Bangladesh After Hasina: Yunus, India, and South Asia's New Fault Line

Executive Summary

Bangladesh has completed its post-Hasina transition on paper. A general election held on February 12, 2026, the first since Sheikh Hasina's ouster in the July 2024 student uprising, returned power to an elected government under Tarique Rahman of the Bangladesh Nationalist Party, closing an eighteen-month interim period led by Nobel laureate Muhammad Yunus. On the surface, this looks like a return to democratic normalcy that should allow India, Bangladesh's most consequential neighbor, to rebuild a relationship badly damaged by Hasina's fall and the anti-India tenor of the interim government that followed her.

The deeper story is that the interim period did lasting structural work that an election result cannot easily undo. Under Yunus, Bangladesh resumed direct trade and military-to-military dialogue with Pakistan for the first time since the 1971 war of independence, deepened Chinese investment and infrastructure engagement, and, most consequentially, invited Chinese participation in the Teesta River management project that India had failed to deliver despite three decades of promises. Tarique Rahman's government, elected on a platform of restoring correct relations with India, has nonetheless continued this trajectory rather than reversing it: his first major foreign visit went to Beijing, not New Delhi, and produced exactly the Teesta breakthrough with China that India's own domestic politics - specifically, opposition from West Bengal's state government - had blocked for a generation. Bangladesh has, in effect, used its post-Hasina realignment to extract from China a strategic asset India could not or would not provide, in a river basin that sits astride the Siliguri Corridor, the narrow strip of land connecting India's mainland to its northeastern states. This is South Asia's new fault line: not a formal alliance shift, but a demonstrated willingness by Dhaka to leverage Beijing against New Delhi on the single most sensitive piece of geography in the bilateral relationship.

Strategic Background

India and Bangladesh's relationship has historically been anchored in the memory of 1971, when India's military intervention was decisive in Bangladesh's liberation from Pakistan, and in the subsequent decades-long partnership between New Delhi and Sheikh Hasina's Awami League, which India came to view as its most reliable strategic partner in South Asia. This closeness became a liability once Hasina's government grew visibly authoritarian and was toppled amid mass unrest in which credible estimates put the death toll near 1,400. India's decision to grant Hasina refuge, and its reluctance to distance itself from her legacy, fed a narrative inside Bangladesh that New Delhi had backed an increasingly repressive regime against its own people, a narrative Yunus's interim government did little to discourage and, at points, actively amplified.

Historical Context

Bangladesh's relations with Pakistan have carried the weight of 1971's atrocities for over five decades, with Dhaka's continued demand for a formal Pakistani apology remaining unresolved. Yunus's interim government broke with this history in tangible ways: a September 2025 visit by Pakistani Foreign Minister Ishaq Dar sought to reinvigorate ties, and by February 2026 the two countries had resumed direct trade for the first time since the war, alongside restored direct flights after a fourteen-year gap and the initiation of military-to-military dialogue. China's relationship with Bangladesh has followed a different but equally consequential arc: despite having backed Pakistan during the 1971 war, Beijing established diplomatic ties with Dhaka in 1975 and has since maintained cordial relations irrespective of which party governs, extending economic cooperation through both the Hasina and Yunus periods and emerging as Bangladesh's second-largest arms supplier over the decades.

Current Situation Assessment

The February 2026 election produced a result India can live with but did not fully welcome. With the Awami League formally barred from contesting - its political activities suspended in May 2025 and its registration suspended by the election commission, following Hasina's own November 2025 conviction and death sentence for crimes against humanity, delivered in absentia from India - the contest narrowed to the BNP and Jamaat-e-Islami. The BNP's Tarique Rahman emerged as prime minister, a historically difficult outcome for New Delhi given the party's traditionally hostile posture toward India, but one analysts widely regard as the least damaging plausible result given Jamaat-e-Islami's simultaneous historic surge, concentrated in constituencies along India's border, a geographic pattern New Delhi's security establishment reads as a structural rather than incidental concern.

