New Delhi: More than a decade after New Delhi and Dhaka agreed to establish an Indian-backed economic zone near Bangladesh’s strategically located Mongla Port, the land earmarked for the project has now been allotted to China.
During Bangladesh Prime Minister Tarique Rahman’s first state visit to Beijing, Bangladesh signed an MoU with China Civil Engineering Construction Corporation to develop the China-Bangladesh Mongla Port Economic Zone adjoining the country’s second-largest seaport.
Rahman was present when the Bangladesh Economic Zones Authority (BEZA) signed the MoU on Wednesday, Business Standard reported.
The agreement effectively replaces a project originally reserved for Indian investment under a bilateral initiative launched in 2015 during Prime Minister Narendra Modi’s visit to Dhaka.
The China pact follows the Muhammad Yunus-led interim administration’s decision to delist the proposed Indian economic zone in 2025 after the Indian government-nominated Hiranandani group failed to begin construction within the stipulated two-year period.
According to BEZA officials, China approached Bangladesh in June 2025 on the same economic zone. It was then that the Yunus-led interim administration delisted it, the report added.
Rear Admiral Arif Ahmed Mustafa assumed charge as the new chairman of the Mongla Port Authority at the beginning of this month. The MoU was signed after that.
The development comes at a time when India-Bangladesh ties remain strained, having deteriorated following the ouster of former Prime Minister Sheikh Hasina in August 2024 amid student-led protests.
India signalled its interest in stabilising relations with Tarique Rahman, leader of the Bangladesh Nationalist Party (BNP), who was elected in February 2026.
Despite early diplomatic overtures, relations have remained strained, largely over the contentious issue of illegal immigration. Bangladesh has repeatedly protested against the “push-in” policies advocated by several Indian chief ministers, including Assam Chief Minister Himanta Biswa Sarma.
Why Mongla matters
Mongla is Bangladesh’s second-largest and second-busiest seaport after Chittagong, less than 200 km 188 km from Kolkata and strategically located near the Sunderbans.
Since 2018, Bangladesh has permitted Indian cargo to use both Mongla and Chittagong ports, providing New Delhi with valuable access to its landlocked northeastern states while reducing dependence on the narrow Siliguri Corridor.
The port’s proximity to Kolkata also offers shorter shipping routes and greater logistical flexibility.
The Mongla initiative emerged at a joint declaration during PM Modi’s visit to Dhaka in 2015. The project committed to supporting two economic zones in Bangladesh – one at Mongla and another in Mirsarai near Chittagong, through its Line of Credit programme.
It was a government-to-government (G2G) framework aimed at boosting bilateral trade.
In March 2018, the Indian government nominated the Hiranandani group to develop the land for the Mongla economic zone. In March 2022, BEZA signed an MoU with Hiranandani’s subsidiary, Evita Constructions.
However, according to BEZA officials, the Hiranandani group did not begin construction within two years, and hence the project was delisted, Business Standard reported.
In 2019, India extended $115 million from its line of credit to support the project. BEZA also signed an agreement with Adani Ports, but that failed to take off.
The broader vision extended beyond manufacturing. India financed a railway connecting Mongla Port with Khulna to facilitate trade, while Bangladesh sought to transform Mongla into a modern commercial gateway capable of easing pressure on the congested Chattogram Port.
In May 2024, India secured operational rights to a Mongla Port terminal through a deal involving India Ports Global Ltd.
This was seen as a major strategic move by India to boost trade and counter growing Chinese maritime influence in the Bay of Bengal.
But following the fall of the Sheikh Hasina government in 2024, the project did not take off.
China’s expanding footprint
This is not the first time that a project allotted to India has been reassigned to China.
In February, Bangladesh cancelled the land allotment for an SEZ in Chittagong to India and gave it to China to set up a drone manufacturing facility. China was also to transfer drone technology to Bangladesh.
Bangladesh joined China’s Belt and Road Initiative (BRI) in 2016, and Chinese investment has steadily expanded across its transport, energy and industrial sectors.
Bangladesh occupies a strategically important position in China’s regional and global ambitions. Located on the eastern flank of the Indian Ocean, it is a key partner in Beijing’s BRI, President Xi Jinping’s flagship infrastructure and connectivity programme aimed at expanding China’s economic and geopolitical influence.
Bangladesh was the first South Asian country to formally join the BRI.
China has been Bangladesh’s largest trading partner. It is also Bangladesh’s principal defence partner, supplying nearly three-quarters of its arms imports between 2019 and 2023, according to a SIPRI report.
Beijing has also played a central role in modernising Bangladesh’s naval capabilities, including the construction of the BNS Sheikh Hasina naval base near Chittagong, the delivery of two submarines, and the supply of several frigates and corvettes.
Beyond Mongla, Beijing has backed industrial parks, port infrastructure and manufacturing zones throughout Bangladesh.
During Rahman’s visit, Bangladesh also signed agreements for another Chinese-backed industrial zone in Anwara near Chittagong, alongside investment promotion accords designed to attract additional Chinese capital.
(Edited by Sugita Katyal)
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