India’s uneasy balancing act in the Bay of Bengal

India's economic engagements in the Bay of Bengal appear to be entering a new phase. On the face of it, there is reason for quiet confidence. Trade volumes through India’s eastern ports are up. Cargo throughput at Visakhapatnam (Andhra Pradesh), Paradip (Odisha), and Haldia (West Bengal) has grown steadily. The signing of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Maritime Transport Co-operation Agreement earlier this year promises to ease regulatory frictions and reduce port costs. For a region long characterised by low trade integration, these are welcome signs.

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And yet, the optimism sits uneasily alongside a deci-sion that has raised more than a few eyebrows. In early April, India withdrew the transshipment facility it had granted to Bangladesh — an arrangement that had allowed Dhaka to route exports through Indian ports to third-country desti-nations. The official explanation was logistical: Indian ter-minals were congested, and delays were hurting export-ers. That may well be true. But in Dhaka, the move was read differently — as a quiet assertion of Indian disapproval, possibly linked to Bangladesh's recent diplomatic overtures toward China. The timing was hardly a coincidence. The announcement came after Bangladesh's interim Chief Ad-viser, in a speech in Beijing, described India’s northeastern States as ‘landlocked’ and cast Bangladesh as the region's maritime lifeline — a claim that did not sit well in New Delhi. Prime Minister Narendra Modi has repeatedly underscored the strategic and economic importance of the Northeast, with Indian Ministers also championing its role in regional connectivity. The suggestion that these States are depen-dent on Bangladesh for maritime access struck a nerve. This came as India has doubled down to position itself as a re-gional integrator. In recent years, New Delhi has invested heavily in port infrastructure through the Sagarmala programme to improve coastal logistics and connectivity. Cargo movement on the east coast has more than doubled in a decade, aided by policy changes such as Goods and Services Tax (GST) cuts on bunker fuel and incentives for coastal shipping. Maritime trade is, by all measures, a na-tional priority.At the regional level, India has sought to rein-vigorate BIMSTEC. The BIMSTEC Maritime Transport Cooperation Ag