By Zarak Khan | 2026-02-24

China's growing footprint in Bangladesh, including projects near India's sensitive northeastern corridor, is pushing Dhaka's incoming government into an increasingly delicate geopolitical balancing act.

Bangladesh's interim administration has moved ahead with fresh agreements involving China near the Bangladeshi-Indian border, triggering strategic concern in New Delhi and heightening regional sensitivities.

The developments come at a particularly sensitive moment for Bangladesh's new leadership following the February 12 polls. The Bangladesh Nationalist Party (BNP), led by Tarique Rahman, won the election and formed a new government days later.

It faces an early foreign policy test as it tries to manage the expectations of India and China without being drawn deeper into the bitter rivalry between Asia's two largest powers.

On January 27, the Bangladeshi air force signed a pact with China Electronics Technology Group Corporation International (CETC), a state-owned Chinese defense electronics firm, to establish an unmanned aerial vehicle manufacturing and assembly plant in Bangladesh, according to a military announcement posted on X.

The facility will include technology transfer and is expected to "support both military operations ... and disaster response missions," the statement said.

Indian officials are concerned that the facility is planned for Chittagong district, a territory previously allotted for Indian industry.

Chittagong's proximity to India's northeast and to the Bay of Bengal makes a drone factory involving China there a direct threat to New Delhi's strategic and economic interests, in India's view.

In January, Chinese Ambassador to Bangladesh Yao Wen visited the site of the Teesta River Comprehensive Management and Restoration Project, which Bangladesh has been discussing with Beijing. Indian officials have been closely watching Chinese involvement in a sensitive water project near the Bangladeshi-Indian border. About 10 million Indians and 30 million Bangladeshis live in the river's basin.

Last year, China secured a roughly $400 million deal to modernize Bangladesh's Mongla port, giving Beijing another foothold on the Bay of Bengal, a region India considers critical to its security architecture.

India alarmed

Indian policymakers view such Dhaka-Beijing deals as part of China's strategy of encircling India. They are wary of security risks near their sensitive northeastern corridor and the Indian-Bangladeshi 4,096km-long border.

The northeast corridor is the sole land link between the Indian mainland and eight northeastern Indian states.

New Delhi interprets these deals as "part of a broader regional pattern in which Beijing embeds itself within neighbouring countries' military ecosystems through infrastructure, technology transfer, and production facilities," Indian outlet Firstpost reported on January 28.

Since the ouster of longtime Bangladeshi leader Sheikh Hasina in 2024, Chinese companies have invested hundreds of millions of dollars in Bangladesh, Reuters reported on February 6.

India's concerns have grown since the Bangladeshi nationwide protests of 2024, when Hasina, widely viewed as aligned with New Delhi, fled to India. Her overthrow strained Indian-Bangladeshi ties. In turn, India's sheltering of Hasina angered the 2024-2026 Bangladeshi interim government.

Dhaka's overtures to China

That interim administration, led by Nobel laureate Muhammad Yunus, engaged vigorously with China and Pakistan during its year and a half in power.

Yunus made his first overseas visit to China rather than to India, securing $2.1 billion in loans, investments and grants. His journey highlighted Beijing's growing influence in Bangladesh's development trajectory.

"China is steadily building its influence both in the open and behind the scenes, benefiting from the crisis in India-Bangladesh relations," Constantino Xavier, a senior fellow at New Delhi think tank Center for Social and Economic Progress, told Reuters.

Bangladesh has now become "central to China's strategic thinking regarding the Bay of Bengal, and China is increasingly confident that Bangladesh will play a pro-China role in this strategy," Joshua Kurlantzick, a senior fellow at the US-based Council on Foreign Relations, told AFP on February 8.

Dhaka's balancing act

For Bangladesh's incoming government, a difficult balancing act lies ahead. But India remains impossible to ignore in Dhaka.

Following the BNP's February 12 election victory, foreign policy will be guided strictly by "the greater interests of Bangladesh and its people" in dealings with China, India and Pakistan, the BNP's Rahman told reporters.

Stepping up engagement with Beijing does not portend a break with New Delhi because Bangladesh remains heavily dependent on India for trade, connectivity and regional stability, say analysts in Dhaka.

"Bangladesh needs both China and India, and you have to think of it in pragmatic terms," Lailufar Yasmin, a professor of international relations at Dhaka University, told Reuters.

"While ties with China may improve, any party that comes to power will not be imprudent enough to ignore India," she added.