After Pakistan and Sri Lanka, Bangladesh Turns to China for ₹6,700 Crore Loan for Teesta Project

After Pakistan and Sri Lanka, another of India’s neighbors is edging closer to China’s debt trap. Bangladesh’s interim government has decided to borrow 6,700 crore taka from China to fund the Teesta Mega Project, a move that has raised concerns in New Delhi due to the project’s geographical and strategic significance.

China Steps In, India Left Out

The project gained momentum following Bangladesh Chief Advisor Professor Mohammad Yunus’s visit to China. A financial agreement is expected to be signed by the end of 2025.

Both India and China had earlier shown interest in the Teesta project. In fact, during his visit to Dhaka in May 2024, then Indian Foreign Secretary Vinay Kwatra expressed New Delhi’s willingness to fund it. The Awami League government led by Sheikh Hasina also preferred India’s involvement.

However, after the political upheaval in August 2024, which forced Hasina to resign and take refuge in India, the new interim regime began tilting towards Beijing.

Why the Teesta Project Matters

Former PM Sheikh Hasina had called the Teesta project crucial for Bangladesh, highlighting three objectives:

Flood Control – To manage devastating monsoon floods in the Teesta basin.

Riverbank Protection – To reduce erosion before and after monsoons.

Water Availability – To ensure sufficient flow in the dry summer season.

The Teesta stretches 115 km inside Bangladesh, with around 45 km severely affected by erosion, particularly in a 20 km stretch.

A Sensitive Geopolitical Zone

The Teesta basin faces drought in summer and erosion in monsoon, making it a critical development priority. However, its location near the Siliguri Corridor (India’s “chicken’s neck”) adds a layer of strategic sensitivity. New Delhi is wary of Chinese involvement so close to its vulnerable northeastern corridor.

A Long-Standing Dispute With India

The Teesta is not just a domestic issue for Bangladesh—it is a transboundary river, flowing from Sikkim and West Bengal into Bangladesh.

• In 1983, India and Bangladesh signed a temporary pact: India would receive 39% of Teesta waters, Bangladesh 36%.

• In 2011, a permanent water-sharing agreement was nearly finalized during Prime Minister Manmohan Singh’s visit to Dhaka. However, opposition from West Bengal CM Mamata Banerjee stalled the deal.

Since then, the issue has remained unresolved, leaving space for China to step in with financial muscle.