[Analytics] China takes Bangladesh into its embrace now as Delhi-Dhaka ties go downhill

India is concerned that China, which has been “targeting all of India’s friendly neighbours” such as Nepal and Sri Lanka, will now focus on turning Bangladesh against New Delhi, at a time when Dhaka is already unhappy over the National Register of Citizens (NRC) and a host of other issues, ThePrint has learnt. Nayanina Basu speciallly for ThePrint.

The ongoing India-China standoff has not just given rise to apprehensions of a potential disruption of bilateral ties between New Delhi and Beijing, it has also made the Narendra Modi government even more wary of President Xi Jinping’s growing influence in Bangladesh, which at present is the closest to India in the neighbourhood.

From developing a mega smart city near Dhaka to building an airport in Sylhet in eastern Bangladesh, besides a growing defence relationship, China has been making deep inroads in that country, much to New Delhi’s discontent.

India believes Beijing will now ratchet up pressure on Dhaka to hand over certain lucrative infrastructure and connectivity projects to it in an effort to “provoke” New Delhi, official sources told ThePrint.

“The challenge is all around. From Nepal to Bangladesh, China is targeting all of India’s friendly neighbours one by one,” a top government official, who did not wish to be identified, told ThePrint. “The concern now has doubled with the Chinese Communist Party paving the way for Pakistan to enter Bangladesh.”

Beijing also could not find a better time as Dhaka is currently unhappy with New Delhi.

The friendly relationship between India and Bangladesh, particularly political ties, have been plummeting ever since New Delhi rolled out the Citizenship Amendment Act (CAA) as Dhaka is concerned that India will push towards it those who will be deemed “foreigners” under the National Register of Citizens (NRC).

China’s Dhaka play

Of late, the Chinese have been working on improving ties with Bangladesh.

This month onwards, China will allow 97 per cent of Bangladesh’s exports to Beijing to enter the country under its duty-free, quota-free programme. This was decided after a phone call between Xi and Bangladesh Prime Minister Sheikh Hasina in June.

With this move, as many as 8,256 Bangladeshi items will enjoy duty-free access to Chinese markets.

“China has always been playing these tactics and putting pressure on India’s neighbouring countries and it has been making rapid progress in doing so,” said Veena Sikri, former High Commissioner of India to Bangladesh. “India should work harder now, especially, in a post-Covid scenario, keeping in mind that Beijing’s pressure will only increase.”

She added, “It may seem the Chinese implement projects quickly, but they have problems also. They come in with a friendly price but increase it for spare parts and all. While India gives them favourable rates for lines of credit, the Chinese lay a debt trap.”

Earlier this year, Bangladesh sought Chinese funding to develop nine new projects worth $6.4 billion, which include a sea port, a bridge and hi-tech parks among others.

China is already implementing $10 billion worth of infrastructure projects in Bangladesh, which includes economic zones and power plants.

China and Bangladesh have also been deepening their defence ties. From Chinese tanks, frigates, submarines and fighter jets, Beijing has provided Dhaka with a number of military equipment under a 2002 Defence Cooperation Agreement.

“China has always been present in Bangladesh, including in the defence sector, but India’s sensitivity has naturally increased after the Ladakh standoff,” emphasised Constantino Xavier, fellow (Foreign Policy Studies), Brookings India and the Brookings Institution, Washington DC. “Delhi is now pushing Dhaka to reduce its relations with China and Dhaka is naturally pushing back so it can receive maximum benefits from China without upsetting India.”

According to Joyeeta Bhattacharjee, fellow with the Observer Research Foundation (ORF), the Chinese have invested much less than what it had promised in Bangladesh so far.

“It is uncanny to compare India and China. Relations between the two countries should be free of comparison with a third country,” she noted in a report, in which she argued that the duty-free access given by the Chinese to Bangladeshi products comes with stringent clauses.

Bangladesh is also one of the key countries in the region for Xi’s flagship Belt and Road Initiative (BRI). China and Bangladesh established strategic ties in 2016 during Xi’s visit there when he also announced an investment to the tune of $25 billion.