India moved quickly to signal a reset: Lok Sabha Speaker Om Birla attended Rahman's swearing-in and delivered a personal letter from Prime Minister Modi inviting Rahman to visit, and Modi followed with a formal invitation letter congratulating Rahman on his victory. Bangladesh's foreign minister Khalilur Rahman visited New Delhi in early April for talks covering visa services, energy cooperation, border management, river water-sharing and trade facilitation, and India's high commissioner has continued regular engagement with the new government on connectivity, technology and energy cooperation. Yet six months into Rahman's tenure, no Rahman-Modi summit has taken place, and Rahman's first major foreign trip, in late June, went to Malaysia and China rather than India, a sequencing choice regional analysts read as significant regardless of Dhaka's public insistence that it reflects no anti-India intent.

The substantive result of that Beijing visit was an agreement to advance the Teesta River Comprehensive Management and Restoration Project, discussed directly with China's water resources minister, marking a transition from the political intent Beijing had signaled as early as 2020, when Bangladesh sought a several-hundred-million-dollar loan for the project, to what analysts describe as actual implementation. This is the single most consequential development covered in this report: fifteen years of India-Bangladesh negotiations on Teesta water-sharing, repeatedly stalled by opposition from West Bengal's state government under Mamata Banerjee, have been effectively bypassed by a Chinese-backed alternative that Dhaka's farmers and voters can now point to as tangible progress India never delivered.

Power Center Analysis

Bangladesh's post-election politics now revolve around three power centers. The Rahman government and the BNP apparatus, led by a prime minister whose own father, General Ziaur Rahman, built the party's historical closeness to China and the United States, giving the current tilt toward Beijing a generational continuity rather than a purely tactical character. Jamaat-e-Islami, whose electoral surge along the Indian border represents a genuinely new structural factor in Bangladesh's domestic politics, one likely to keep the country's Islamist current more institutionally represented than at any point in recent decades. And the residual Awami League and Hasina factor, with the former prime minister continuing to make political statements from her refuge in India, a continued irritant that Bangladesh's government cites as an active threat to domestic stability and that complicates any full normalization with New Delhi until some resolution, extradition or otherwise, is found for the Hasina question.

Military and Security Implications

Bangladesh's resumption of military-to-military dialogue with Pakistan, however limited in current substance, is being watched closely by India's security establishment given the historical sensitivity of any Bangladesh-Pakistan defense cooperation along India's eastern flank. China's status as Bangladesh's principal arms supplier for decades, including reported discussions of fighter jet purchases raised by Yunus during his China visit, reinforces a longer-term pattern in which Bangladesh's military modernization increasingly runs through Beijing rather than through any Western or Indian channel. For India, the geographic reality that concerns strategic planners most is the proximity of the Teesta basin, and Chinese infrastructure investment more broadly through projects such as the Mongla Port modernization, to the Siliguri Corridor, the roughly twenty-two-kilometer-wide strip of Indian territory that is the sole land connection between the Indian mainland and its northeastern states. Any expansion of Chinese economic or infrastructure presence in this immediate vicinity carries security implications well beyond the civilian, livelihood-focused framing both Dhaka and Beijing have publicly emphasized.

Economic and Trade Impact

Bangladesh's economic diplomacy under both Yunus and Rahman has diversified deliberately away from exclusive reliance on India. The Yunus government secured approximately 2.1 billion dollars in Chinese investments, loans and grants, alongside a U.S. trade deal concluded just three days before the February election, both agreements signed by an unelected caretaker government in a sequencing that critics argue was designed to lock in commitments before an elected government could revisit them. The Teesta agreement with China, still at the feasibility-study stage as of mid-2026 but elevated to centerpiece status during Rahman's Beijing visit, represents the most economically and politically significant of these arrangements, promising dredging, flood control, irrigation infrastructure and river-based economic development across more than a hundred kilometers of the basin. For India, the economic dimension of this shift is compounded by the fact that Bangladesh remains one of India's most important regional trade partners, meaning New Delhi cannot simply disengage in response to Dhaka's diversification without damaging its own economic interests in the relationship.

