Datanomics: State of Delhi-Dhaka economic ties after Sheikh Hasina

Bangladesh's economic engagement shifted towards China, the US and the Netherlands after Hasina's exit, while trade and investment ties with India weakened

Bangladesh’s former prime minister (PM), Sheikh Hasina, made her first public appearance virtually on Wednesday after a two-year absence following student-led protests that led to her August 2024 ouster.  Following the change in leadership in Bangladesh — which first saw Muhammad Yunus leading an interim administration as chief adviser, before Tarique Rahman became PM after the February 2026 elections — economic relations between New Delhi and Dhaka have deteriorated.  The total merchandise trade between the two countries declined by 8.3 per cent in financial year 2025-26 (FY26), falling to $12.37 billion from $13.49 billion in FY25. Net foreign direct investment (FDI) inflows from India to Bangladesh also declined.  Meanwhile, Bangladesh upped its engagement with countries like the Netherlands and China to bolster its net FDI inflows. Its trade with countries like the US also rose sharply in FY26, while China saw a moderate increase. 

Soured relations also paved the way for a significant decline in Bangladeshi tourists coming to India in 2025.