New Delhi’s trade and investment ties with Dhaka may have entered a period of uncertainty after Bangladesh Prime Minister Sheikh Hasina resigned following weeks of violent protests, and the Army Chief proclaimed that an interim administration will now manage the country.
Bangladesh is India’s 25th largest trading partner, accounting for $12.9 billion in bilateral trade. Exports dominate the commerce, with Bangladesh ranking eighth among India’s export partners. In FY24, India’s exports to Bangladesh fell 9.5% to $11 billion.
India’s exports, such as onions, other agricultural items, and energy, are critical to the people and economy of Bangladesh and may be unaffected by the upheaval.
Bangladesh’s economic woes have had a severe influence on bilateral commerce in recent years. Bangladesh has been experiencing a severe dollar shortage, limiting its capacity to import commodities, especially those from India. Rising inflation in the country has diminished domestic demand, resulting in lower consumption of both local and imported products.
India’s imports from Bangladesh fell 8.7% to $1.8 billion in 2023-24. Iron and steel materials, textiles, and leather goods are among the most common inbound shipments.