Economic Relations with Bangladesh: China’s Ascent and India’s Decline

Since 1971, India was the major trading partner of Bangladesh. However, China’s trade with Bangladesh has increased manifold in recent years to surpass India from 2004 onwards. This slowing down and change of economic relations between India and Bangladesh, coupled with strained and uncertain political relations, raise multiple concerns. This article examines the various factors that have contributed to China’s growing presence in Bangladesh as compared to India’s decline with respect to trade and investment. India has clearly lost out to China in many important industries. While reviewing and assessing recent developments, the study also presents a strategy to counter India’s declining economic influence in Bangladesh.