India Bangladesh Reset: Yunus, Hasina and the Teesta Test

Introduction

India and Bangladesh have shared one of South Asia's closest bilateral relationships since Bangladesh gained independence in 1971. Over the decades, cooperation in trade, connectivity, security, power, and people to people exchanges transformed the partnership into a model for regional cooperation. However, political developments in Bangladesh during 2024 and the subsequent emergence of an interim government under Muhammad Yunus have introduced a new phase in bilateral relations.

Today, India faces a complex diplomatic challenge. On one hand, the new government in Dhaka seeks stronger economic cooperation and regional connectivity with India. On the other hand, it has adopted tougher positions on sensitive issues such as the Teesta River water sharing agreement and the extradition of former Prime Minister Sheikh Hasina.

For India, the challenge extends beyond bilateral diplomacy. Domestic politics in West Bengal continue to influence negotiations over the Teesta agreement, while China's growing strategic engagement with Bangladesh has increased geopolitical competition in India's immediate neighbourhood.

For UPSC aspirants, this issue is significant because it connects multiple themes of General Studies Paper II, including India's neighbourhood policy, international relations, cooperative federalism, water diplomacy, and strategic competition in South Asia.

Why India Bangladesh Relations Matter

Bangladesh is India's largest trading partner in South Asia. The two countries share a land boundary of more than 4,000 kilometres, making it India's longest international border.

The relationship has expanded significantly over the last fifteen years through cooperation in several areas.

India has supported Bangladesh through lines of credit for infrastructure development.

Cross border railway and road connectivity have been restored after decades.

Power trade has grown steadily, with India exporting electricity to Bangladesh.

Both countries have worked closely against terrorism, insurgency, and cross border crime.

Bangladesh also serves as India's gateway to the Northeast through various connectivity projects, reducing transportation costs and improving regional integration.

Because of these strategic and economic interests, political instability in Bangladesh directly affects India's security and foreign policy objectives.

Political Change in Bangladesh

Bangladesh witnessed major political changes after widespread protests led to the removal of Sheikh Hasina from power in 2024. An interim government headed by Nobel Peace Prize laureate Muhammad Yunus assumed responsibility for overseeing governance and preparing the country for democratic elections.

Unlike the previous government, which maintained exceptionally close ties with New Delhi, the interim administration has attempted to balance its foreign policy by engaging multiple international partners.

While Dhaka has repeatedly expressed interest in maintaining constructive relations with India, it has also adopted firmer positions on issues that are politically sensitive within Bangladesh.

These include demands regarding the extradition of Sheikh Hasina and renewed emphasis on securing a fair agreement over the waters of the Teesta River.

For India, this has created a diplomatic balancing act between respecting democratic developments in Bangladesh, protecting long term strategic interests, and maintaining regional stability.

Muhammad Yunus and India's Diplomatic Challenge

Muhammad Yunus has publicly stated that Bangladesh seeks mutually beneficial relations with India based on equality, sovereignty, and shared prosperity.

Economic cooperation remains a major priority.

Bangladesh continues to value Indian markets.

Trade and investment remain important for economic growth.

Connectivity projects linking Bangladesh with India's Northeast continue to offer mutual benefits.

However, Dhaka has also conveyed that unresolved issues cannot remain permanently on the sidelines.

The interim government has repeatedly highlighted the Teesta water sharing agreement as an important unresolved concern.

It has also raised questions regarding the future of Sheikh Hasina, who has been residing in India after leaving Bangladesh.

These positions have introduced new complexities into bilateral diplomacy.

India must therefore engage the new leadership while carefully protecting its own strategic and security interests.

The Teesta River Dispute

Among all pending issues between India and Bangladesh, the Teesta River dispute remains the most politically sensitive.

The Teesta originates in the eastern Himalayas, flows through the Indian states of Sikkim and West Bengal, and then enters Bangladesh before joining the Brahmaputra River system.

Millions of people depend on the river for agriculture, drinking water, fisheries, and irrigation.

Bangladesh argues that reduced dry season water flows significantly affect agriculture in its northern districts.

India acknowledges the importance of the issue but has not been able to finalize a long term water sharing agreement.

Unlike the successful Ganga Water Treaty signed in 1996, negotiations over the Teesta have remained unresolved for more than a decade.

Why the Teesta Agreement Has Not Been Signed

The principal obstacle has been India's federal structure.

Water is listed in the State List under the Seventh Schedule of the Constitution. Although international treaties are negotiated by the Union Government, successful implementation often requires cooperation from the concerned state government.

West Bengal has consistently expressed concerns that sharing additional Teesta waters during the lean season could adversely affect irrigation, agriculture, and drinking water needs within the state.

As a result, political consensus between the Union Government and the West Bengal Government has remained elusive.

This has delayed the conclusion of an agreement despite years of negotiations with Bangladesh.

The Teesta issue therefore illustrates an important feature of Indian governance.

Domestic federal politics can directly influence foreign policy outcomes.

For UPSC Mains, this serves as a classic example of the relationship between cooperative federalism and international diplomacy.

Why the Teesta Issue Matters Beyond Water

The Teesta dispute is no longer only about river water.

It has become a question of political trust between India and Bangladesh.

From Bangladesh's perspective, the inability to conclude the agreement despite years of discussions creates doubts regarding India's capacity to deliver on important bilateral commitments.

For India, any agreement must balance international obligations with the legitimate concerns of states that depend on the same river system.

The dispute has therefore become a test of India's ability to reconcile domestic federal interests with its larger neighbourhood policy.

Its eventual resolution will require political consensus, scientific water management, and sustained diplomatic engagement.

In many ways, the Teesta River has become a symbol of the broader challenges facing India Bangladesh relations. It reflects how geography, domestic politics, diplomacy, and regional strategy are increasingly interconnected in South Asia.