title:Bangladesh Cancels Indian Economic Zone in Chattogram
ISLAMABAD: Bangladesh has escalated tensions with India by officiallycancelling a long-pending government-to-government economic zone project inChattogram’s Mirsarai area, opting instead to develop a dedicated defenceindustrial zone on the same land. The announcement came from ChowdhuryAshik Mahmud Bin Harun, executive chairman of the Bangladesh Economic ZonesAuthority (BEZA) and Bangladesh Investment Development Authority (BIDA),during a recent press briefing following a high-level governing boardmeeting chaired by Chief Adviser Muhammad Yunus. This move reflects growingstrategic divergences between the two neighbours, amid stalled bilateralcooperation and shifting regional priorities.
The Indian Economic Zone, proposed under a 2015 memorandum ofunderstanding, was intended to span significant acreage in Mirsarai withinthe National Special Economic Zone framework and another site in Mongla,Bagerhat. Funded through India’s concessional line of credit, the projectaimed to boost industrial collaboration and economic integration. However,despite repeated requests from Bangladesh for progress, including allowinginternational tenders, no substantial advancement occurred. Officials notedthat only about one percent of allocated funds were utilized, and Indiancontractors showed minimal interest, leading to the project’s delistingfrom the G2G framework by mid-2025.
In a policy decision taken at BEZA’s fourth governing board meeting,approximately 850 acres of previously allocated vacant land in Mirsaraihave now been earmarked for a Military Economic Zone or defence industrialpark. This initiative seeks to enhance Bangladesh’s domestic defencemanufacturing capabilities, focusing on producing military equipment,components, and related technologies. The shift underscores a strategicpivot towards self-reliance in critical sectors, particularly as globalconflicts highlight vulnerabilities in supply chains for ammunition, spareparts, and essential defence hardware rather than advanced platforms alone.
Chowdhury Ashik Mahmud emphasized that modern warfare increasingly exposesshortages in basic munitions and support systems, which can prove moredebilitating than deficits in fighter aircraft or major platforms. Byrepurposing the land for defence-oriented industries, Bangladesh aims toattract both local and foreign investment, foster export potential, andbuild indigenous capacity. This zone will be integrated into BEZA’s masterplan, marking the country’s first dedicated defence manufacturing hub andaligning with broader efforts to diversify economic zones beyondtraditional sectors.
The cancellation arrives against a backdrop of deterioratingBangladesh-India relations since the interim government assumed power underMuhammad Yunus. Previous economic zones under the same framework facedsimilar hurdles, with no contracts signed or ground activity initiateddespite years of discussions. Analysts point to unresolved issues,including trade imbalances, border disputes, and differing geopoliticalalignments, as contributing factors to the impasse. India’s lack ofresponse to Bangladesh’s proposals for project revival further acceleratedthe decision to abandon the initiative entirely.
This development is likely to impact bilateral economic ties, which havehistorically been underpinned by substantial Indian investments and linesof credit. The Indian Economic Zone was envisioned as a flagship project tosymbolize deeper integration, potentially creating jobs and infrastructurein Chattogram, a key port city. Its scrapping signals a recalibration ofpriorities, with Dhaka increasingly emphasizing strategic autonomy insensitive areas like defence production amid evolving regional dynamics,including concerns over supply chain dependencies.
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Broader implications extend to South Asian geopolitics, where economicprojects often carry strategic undertones. The repurposing for defencepurposes may invite scrutiny regarding technology sourcing and exportcontrols, though officials stress the zone’s open nature for investment.Concurrently, Bangladesh is advancing other economic initiatives, such as aplanned free trade zone in Anwara, to bolster global supply chainpositioning and reduce reliance on specific partners.
The decision highlights challenges in sustaining long-term bilateralprojects when momentum falters. With the tenure of the Indian Economic Zoneexpiring and funding lines cancelled, Bangladesh has moved decisively toutilize the idle land productively. This pragmatic approach aims to converta stalled collaboration into an opportunity for national securityenhancement and industrial growth.
Observers note that such shifts could prompt renewed dialogue between Dhakaand New Delhi to address underlying frictions. However, the immediate focusremains on implementing the defence industrial zone, which promises tocontribute to Bangladesh’s long-term resilience in an uncertain globalsecurity environment.
Source:https://www.tbsnews.net/economy/military-economic-zone-be-set-mirsarai-national-special-economic-zone-bida-chief-1344366
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