During the four consecutive terms of the Sheikh Hasina led Awami League government in Bangladesh, energy cooperation between India and Bangladesh has enhanced manifold.[1] India and Bangladesh are both developing countries with tremendous energy requirements. Despite India’s own energy supply constraints, India began exporting its surplus electricity to Bangladesh in 2013. Bangladesh first initiated importing 500MW electricity from India in October 2013.[2] At present, Bangladesh is importing a total of 1160 MW electricity from India which constitutes 9% of total power generation in Bangladesh.[3] Additionally, recently in 2023, the first Indo-Bangla Friendship Pipeline was opened to provide Bangladesh with uninterrupted supply of diesel from India. The new pipeline is expected to lower electricity production and transportation cost in Bangladesh as well as create a new market for India’s petroleum products. Moreover, India intends to export coal to Bangladesh. In addition to cross-border energy trade, India and Bangladesh have successfully completed the Maitree Super Thermal Power Project in Bagerhat, Bangladesh, financed under the Indian government’s concessional financing schemes. Energy cooperation between India and Bangladesh has entered a new era.

Given this context, the commentary intends to analyze the dynamics of heightened India Bangladesh energy cooperation and investigate why India—with its own fragile energy security heavily dependent on importing energy from foreign countries and unable to meet it growing demand for energy with domestic production—is interested in assisting Bangladesh achieve energy security? The commentary piece argues that intensified Bangladesh-India energy cooperation is the manifestation of Bangladesh’s increasing geopolitical importance to India, and the surge of geopolitical significance of South Asia amid renewed great power rivalry in international politics.

Great Powers’ Scramble for Bangladesh

Bangladesh is in dire need of international cooperation in its energy sector. Since energy is crucial to socio-economic development, the demand for energy is rapidly growing to accommodate Bangladesh’s expanding economy. To meet the growing demand for energy, the country is looking for international partnerships to attract investment, expertise and technologies. Ironically, this sector has emerged as a strategic sector and partnership is being affected by heightened geopolitical competition of the great powers. In this new geopolitical age, great powers consider Bangladesh as both an investment destination as well as a strategic outpost, and energy is being viewed as a strategic resource to woo Bangladesh. Bangladesh’s location in the Bay of Bengal makes it an Indian Ocean littoral and great power rivalry is brewing in the Indian Ocean region making it a geopolitically significant site for competition. Consequently, China has its ambitious Belt and Road Initiative (BRI) projects; Russia has been maneuvering its nuclear energy technology to increase its footprint in the region;[4] and the US has been urging Asia-Pacific countries to anchor its Indo-Pacific Strategy (IPS). India is also aiming to fulfil its regional ambitions by increasing energy ties with neighboring countries.

India's energy cooperation with Bangladesh represents the realization of India's geopolitical objectives in the country. This collaboration is not solely focused on enhancing bilateral economic ties; it primarily serves strategic purposes. One needs to revisit the context and the time in which India extended its energy cooperation to Bangladesh. The 2010s were a period in which great power rivalry was particularly conspicuous. During this period, great powers began to engage in a geopolitical battle on different fronts. It was in October 2013, when India,[5] decided to export electricity to Bangladesh when elections were due in January 2014. It was anticipated that exporting electricity would bring economic benefits to India, but the timing, particularly around election periods, holds significance. Since winning the national election of 29 December 2008, Prime Minister of Bangladesh, Sheikh Hasina, reviewed the direction of the country’s longstanding anti-India foreign policy. This shift resulted in an ‘India-positive foreign policy’, characterized by Bangladesh’s proactive cooperation with India on various fronts. This included countering insurgency challenges in India’s northeast region, combating terrorism, resolving land boundaries and enclave issues, and discussing transit, among others.[6] It is worth mentioning here that it was in September 2013 when China announced its massive economic development project, Belt and Road Initiative (BRI). Again, Japan announced the Bay of Bengal Industrial Growth Belt (BIG-B) plan in 2014 where supplying reliable energy and power for industries remained a major objective. During Japanese Prime Minister’s visit to Bangladesh in September 2014, Bangladesh agreed to cooperate with Japan under the BIG-B initiative.[7] In the same year, it was reported that Japan International Cooperation Agency (JICA) will provide a loan to the government of Bangladesh to construct a 1200 MW coal-fired power plant at Matarbari on Maheshkhali Island in Cox's Bazar.[8] In 2016, Japan assisted the government of Bangladesh prepare the Power System Master Plan. Bangladesh also joined the Chinese-led BRI in 2016 and is the second-largest recipient of Chinese loans among South Asian countries under this initiative.

