The Pulse | Diplomacy | South Asia

New Governments in Bangladesh and Nepal Open Window for India to Recast Ties with Neighbors

In building ties with these countries, India will need to factor in China.

India’s Minister of External Affairs Dr. S. Jaishankar discusses bilateral relations at a meeting in New Delhi, India, with Bangladeshi High Commissioner to India, Hamidullah Riaz, on March 20, 2026.

The winds of political change sweeping through South Asia, with the installation of new governments in Nepal and Bangladesh, offer New Delhi a chance to rework ties with two key neighbors.

In Nepal, 35-year-old rapper-turned-politician Balendra Shah took the oath as prime minister on March 27 after a landslide victory in general elections, held in the aftermath of the 2025 Gen Z protests. Shah’s swearing in as prime minister marks an important milestone in Nepal’s history—he is the youngest to hold this post.

To India’s east, in Bangladesh, a government headed by Tarique Rehman of the Bangladesh National Party (BNP) took office on February 17. This followed the ouster of the long-entrenched Sheikh Hasina government in 2024, in student-led protests in July-August of that year.

Taken together, the new governments in India’s neighborhood represent significant breaks from the past and open the door for new possibilities.

Within days of the BNP government taking charge in Bangladesh, India hosted a senior Bangladeshi military intelligence official, Major General Kaiser Rashid Chowdhury. More visits to India are expected in the coming days, including that of Bangladeshi Foreign Minister Khalilur Rehman. And in a display of goodwill, India sent 5,000 metric tons of diesel to Bangladesh amid the energy crisis triggered by the Iran war.

On March 26, at an event to mark Bangladesh’s National Day, Bangladeshi High Commissioner to India Riaz Hamidullah drew attention to the “high importance” that Prime Minister Rahman accords to “its relationship with India, a partnership shaped by [a shared] history, culture, and geography.” As the new government in Dhaka “embarks on a robust mandate, we look forward to advancing our ties and engagements with India, premised on dignity, equality, mutual trust and respect, and shared benefits,” he said. Hamidullah also pointed to the immense potential that remains to be tapped in bilateral trade. “Our ties go far beyond the $12 billion in bilateral goods trade. Conservative estimates point to comprehensive economic transactions in the order of $28 to $30 billion, minimum,” he said.

Meanwhile, New Delhi has reached out to the Bangladesh Jamaat-e-Islami (BJI).  The BJI, which has long been perceived in Delhi as pro-Pakistan, given its collaboration with the Pakistan Army during the 1971 liberation war, is now the main opposition party in Bangladesh. It does seem that India is willing to deal with the Jamaat despite its ties with Pakistan. Delhi and Dhaka seem keen to normalize ties, which were ruptured following the ouster of the “pro-India” Hasina.

An issue that needs Delhi’s immediate attention is the renewal of the 1996 Ganga Water Sharing Treaty. Besides, India must find ways to reach out to the Bangladeshi people to tamp down on the anti-India sentiment.

Good relations with Bangladesh are important to New Delhi as they are critical for a peaceful eastern border, stability in India’s insurgency-wracked Northeast, and the success of overland connectivity projects linking mainland India, its northeast and Southeast Asia. Consequently, during Hasina’s rule (2009-2024), India strengthened its ties with Bangladesh across the spectrum – from energy and trade to people-to-people relations. Relations during this period were often referred to as the “Sonali Adhayay” or the Golden Period in India-Bangladesh ties. New Delhi was careful to refrain from interfering or commenting on Bangladesh’s internal politics; New Delhi turned a blind eye to the largely one-sided elections in Bangladesh in 2013, 2018 and 2024 that saw Hasina return to office. Likewise, Hasina refrained from commenting on anti-Muslim violence in India.

Hasina’s ouster from power was therefore a setback to Delhi’s relations with Bangladesh. Ties frayed further when the Muhammad Yunus-led interim government took charge. It repeatedly sought Hasina’s extradition to Bangladesh to face justice, a demand that Delhi ignored. This issue impacted bilateral ties and fueled anti-India sentiment in Bangladesh. Yunus’ efforts to deepen ties with India’s strategic rivals, China and Pakistan and attacks on Bangladesh’s Hindu minority members heightened tensions.

India waited for an elected government to take charge in Dhaka before it accelerated its outreach to Bangladesh. Indeed, when it was evident that the BNP would win the February elections, India began reaching out to the party; External Affairs Minister S Jaishankar visited Dhaka in December 2025 to attend the funeral of Begum Khaleda Zia, BNP chief, and met her son and soon-to-be prime minister, Rehman.

