrorist activities in Kashmir. Threats from both sides could create significant issues for India.
2. Increased Dependence on the Chicken's Neck:
For connectivity with Northeast India, Bangladesh served as a major route. If the new government does not cooperate with India, the connectivity to the Northeast would once again rely on the Chicken's Neck, which is crucial for countering China. Strategically, this would be a significant problem for India.
3. Suspense Over Free Trade Agreements:
Last year, both countries began discussions for a free trade agreement (FTA). This agreement would have greatly benefited Bangladesh while potentially boosting India's trade by nearly 200%. However, the negotiations are now in jeopardy.
4. Refugee Problems:
After the coup, minorities in Bangladesh, primarily Hindus, might be targeted again. A large number of them could seek refuge in India, creating a new refugee problem.
