The recent revival of the Joint Economic Commission (JEC) between Bangladesh and Pakistan could appear on the surface as a sign of diplomatic normalisation and economic pragmatism. Yet, beneath the diplomatic veneer, the move carries far more risk than potential reward for Dhaka. Simultaneously offers tangible strategic and economic advantages for India. For New Delhi, the wave of optimism emerges not from the Bangladesh-Pakistan exercise per se, but from how the calculation reinforces India’s deep-rooted advantages and the fragility inherent in the bilateral experiment between its neighbours.
Bangladesh’s decision to engage with Pakistan comes at a time when Islamabad’s economy is under serious strain. Pakistan’s growth rate is estimated at around 3.5 per cent, inflation above 21 per cent, and foreign reserves below US$4 billion. While external debt repayments ahead exceed US$75 billion over the next few years. The World Bank describes Pakistan’s economy as facing “pressures of unmanageable proportions.” By contrast, Bangladesh boasts a GDP of approximately US$411 billion, export earnings of US$52 billion and reserves standing near US$31 billion. Engaging economically with a partner whose structural fundamentals are severely weak is more emblematic than strategic, and it signals that Bangladesh may be prioritising political signalling over robust economic logic.
The tangible economic benefits for Dhaka look modest at best. In the 2025 fiscal year, Bangladesh imported about US$787 million from Pakistan, while its exports to Pakistan were only roughly US$80 million—mainly jute and yarn. Meanwhile, Pakistan’s offers, such as allowing Bangladesh to use the Karachi Port for regional trade with China and Central Asia, which are hampered by Pakistan’s own logistics inefficiency, debt-burdened port infrastructure and under-performing networks. The political nostalgia around a revived Bangladesh-Pakistan economic dialogue disguises a thin foundation of actual transformative cooperation.
From India’s vantage point, it remains Bangladesh’s largest trading partner, its main transit route to global markets, and a critical partner in security and regional infrastructure. If Bangladesh were to pivot meaningfully away from India, that would carry strategic consequences. Yet, current developments indicate that such a pivot remains unlikely or, in any case, economically unviable. India still matters in the equation precisely because its linkages with Bangladesh are far stronger, more diversified and institutionally well-embedded.
Bangladesh’s attempt to diversify diplomacy can therefore create unintended reinforcement of India’s leverage. Since New Delhi holds the higher ground in the economic connectivity space through trade, land transit, energy cooperation, and regional initiatives. The Bangladesh-Pakistan overture may be interpreted more as a bargaining chip than a realignment. India, by retaining its dominant position in trade and transit corridors to Bangladesh, demonstrates that alternate pathways (via Pakistan) are less credible and carry a higher risk. Bangladesh’s own pause in transhipment, restrictions on exports via Indian land-ports, for example, of jute, woven fabrics and processed foods have strained India–Bangladesh relations. But even that tension underscores how valuable India is: Dhaka’s push to find alternatives quickly makes the weight of India’s linkages visible.
Strategically, for India, the Bangladesh-Pakistan dialogue is a cautionary tale turned to advantage. The reactivation of ties between Dhaka and Islamabad may signal to India that it must deepen its engagement with Bangladesh, not because it is under immediate threat of losing Dhaka’s favour, but because Bangladesh may seek hedging options. That hedging only reinforces India’s existing vantage: when smaller neighbours explore alternatives with weaker partners, the gap between the strong and the weak partner becomes even more pronounced. However, India is aware that it may possibly serve as a channel for expanding Chinese and Pakistani influence right next door. From New Delhi’s perspective, the Dhaka-Islamabad ties extend beyond questions of commerce. It reflects shifting and complicating geopolitical loyalties within South Asia.
Zooming into India’s advantage in several concrete ways: its land-connectivity with northeastern India and Bangladesh gives it a unique transit and logistical gateway; its investment initiatives in Bangladesh (in infrastructure, energy, ports) bring scale and stability; its export markets in Bangladesh are diversified beyond a single commodity; and its security partnerships (like border management and counter-terrorism) provide a deeper strategic relationship unavailable to Pakistan. Bangladesh-Pakistan may offer optics, but without matching institutional and financial depth. Therefore, India’s position remains firmly relevant. In fact, the very fragility of Pakistan provides New Delhi an upmanship.
Thus, Dhaka is unlikely to cut New Delhi out entirely because doing so would threaten Bangladesh’s own economic interests. The cost-benefit calculus is heavily pivoting towards India’s direction because it can credibly offer Bangladesh meaningful connectivity and trade advantages that Pakistan cannot match. This dynamic helps explain the wave of optimism in India, not because New Delhi is passive, but because it is structurally advantaged in the sub-regional economy.
India still matters in the equation because Bangladesh’s best-case scenario lies with India. While Bangladesh may publicly seek to show it is not locked into India, practically, the alternatives are thin and more hazardous. Pakistan’s economic instability and continued unresolved issues mean that any reliance on Pakistan comes with latent diplomatic baggage and uncertain payoff. In contrast, India–Bangladesh ties have increasing momentum: trade, connectivity, energy, maritime links and institutional frameworks all point to a deeper relationship. Thus, India retains not just relevance but leverage.
The Bangladesh-Pakistan experiment may backfire because the incentives tilting toward it are shallow. Bangladesh may signal independence, but the financial and infrastructural disparity between Pakistan and Bangladesh means that the partnership lacks robustness. In the end, Bangladesh risks damaging its most dependable partner in India for symbolic gains with a weaker one. For India, this means that its foundational position in Bangladesh is not being eroded, but indirectly strengthened by the very move Bangladeshi policymakers are deploying to diversify.
Therefore, while the Bangladesh-Pakistan economic revival may headline rhetorically as a new chapter, the substance remains limited and the risks significant. For India, this moment is one of quiet affirmation: the levers of influence, cooperation and connectivity remain firmly in its hands. India’s wave of optimism is not complacent; rather, it is rooted in the fact that Bangladesh’s turn toward Pakistan ultimately accentuates India’s structural advantages. It confirms that in the sub-regional competition, India remains the indispensable partner for Bangladesh.
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