India’s relations with Nepal have been troubled over the past decade, especially when KP Sharma Oli has been at the helm in Kathmandu. In 2015, when Nepal unveiled a new constitution, New Delhi feared that it could fuel unrest among Madhesis — Nepalis living in southern Nepal in areas bordering India. Anti-India sentiment surged soon after as India was seen to be supporting a fuel blockade of Nepal. Other issues that roiled relations included Nepal’s assertion of claims to territory in the disputed Lipulekh region, Oli’s warming relations with China and India’s controversial new Agnipath military recruitment scheme that impacted the livelihood security of Nepali Gurkhas in the Indian Army.

When the Oli government was toppled in mass protests last year, Delhi was relieved to see him go. While the new government under Shah is an opportunity for India to rewrite relations, New Delhi must move cautiously. Nepal’s new prime minister has huge support among youth, who will be looking for quick results.

“The major challenge would be to create employment opportunities for young Nepalis at home. Nepal’s unemployment figure is the highest in South Asia, standing at 20.6 percent. While state jobs are dwindling, private sector jobs cannot absorb the youth bulge. Many in Nepal are employed in the tourism sector and related service industries, which are externally driven,” notes Smruti S. Pattanaik, an Indian analyst, in a column in the Kathmandu Post.

If the new government is unable to meet youth aspirations, it could stir anti-India protests, as have previous regimes when under pressure at home.

Over the past decade, India has implemented several development projects in Nepal, including irrigation and drinking water projects and health and education programs. Already a major investor in Nepal, India should urge its private sector companies to invest more in Nepal. It could also purchase more hydro power from Nepal.

At the regional level, India could look at greater cooperation with Bangladesh, Bhutan and Nepal under the BBIN framework and with countries of Southeast Asia under the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) arrangement.

In building ties with both Nepal and Bangladesh, India will need to factor in China. China is at an advantage because it has greater financial capacity to fund projects in these countries. Besides, it does not face the kind of mass hostility to its presence in these countries as does India.

However, geography favors India. Besides, strong cultural and social bonds exist, which India should leverage in building ties with Nepal and Bangladesh.

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The winds of political change sweeping through South Asia, with the installation of new governments in Nepal and Bangladesh, offer New Delhi a chance to rework ties with two key neighbors.

In Nepal, 35-year-old rapper-turned-politician Balendra Shah took the oath as prime minister on March 27 after a landslide victory in general elections, held in the aftermath of the 2025 Gen Z protests. Shah’s swearing in as prime minister marks an important milestone in Nepal’s history—he is the youngest to hold this post.

To India’s east, in Bangladesh, a government headed by Tarique Rehman of the Bangladesh National Party (BNP) took office on February 17. This followed the ouster of the long-entrenched Sheikh Hasina government in 2024, in student-led protests in July-August of that year.

Taken together, the new governments in India’s neighborhood represent significant breaks from the past and open the door for new possibilities.

Within days of the BNP government taking charge in Bangladesh, India hosted a senior Bangladeshi military intelligence official, Major General Kaiser Rashid Chowdhury. More visits to India are expected in the coming days, including that of Bangladeshi Foreign Minister Khalilur Rehman. And in a display of goodwill, India sent 5,000 metric tons of diesel to Bangladesh amid the energy crisis triggered by the Iran war.

On March 26, at an event to mark Bangladesh’s National Day, Bangladeshi High Commissioner to India Riaz Hamidullah drew attention to the “high importance” that Prime Minister Rahman accords to “its relationship with India, a partnership shaped by [a shared] history, culture, and geography.” As the new government in Dhaka “embarks on a robust mandate, we look forward to advancing our ties and engagements with India, premised on dignity, equality, mutual trust and respect, and shared benefits,” he said. Hamidullah also pointed to the immense potential that remains to be tapped in bilateral trade. “Our ties go far beyond the $12 billion in bilateral goods trade. Conservative estimates point to comprehensive economic transactions in the order of $28 to $30 billion, minimum,” he said.

Meanwhile, New Delhi has reached out to the Bangladesh Jamaat-e-Islami (BJI).  The BJI, which has long been perceived in Delhi as pro-Pakistan, given its collaboration with the Pakistan Army during the 1971 liberation war, is now the main opposition party in Bangladesh. It does seem that India is willing to deal with the Jamaat despite its ties with Pakistan. Delhi and Dhaka seem keen to normalize ties, which were ruptured following the ouster of the “pro-India” Hasina.

