Sensitive issues remain. Water sharing of the Ganga and Teesta rivers. Treatment of minorities, particularly Hindus. Border management. Trade imbalances. Connectivity projects.
What happens next will shape not just bilateral ties, but the balance of South Asia itself, points out Ramesh Menon.
Key Points
- If Tarique Rahman governs inclusively, strengthens institutions and prioritises regional cooperation, Bangladesh could regain its economic momentum and restore confidence at home and abroad.
- If mismanaged, old tensions could resurface quickly. That will not be good news for India, as it will make it easier for both China and Pakistan to stoke conflicts with India.
- For Bangladesh, the test is whether this political change can restore trust and revive growth. For India, the task is steady engagement based on mutual interest, not personalities.
The Bangladesh elections, in which the Bangladesh Nationalist Party won a landslide parliamentary victory, were being keenly watched across South Asia, particularly in India.
Prime Minister Narendra Modi was among the first to reach out to BNP leader Tarique Rahman, who had returned to the country after 17 years in exile, even before the final results were formally declared.
The BNP secured close to 50 per cent of the vote, winning 212 of the 300 seats in Parliament. It was a decisive mandate.
Relations between India and Bangladesh had drifted after then prime minister Sheikh Hasina was forced out in August 2024 following massive countrywide protests against her governance.
Her Awami League was barred from contesting this election. Hasina, now in exile in India, had called for a boycott.
Yet, nearly 60 per cent of the electorate turned out to vote. That turnout itself reflected a strong desire for political change.
The change, however, will not be without complications.
BNP leaders have called for Hasina's extradition from India to face charges linked to the violent crackdown during the protests in which large numbers of people were killed. She has been given a death sentence by a court.
The issue is likely to become a diplomatic irritant.
The BNP has also asked India not to allow Hasina to make political statements from Indian soil.
The Islamic party Jamaat-e-Islami, which has re-emerged as a significant force, will also influence the tone of relations.
The Jamaat-e-Islami party emerged with significant parliamentary strength, raising fresh questions about ideological balance in Dhaka's political calculus.
The National Citizen Party, led by student leaders who spearheaded the agitation against Hasina, will add its own pressure. Many young people were killed during the protests. That memory remains raw.
Hasina had ruled Bangladesh with a firm and often uncompromising hand. Opposition space had narrowed sharply over the years.
Ironically, it is that very opposition which has now swept to power.
But victory at the ballot box is one thing. Governing is another.
Rahman inherits a stressed economy. External debt now exceeds 100 billion dollars. Foreign exchange reserves have fallen sharply from their earlier highs. The banking sector is under severe strain, with non-performing loans rising to worrying levels. Poverty has edged up again to around 20 to 21 per cent.
A World Bank assessment had warned that nearly two million people slipped back into poverty during the recent slowdown.
Youth unemployment remains a serious concern. More than 650,000 graduates enter the job market every year. Many struggle to find stable employment. Economic frustration was one of the triggers of unrest.
According to World Bank debt sustainability analysis, public debt has risen toward moderate risk levels, with external obligations accounting for about 39 per cent of GDP and a growing repayment burden. Non-performing loans have surged to above 24 per cent of the banking system, reflecting deep structural issues.
This election, therefore, is not just a change of government. It is a test of whether political legitimacy can translate into economic renewal.
Previous elections had been boycotted or criticised for lack of fairness.
This vote was framed by the BNP as a battle to restore democracy and institutions. A constitutional referendum was also held alongside the polls, with reports suggesting strong support for governance reforms.
The message from voters was clear. They want accountability and an institutional reset.
What Lies Ahead For India
India can see both risk and opportunity here.
For India, maintaining influence means engaging with Bangladesh on its terms while not appearing transactional.
The new government will seek foreign investment, infrastructure financing, and diplomatic balance. A tilt too sharply away from India could empower external actors in the Bay of Bengal and complicate New Delhi's security and connectivity priorities.
New Delhi had drawn closer to Hasina over the past decade, especially after she acted firmly against Indian insurgent groups operating from Bangladeshi soil. Security cooperation deepened. Connectivity projects expanded. Trade grew. India benefited strategically from transit access to its north east through Bangladesh.
History, however, makes India cautious. During the BNP's earlier tenure from 2001 to 2006, India had concerns about insurgent groups operating from across the border. New Delhi will watch closely to ensure that security cooperation does not weaken.
Sensitive issues remain. Water sharing of the Ganga and Teesta rivers. Treatment of minorities, particularly Hindus. Border management. Trade imbalances. Connectivity projects.
All these will test the maturity of the new leadership.
The silver lining for India was that the BNP campaign did not rely on anti-India rhetoric.
After the victory, senior advisers indicated that Bangladesh wants to reset ties with India on a balanced footing. That suggests pragmatism.
There is also a larger geopolitical layer. China and the United States have welcomed the new government. Bangladesh's location in the Bay of Bengal makes it strategically important.
Rahman will have to balance major powers carefully. India will have to engage without appearing overbearing.
Tarique Rahman's own journey reflects Bangladesh's turbulent politics. The son of former prime minister Khaleda Zia and the late president Ziaur Rahman, the founder of the BNP, he has long been a controversial figure. Convicted in corruption cases under the previous government, charges his supporters call politically motivated, he spent years in exile in London.
Within the BNP, he steadily consolidated control after his mother was jailed and her health deteriorated. He reshaped district leadership and kept the party intact during years of repression.
His return signals a generational shift.
But it also means expectations are high.
He must now move from narrow Opposition politics to statecraft. That requires inclusion, administrative discipline and economic realism.
Bangladesh Politics Polarisation
Bangladesh's politics has long been deeply polarised. If that polarisation is not moderated, instability could return. If institutions are not strengthened, reform will falter.
For Bangladesh, the test is whether this political change can restore trust and revive growth. For India, the task is steady engagement based on mutual interest, not personalities.
Rahman now has both mandate and moment.
If he governs inclusively, strengthens institutions and prioritises regional cooperation, Bangladesh could regain its economic momentum and restore confidence at home and abroad.
If mismanaged, old tensions could resurface quickly. That will not be good news for India, as it will make it easier for both China and Pakistan to stoke conflicts with India.
The stakes for both Dhaka and New Delhi are high.
What happens next will shape not just bilateral ties, but the balance of South Asia itself.
Ramesh Menon is an author of seven books, an award-winning journalist, documentary filmmaker, and educator. He is the author of Modi Demystified: The Making of a Prime Minister.
Feature Presentation: Aslam Hunani/Rediff
© 2026