During the Chinese Premier’s visit to Bangladesh in 2016, China and Bangladesh signed 26 deals and MOUs, and China put forward a series of investment proposals including a power grid network strengthening project and the construction of the Payra 320 MW coal-based Thermal Power Plant.

In the same year, India decided to trade an additional 100MW to Bangladesh in March. Shortly after the Chinese President’s visit to Bangladesh, Bangladeshi Prime Minister Sheikh Hasina visited India in April 2017 and India proposed huge investments in the development of power and energy sector of Bangladesh. During that visit, the commencement of construction on the long-pending, controversial Rampal Power Plant was finalized and debt financing was signed. Besides, in 2017, an agreement was signed between India and Bangladesh to import high speed diesel from India to Bangladesh through a pipeline which was later named Indo-Bangla Friendship Pipeline. Prior to this, Bangladesh signed a deal with China to construct an oil pipeline in December 2016 as energy pipelines are a significant component of BRI.

Bangladesh also began to construct its first nuclear power plant, Rooppur power plant, with Russian assistance in 2017. As Bangladesh needs immense foreign investment in its power and energy sector, the US is also interested in investing to help Bangladesh construct a gas pipeline to establish smart grid connections across the country.[9]

India Bangladesh Energy Ties Driven by India’s Geopolitical Interest

Therefore, Bangladesh, given its renewed geopolitical significance in the present era, has become a battleground for influence among great powers vying for control over the region. They are leveraging economic tools to garner strategic support from Bangladesh. Energy has been used as a strategic tool to win over Bangladesh. Although the US and China are engaged in a geopolitical battle to increase their politico-economic clout in Bangladesh, it is believed that India is maintaining an upper hand by capitalizing on Bangladesh’s current government’s close ties with India. Without a regional power-sharing structure in place, the ruling regimes of both

India and Bangladesh recognize that regional energy cooperation has the potential to be a game-changer, elevating bilateral relations to a new level. India is also enticing Bangladesh to create a regional power sharing mechanism including Nepal and Bhutan. Besides being neighboring countries, India and Bangladesh share cultural ties—history, heritage, language, art, music, etc. Such a sense of affinity allows India to keep Bangladesh within its sphere of influence.

In conclusion, global great power rivalries have heightened the geopolitical importance of South Asia and have nudged countries in the region to carefully balance their partnerships. As most South Asian countries are economically vulnerable and need economic cooperation, these great powers are vying to enhance their sphere of influence over these countries by resorting to economic tools.

Energy cooperation has emerged as the most strategic component within the realm of bilateral economic relations and great powers are offering energy insecure countries, like Bangladesh, lucrative energy projects. India-Bangladesh energy cooperation illustrates the increasing geopolitical importance of Bangladesh to India. This is highlighted by the fact that India began to support Bangladesh’s energy sector despite its own lack of energy security taking into consideration the changing geopolitical dynamics of South Asia with the objective of competing with other great powers in its neighborhood. The timing and context of different deals and understandings on energy cooperation between the two countries validate India’s competition with other major powers, especially China. Therefore, this piece argues that India’s assisting Bangladesh in the energy sector was aimed at mainly thwarting Chinese influence over the strategic resource. Thus, India-Bangladesh energy cooperation is not exclusively shaped by the latter’s development and growth needs, but driven by the geopolitical concerns of regional and extra regional great power competition.

In conclusion, Bangladesh reaps the benefits of great powers’ scramble to woo the South Asian nation. The country has consistently pursued a pragmatic foreign policy approach, engaging with all nations involved. Many scholars view Bangladesh’s stance in the great power rivalry as hedging or balancing, but the foreign policy motto of Bangladesh— “friendship to all, malice towards none”—has been instrumental in navigating its bilateral relations with the great powers. The foreign policy of Bangladesh is entwined with its development needs and outlook which prefers multi-engagement.[10] Given the development needs of Bangladesh, the country cannot afford to practice favoritism toward any one foreign country or alliance. The great powers can offer development cooperation in the energy sector of Bangladesh, and Bangladesh must assess the development opportunities through a political economy perspective. The policymakers of Bangladesh need to understand that development cooperation in its energy sectors also caters to increasing the geopolitical clout of that very development partner in Bangladesh.