Diplomatic Positioning

Both Dhaka and Beijing have taken care to frame the Teesta cooperation and broader China-Bangladesh engagement in terms designed to avoid the appearance of deliberate provocation toward India, with Chinese officials describing the project as a livelihood initiative that should be free from third-party influence and Rahman's government stressing continuity and correctness in its dealings with New Delhi even as it deepens ties with Beijing. India, for its part, has adopted a posture that avoids public confrontation while working multiple tracks simultaneously - ministerial visits, high commissioner engagement, and Modi's personal outreach to Rahman - in an effort to prevent the relationship from hardening into open estrangement, even as it recalibrates its own regional posture, including a changed political landscape in West Bengal following the BJP's assumption of state government there, which analysts note removes one of the historical domestic obstacles to India delivering its own Teesta arrangement, possibly too late to matter now that China has stepped in.

Regional Fallout

The most immediate regional fallout is the erosion of India's assumption that a newly elected South Asian leader will treat New Delhi as an automatic first destination, a diplomatic convention Rahman's Beijing-first itinerary has visibly broken. This has second-order implications for how India approaches its broader neighborhood policy, particularly toward other South Asian states such as Nepal, Sri Lanka and the Maldives, where similar dynamics of hedging between India and China have played out in recent years. The continued Rohingya refugee burden in Cox's Bazar, compounded by instability in Myanmar, remains a persistent regional stress point that both China and, more distantly, India have offered assistance in managing, without any comprehensive resolution in sight. Domestically within India, the political optics of Bangladesh's Islamist surge and its border-adjacent concentration are likely to feature in the ruling party's own messaging on border security and migration, reinforcing an already prominent theme in India's domestic politics.

Global Strategic Consequences

Bangladesh's post-Hasina realignment offers a broader lesson about the durability of great-power competition's effects on middle-sized states even after a change in government: an eighteen-month interim administration was sufficient to reset Bangladesh's economic and infrastructure relationships with China and Pakistan in ways that a subsequent elected government, despite explicit campaign commitments to restore ties with India, has shown limited appetite or capacity to reverse. This illustrates a pattern relevant well beyond South Asia - that windows of political transition, however brief, can produce structural realignments that persist regardless of the electoral outcome that follows, a dynamic China in particular has shown skill at exploiting through infrastructure commitments that create facts on the ground faster than diplomatic relationships can be rebuilt.

Risk Matrix

The highest-probability risk over the coming year is continued drift rather than dramatic rupture: India and Bangladesh maintain correct, functional diplomatic relations at the ministerial level while China continues to deepen its Teesta and broader infrastructure engagement, without any full Rahman-Modi summit resolving the underlying tension. A medium-probability risk is that the unresolved Hasina extradition question becomes a recurring flashpoint, particularly if Bangladesh's government faces domestic pressure to escalate its demands publicly, straining the working-level cooperation both sides have maintained so far. A medium-probability risk tied to Jamaat-e-Islami's electoral gains is a gradual shift in Bangladesh's domestic political center of gravity that produces friction with India over border security, religious minority treatment, or cross-border movement, issues Jamaat's border-concentrated support base is likely to keep salient. A lower-probability but strategically significant risk is that Chinese infrastructure investment in the Teesta basin and surrounding areas expands to a scale that meaningfully increases Beijing's economic and political leverage in immediate proximity to the Siliguri Corridor, a development India's security establishment would treat as a serious escalation regardless of the civilian framing attached to it.

Scenario Analysis

Base Scenario (High probability): Bangladesh continues a multi-alignment posture, maintaining correct diplomatic relations with India through ministerial channels and infrastructure cooperation on connectivity and energy, while simultaneously deepening the Teesta partnership and broader economic ties with China and normalized relations with Pakistan. No full Rahman-Modi summit occurs in the near term, and the Hasina question remains unresolved but does not escalate into open rupture.

Bull Scenario for India (Low-medium probability): Domestic political and economic pressures push Rahman toward a genuine reset with New Delhi, potentially including a face-saving resolution to the Hasina extradition question, a substantive Rahman-Modi summit, and a competing Indian-backed alternative or complement to the Teesta project that restores India's role in a river basin critical to its own security calculus.

