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India’s recent decision to terminate the trans-shipment facility that allowed Bangladesh to export goods to third countries via Indian territory has triggered sharp reactions. Some call it a “tight slap,” others call it bullying. But beneath the headlines and nationalist fervor lies a far more calculated strategic maneuver, one that blends geography, economics, and realpolitik into a single chess move.
At the core of the matter is this: India allowed Bangladesh to move cargo to destinations like Nepal and Bhutan through Indian ports and land routes, an arrangement that helped reduce the cost and time for Bangladeshi exporters. That facility is now withdrawn.
What changed?
A provocative statement in Beijing by Nobel laureate Muhammad Yunus may have been the trigger. At a high-level roundtable in China, Yunus referred to India’s northeastern states as “landlocked” and described them as a region that could become “an extension of the Chinese economy.” For a nation acutely aware of its territorial integrity and regional vulnerabilities, this was not just poor diplomacy; it bordered on provocation.
But to frame India’s response merely as a reaction to one man’s words would be missing the forest for the trees.
The Geography of Influence
India’s Northeast has always been strategically sensitive. Connected to the mainland through the narrow Siliguri Corridor, often referred to as the “Chicken’s Neck”, this region is bordered by several countries, including China, Bhutan, Myanmar, and Bangladesh. Ensuring its integration into the national economy is not only an infrastructure challenge but also a geopolitical necessity.
When a prominent figure from a neighboring country speaks in Beijing about extending the Chinese economy into this space, India has little choice but to respond. Words, especially in diplomacy, are not harmless.
Bangladesh’s China Embrace
Bangladesh’s increasing economic and infrastructural engagement with China has been both a survival strategy and a geopolitical gamble. Like many countries in the Global South, it has leaned on Chinese financing for large-scale infrastructure projects; roads, bridges, ports.
But debt, like diplomacy, comes with strings. And when nations become indebted, influence follows.
As China deepens its foothold in Bangladesh, India’s leverage naturally diminishes. Blocking trans-shipment routes may be New Delhi’s way of redrawing the lines, reminding Dhaka that proximity has a price, and that India still holds critical logistical cards.
Trade, Not Punishment
Despite the optics, this move should not be seen purely as punitive. It is also about trade strategy. Protecting domestic manufacturing, reducing leakage, and reasserting control over sensitive borders are all valid motivations in today’s shifting global supply chains.
With free trade increasingly weaponised, countries are recalibrating. If Bangladesh’s trade is seen as being co-opted by Chinese supply chains, then India has every right to scrutinise how its infrastructure is used to facilitate that.
The Nepal-Bhutan Angle
An overlooked aspect of the decision is how it impacts Nepal and Bhutan, two countries with deep cultural and diplomatic ties to India, and also under increasing Chinese gaze.
By blocking Bangladesh’s access to these markets via India, New Delhi is sending a message not just to Dhaka but to Kathmandu and Thimphu as well: alignments have consequences. If Bangladesh aligns its foreign policy more overtly with Beijing, it cannot expect unqualified access to Indian land for its trade ambitions.
This is not coercion. This is geopolitics at play.
Strategic Signalling, Not Isolation
To be clear, this is not about isolating Bangladesh. India and Bangladesh share one of the longest international borders in the world. Trade, water sharing, and people-to-people ties remain robust. But like in any relationship, there are red lines.
India’s message here is less about trade disruption and more about recalibrating diplomatic respect. One does not flirt with China in Beijing by questioning Indian sovereignty and expect silent acquiescence.
At a time when the Indo-Pacific is becoming the fulcrum of global power play, and with China aggressively expanding influence across South Asia, India cannot afford strategic ambiguity. Nor can it let soft provocations pass unanswered.
What Lies Ahead
In the near term, Dhaka will likely engage in damage control. The economic pinch of this restriction will be felt, especially by sectors dependent on regional exports. But the larger impact will be psychological: it reminds Bangladesh that India is not passive, nor predictable.
For India, this moment must be used not just to assert, but also to engage. Diplomatic backchannels must remain open. Infrastructure investments in the Northeast must accelerate. And India’s vision for the region must be as much about connectivity and opportunity as it is about security.
A New Regional Doctrine?
What we are witnessing may be the early signs of a new Indian regional doctrine; assertive, unapologetic, and willing to play economic cards for strategic ends. This is not aggression; it is the maturation of Indian diplomacy in an age where influence is exerted through ports, pipelines, and policy more than through parades.
The withdrawal of the trans-shipment facility is not a tantrum. It is a reminder that the road to Nepal and Bhutan runs through India, and so does the respect for Indian sovereignty.
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