India has secured a notable strategic win by obtaining the operational rights to a terminal at Mongla port – Bangladesh’s largest seaport. This development holds significant implications for regional dynamics and enhances India’s maritime influence, particularly in the Indian Ocean. It also is a part of India’s border strategy to counter China’s growing influence in the region.
This move follows India’s previous successful bids to manage overseas ports, including Chabahar in Iran and Sittwe in Myanmar. The specifics of the Mongla port deal remain undisclosed, but according to sources, the terminal will be operated by Indian Port Global Limited (IPGL). Despite being relatively new to the global port management scene, India has started to invest significantly in the sector.
Management of the Mongla port terminal is expected to significantly enhance India’s trade connectivity and regional influence. In 2018, Bangladesh granted India full access to both the Chittagong and Mongla ports for transit and cargo shipping, a move that has already boosted bilateral trade.
On the other hand, China has been actively expanding its influence across the Indian Ocean through its Maritime Silk Road initiative, investing in ports from Gwadar in Pakistan to Djibouti in East Africa. Chinese companies are involved in 17 Indian Ocean ports – constructing 13 of them and holding stakes in 8 projects. It is also crucial for China to maintain its hold in the region considering that about 80% of China’s energy imports pass through the Indian Ocean.
Bangladesh joined China’s Belt and Road Initiative (BRI) in 2016, aiming to leverage Beijing’s financial resources to boost its infrastructure and economic integration. China has been a major investor in Bangladesh, with projects including the development of a 750-acre industrial park in Chittagong and a single-point mooring system at the Chittagong port.
However, the Mongla port represents a critical juncture for Bangladesh, requiring careful navigation of its relationships with both China and India. But for Bangladesh, it is a win-win situation even if either of the two were commissioned to operate Mongla Port. Recent visits by Bangladesh Prime Minister Sheikh Hasina to India as well as China underscore this balancing act. During her visit to India, several cooperation agreements were signed, including those in the maritime sector. In contrast, her trip to China resulted in a comparatively modest USD 137 million in financial assistance, far short of the USD 5 billion loan she sought.
India operating the Mongla Port will be instrumental in enhancing bilateral trade with Bangladesh. Secondly, it will allow India’s landlocked northeast opportunities for maritime trade through alternative access to the Kolkata port, bypassing the narrow and congested Siliguri corridor. The Mongla port, in close proximity to Kolkata, could significantly reduce shipment times and improve trade efficiency.