In 2019, Bangladesh signed an MoU with a Chinese firm to build renewable energy projects to provide a total of 500 megawatts of power by 2023.

Pakistan reaches out to Bangladesh

India’s diplomatic community is now faced with a double whammy as Islamabad is also attempting to build a bridge with Dhaka.

“When China is there, Pakistan can never be far behind,” said another source, who added that New Delhi is closely watching the developments.

In a surprise move, Pakistan Prime Minister Imran Khan called his Bangladeshi counterpart Sheikh Hasina for the first time on 23 July and spoke about Islamabad’s commitment “deepening fraternal relations with Bangladesh on the basis of mutual trust, mutual respect and sovereign equality”.

This came after Pakistan’s envoy to Dhaka, Imran Siddiqui, met Bangladesh’s Foreign Minister A.K. Abdul Momen.

“We want stronger relations with brotherly Bangladesh in all walks of life. We share common bonds of history, religion and culture,” Siddiqui said.

According to Selim Raihan, Professor (Economics), Dhaka University and Executive Director, South Asian Network on Economic Modeling (SANEM), there’s a friendship deficit in the India-Bangladesh ties.

“There has been some discomfort in Bangladesh on its expectations from India,” Raihan said. “Bangladesh has been most friendly to India compared to others in the region, yet the reciprocity from India’s side has been rather weak.”

He added, “The NRC has created a lot of discomfort in Bangladesh.”

Apart from that, Raihan said, there has been no movement from the Indian side on the Teesta water-sharing pact. “India has to take a larger leadership role in the South Asian region and it has to accommodate all issues it has with others with a broad perspective.”

Sharing of the Teesta river water has been a longstanding contentious issue between India and Bangladesh. The river originates from Sikkim and passes through West Bengal before finally merging with Brahmaputra in Assam and Jamuna in Bangladesh.

Dhaka wants 50 per cent share of the river’s water for the December-March period. During his visit to Dhaka in 2015, Prime Minister Modi had promised his Bangladeshi counterpart Sheikh Hasina that the matter will be resolved soon. There has, however, been little progress so far.

Apart from the NRC saga and the pending Teesta water-sharing agreement, Bangladesh is now also concerned that India will restrict movement of people coming into India citing the pandemic, which will impact Bangladeshi migrant labourers, according to sources in Dhaka.

Bangladesh wants India to move faster on projects

India’s own record of implementing projects in its neighbourhood has been “abysmally poor”, which pushes neighbouring countries more towards China, said the sources in Dhaka.

It is no different in Bangladesh where a number of Indian projects have not really taken off or are moving at an extremely slow pace.

While power projects announced by Reliance Power and the Adani Group remain at nascent stages, projects such as Akhaura-Agartala rail link, dredging of inland waterways and construction of India-Bangladesh Friendship Pipeline are all moving at a snail’s pace.

Bangladesh is also miffed with India for not giving a significant push to SAARC and BIMSTEC that would boost regional trading and connectivity. Besides, the Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement has also not been making much progress.

“For the time being, this is mostly a signalling game and relations between India and Bangladesh appear to remain strong and even better than ever before,” said Xavier of Brookings India. “But beyond political slogans of Neighbourhood First or India First, China’s growing influence in Bangladesh is forcing India and Bangladesh to establish an increasingly transactional relationship.”

Recently, in a landmark move last week, the first trans-shipment of goods (iron and pulses) from Kolkata to India’s North-East took place through Bangladesh’s Chittagong port.

Bangladesh is the biggest development partner of India today. India has extended three Lines of Credit to Bangladesh in the last eight years amounting to $8 billion for development of infrastructure in various sectors including roads, railways, shipping and ports.

On Monday, India also granted 10 diesel broad gauge diesel locomotives to Bangladesh. “Bangladesh needs both India as well as China for its economic growth. The Bangladesh government wants more and more foreign funds for many of its infrastructure projects,” Raihan said. “India is our closest neighbour, so our expectations are more from her but it lacks the capacity to implement the projects compared to China, so there are some gaps.”

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