An issue that needs Delhi’s immediate attention is the renewal of the 1996 Ganga Water Sharing Treaty. Besides, India must find ways to reach out to the Bangladeshi people to tamp down on the anti-India sentiment.

Good relations with Bangladesh are important to New Delhi as they are critical for a peaceful eastern border, stability in India’s insurgency-wracked Northeast, and the success of overland connectivity projects linking mainland India, its northeast and Southeast Asia. Consequently, during Hasina’s rule (2009-2024), India strengthened its ties with Bangladesh across the spectrum – from energy and trade to people-to-people relations. Relations during this period were often referred to as the “Sonali Adhayay” or the Golden Period in India-Bangladesh ties. New Delhi was careful to refrain from interfering or commenting on Bangladesh’s internal politics; New Delhi turned a blind eye to the largely one-sided elections in Bangladesh in 2013, 2018 and 2024 that saw Hasina return to office. Likewise, Hasina refrained from commenting on anti-Muslim violence in India.

Hasina’s ouster from power was therefore a setback to Delhi’s relations with Bangladesh. Ties frayed further when the Muhammad Yunus-led interim government took charge. It repeatedly sought Hasina’s extradition to Bangladesh to face justice, a demand that Delhi ignored. This issue impacted bilateral ties and fueled anti-India sentiment in Bangladesh. Yunus’ efforts to deepen ties with India’s strategic rivals, China and Pakistan and attacks on Bangladesh’s Hindu minority members heightened tensions.

India waited for an elected government to take charge in Dhaka before it accelerated its outreach to Bangladesh. Indeed, when it was evident that the BNP would win the February elections, India began reaching out to the party; External Affairs Minister S Jaishankar visited Dhaka in December 2025 to attend the funeral of Begum Khaleda Zia, BNP chief, and met her son and soon-to-be prime minister, Rehman.

India’s relations with Nepal have been troubled over the past decade, especially when KP Sharma Oli has been at the helm in Kathmandu. In 2015, when Nepal unveiled a new constitution, New Delhi feared that it could fuel unrest among Madhesis — Nepalis living in southern Nepal in areas bordering India. Anti-India sentiment surged soon after as India was seen to be supporting a fuel blockade of Nepal. Other issues that roiled relations included Nepal’s assertion of claims to territory in the disputed Lipulekh region, Oli’s warming relations with China and India’s controversial new Agnipath military recruitment scheme that impacted the livelihood security of Nepali Gurkhas in the Indian Army.

When the Oli government was toppled in mass protests last year, Delhi was relieved to see him go. While the new government under Shah is an opportunity for India to rewrite relations, New Delhi must move cautiously. Nepal’s new prime minister has huge support among youth, who will be looking for quick results.

“The major challenge would be to create employment opportunities for young Nepalis at home. Nepal’s unemployment figure is the highest in South Asia, standing at 20.6 percent. While state jobs are dwindling, private sector jobs cannot absorb the youth bulge. Many in Nepal are employed in the tourism sector and related service industries, which are externally driven,” notes Smruti S. Pattanaik, an Indian analyst, in a column in the Kathmandu Post.

If the new government is unable to meet youth aspirations, it could stir anti-India protests, as have previous regimes when under pressure at home.

Over the past decade, India has implemented several development projects in Nepal, including irrigation and drinking water projects and health and education programs. Already a major investor in Nepal, India should urge its private sector companies to invest more in Nepal. It could also purchase more hydro power from Nepal.

At the regional level, India could look at greater cooperation with Bangladesh, Bhutan and Nepal under the BBIN framework and with countries of Southeast Asia under the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) arrangement.

In building ties with both Nepal and Bangladesh, India will need to factor in China. China is at an advantage because it has greater financial capacity to fund projects in these countries. Besides, it does not face the kind of mass hostility to its presence in these countries as does India.

However, geography favors India. Besides, strong cultural and social bonds exist, which India should leverage in building ties with Nepal and Bangladesh.

Elizabeth Roche is Associate Professor at the Jindal School of International Affairs, OP Jindal Global University, Haryana, India.

Bangladesh interim government

India-Bangladesh Ganga Waters Treaty

India-Bangladesh interim government

India-Bangladesh relations

India-Nepal relations

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