Bear Scenario for India (Medium probability): Chinese investment and influence in Bangladesh continue to deepen at a pace India cannot match given its own domestic political constraints, Jamaat-e-Islami's border-region influence grows further, and the combination produces a Bangladesh whose strategic orientation, while formally non-aligned, functions in practice as increasingly China-leaning on infrastructure and Pakistan-leaning on security dialogue, structurally weakening India's traditional influence in its most historically important South Asian relationship.

Intelligence Forecast (6-24 Months)

Expect continued incremental progress on the Teesta feasibility study with China, with construction-phase decisions likely to follow within the forecast window given the political momentum both governments have attached to the project. Expect continued but modest deepening of Bangladesh-Pakistan trade and limited military dialogue, unlikely to escalate to a level that would constitute a formal security partnership given Bangladesh's continued economic dependence on broader Western and Indian market access. Expect India to continue pursuing ministerial-level engagement and connectivity initiatives with Bangladesh while withholding a full leader-level summit pending some movement on the Hasina question. Expect Jamaat-e-Islami to continue consolidating its parliamentary presence and to press for greater influence over Bangladesh's domestic religious and social policy, a trend India will monitor closely for cross-border security implications. Expect continued Chinese framing of its Bangladesh engagement as apolitical and livelihood-focused, a framing India is unlikely to accept privately even as it avoids public confrontation over it.

Final Strategic Takeaway

Bangladesh's return to elected government has restored the form of India-Bangladesh diplomatic normalcy without restoring its substance. The interim period's structural realignment toward China and Pakistan has proven more durable than India likely anticipated, and Tarique Rahman's government, despite genuine efforts at diplomatic correctness with New Delhi, has shown no willingness to reverse the economic and infrastructure commitments made during the Yunus period, instead building on them. The Teesta agreement with China is the clearest single marker of this shift: a strategic asset India promised for thirty years and never delivered has now been claimed by Beijing, in a river basin whose geography places it uncomfortably close to India's most sensitive connective infrastructure.

Global Chanakya Assessment

The consensus narrative in Indian commentary has treated Rahman's Beijing-first foreign trip as either a calculated snub or a temporary posture that will soften once bilateral irritants such as the Hasina question are resolved. Global Chanakya's independent judgment is that this narrative underestimates the structural, rather than merely tactical, character of the shift. Rahman is not improvising a China tilt; he is continuing a foreign policy lineage that traces back to his own father's presidency, when the BNP's founding orientation favored close relations with both China and the United States as a deliberate counterweight to Indian influence. Expecting Rahman to voluntarily abandon this lineage in favor of a "return" to Indian primacy misreads the party's own strategic culture.

The underreported development most worth flagging is the domestic political utility, inside Bangladesh, of pointing to Chinese delivery on Teesta against thirty years of Indian non-delivery. This is not simply a diplomatic snub; it is a genuinely popular domestic talking point in Bangladesh's northern agricultural districts, one Rahman's government has every incentive to keep highlighting regardless of the state of ties with New Delhi. Indian policymakers who treat this purely as a security problem to be managed through defense and border channels risk missing that its root cause is an unresolved developmental grievance that India, not China, had the first and best opportunity to address.

A contrarian judgment worth registering: while Indian security commentary has focused heavily on the proximity of Chinese-backed Teesta infrastructure to the Siliguri Corridor, the more precise risk is not a sudden Chinese military or coercive leverage play through this specific project, which remains at a civilian feasibility stage, but the slower erosion of India's default assumption of primacy in Bangladesh's domestic political economy. The hard security risk around the Siliguri Corridor is real but distinct, and conflating the two risks producing an Indian policy response calibrated to the wrong threat.

A second hidden driver deserving attention is the timing of the U.S.-Yunus trade deal signed three days before the February election, a sequencing several regional analysts have flagged as troubling given that it bound an elected successor government to commitments made by an outgoing caretaker administration. This sets a precedent India should watch closely in its own dealings with transitional governments in the neighborhood, since similar last-minute agreements elsewhere in South Asia could similarly constrain successor governments regardless of electoral outcomes.

The single most important indicator for India to track over the coming year is not any statement from Dhaka but the pace of construction-phase decisions, rather than mere feasibility studies, on the Teesta Comprehensive Management and Restoration Project: the shift from planning to physical works in the basin will be the clearest sign of how quickly Beijing's presence in this sensitive geography is consolidating.

Strategic Opportunities for India

India's risks are considerable and concentrated: the loss of Teesta primacy to China in a basin adjacent to the Siliguri Corridor, continued military-to-military normalization between Bangladesh and Pakistan, and the structural growth of Jamaat-e-Islami's influence in border-adjacent constituencies. India's opportunities lie in accelerating, rather than abandoning, its own Teesta engagement now that the domestic West Bengal political obstacle has partially eased with a change in state government, offering Bangladesh a competing or complementary Indian-backed alternative before Chinese construction work forecloses the option; in leveraging continued ministerial-level goodwill to advance connectivity, energy and trade initiatives that give Bangladesh's government tangible near-term wins attributable to India rather than China; and in using visa facilitation and people-to-people initiatives, already under discussion, to rebuild the underlying public goodwill that eroded sharply after 2024. For Indian foreign policy, the imperative is to decouple engagement with Bangladesh from resolution of the Hasina question, since insisting on the latter as a precondition for the former risks ceding further ground to China in the interim. For Indian defence planning, continued monitoring of Chinese infrastructure and arms-supply relationships with Bangladesh, particularly anything in reasonable proximity to the Siliguri Corridor, should remain a standing priority regardless of the civilian framing attached to individual projects. For Indian businesses, opportunities remain in trade facilitation, connectivity infrastructure and energy cooperation, sectors where India retains genuine comparative advantages over Chinese alternatives if pursued with greater urgency than shown over the past decade.

Strategic Opportunities for the Global South

Bangladesh's experience offers other small and middle powers navigating great-power competition a demonstrated template: leveraging a period of political transition to extract commitments from a secondary great-power patron, in this case China, on projects a traditional regional power, India, had promised but failed to deliver. This lesson carries direct relevance for ASEAN states navigating similar India-China-United States triangulation, for African states weighing competing Chinese and Western infrastructure offers, and for Middle Eastern and Latin American states managing their own multi-alignment strategies amid intensifying great-power competition. The broader pattern - that unresolved developmental promises by traditional regional partners create openings that rival powers are quick to fill - is a dynamic with implications well beyond South Asia's own regional dynamics.

Indicators to Monitor

• Progress of the Teesta River Comprehensive Management and Restoration Project from feasibility study to construction phase
• Whether a full Tarique Rahman-Narendra Modi summit takes place, and its outcomes if it does
• Developments on Bangladesh's extradition request, if formalized, regarding Sheikh Hasina
• Scale and terms of any further Bangladesh-Pakistan military-to-military engagement
• Chinese arms sales or defense cooperation agreements with Bangladesh, including any fighter jet procurement
• Jamaat-e-Islami's parliamentary conduct and any policy shifts on religious or social legislation
• India-Bangladesh visa service resumption and border management agreements
• Chinese investment flows and infrastructure announcements near the Siliguri Corridor and Mongla Port
• West Bengal state government's position on any renewed Indian Teesta water-sharing proposal
• Rohingya refugee flows into Cox's Bazar and any shifts in Myanmar-related instability

FAQ

Who governs Bangladesh now?
Tarique Rahman of the Bangladesh Nationalist Party became prime minister following the February 12, 2026 general election, ending the eighteen-month interim government led by Muhammad Yunus.

Why did India's relationship with Bangladesh deteriorate?
India's historically close ties to Sheikh Hasina's Awami League, and its decision to shelter her after her ouster, fed a narrative within Bangladesh that New Delhi had backed an increasingly authoritarian government against its own people.

What is the significance of the Teesta River agreement with China?
China has agreed to advance a river management project that India promised for roughly three decades but could not deliver due to domestic political opposition, in a basin located near India's strategically sensitive Siliguri Corridor.

Has Bangladesh's relationship with Pakistan actually changed?
Yes, the two countries resumed direct trade and flights and initiated military-to-military dialogue for the first time since the 1971 war, though the relationship remains limited in scale.

Is Sheikh Hasina likely to be extradited from India?
There is no clear indication of imminent extradition; the unresolved question continues to complicate full normalization between the Rahman government and New Delhi.