Key Findings
- The Bay of Bengal witnessed increased naval presence from China, India, and the U.S. throughout 2025, establishing patterns likely to intensify in 2026
- Bangladesh’s “Look East” policy faces new pressures as China seeks expanded access to ports in exchange for BRI investments
- India’s maritime security cooperation offers remain conditional on Bangladesh limiting Chinese naval presence
- The United States positions itself as a third option, promising capacity building without political strings
- Bangladesh’s challenge: maximizing strategic autonomy while avoiding entrapment in great power rivalry
The Bay of Bengal’s Rising Strategic Profile
Once considered a secondary theater to the South China Sea or the Persian Gulf, the Bay of Bengal has moved to center stage in Indo-Pacific security dynamics. Several factors drive this shift:
- Chinese naval expansion into the Indian Ocean, creating what Indian strategists call a “string of pearls”
- India’s Act East policy, which treats the Bay as India’s strategic backyard
- U.S. interest in maintaining freedom of navigation as part of its Indo-Pacific strategy
- Energy transit routes that carry vital oil supplies to East Asian economies
- Bangladesh’s economic rise, giving the country new leverage but also new vulnerabilities
For Bangladesh, this means 2026 will require careful maritime diplomacy to protect national interests without becoming a proxy in great power competition.
The Strategic Dilemma
Bangladesh sits at the intersection of three competing maritime strategies:
- China wants access for naval logistics and port development
- India seeks exclusionary control over what it considers its sphere of influence
- The U.S. promotes open seas but wants alignment against China
Each offers benefits but carries risks of entrapment. Bangladesh’s task is to extract value while preserving strategic autonomy.
Chinese Overtures: The Port Development Package
China’s approach to Bangladesh in 2025 centered on economic statecraft: massive infrastructure investments tied to maritime access. Key elements of the Chinese offer include:
Payra Port Expansion
China has proposed financing Phase II of Payra deep-sea port, with an estimated $3.8 billion investment package. The offer includes:
- Container terminal construction with Chinese equipment
- Loan financing at concessional rates (reportedly 2% interest)
- Technology transfer for port management systems
- Training for Bangladeshi personnel
The proposed terms are attractive on paper, but Indian analysts warn that Chinese-financed ports often become dual-use facilities—commercial hubs that can accommodate naval vessels.
Maritime Silk Road Integration
China’s Maritime Silk Road initiative positions Bangladesh as a key node connecting Indian Ocean trade with overland routes through Myanmar to China’s Yunnan province. This connectivity offers economic benefits but raises sovereignty questions about Chinese control over critical infrastructure.
The Hidden Cost
Sri Lanka’s Hambantota port experience looms large as a cautionary tale. Inability to service Chinese debt led to a 99-year lease ceding control to China. While Bangladesh’s debt position differs, the pattern raises legitimate concerns about long-term sovereignty implications.
India’s Response: Security Cooperation with Conditions
India has responded to Chinese overtures with a counteroffer: enhanced security cooperation that explicitly excludes third-party naval access. Key elements include:
White Shipping Agreements
India has proposed expanded information sharing on commercial shipping through its Information Fusion Centre - Indian Ocean Region (IFC-IOR). This offers Bangladesh real-time maritime domain awareness—valuable for counter-piracy and search-and-rescue operations.
Joint Naval Exercises
The 2025 bilateral exercise series saw expanded participation from both navies, including anti-submarine warfare drills and coordinated patrol missions. India has proposed upgrading these to annual standardized exercises similar to MILAN.
The Exclusionary Condition
India’s security cooperation comes with an implicit expectation: Bangladesh should not permit Chinese naval access on a regular basis. Indian officials have privately expressed concern that Chinese “logistical stops” could become permanent presence.
India's Strategic Calculus
The U.S. Third Option: Capacity Without Entanglement?
The United States has positioned itself as an alternative partner, offering maritime security capacity building without the exclusionary conditions imposed by India. Key U.S. initiatives include:
Indo-Pacific Maritime Security Initiative
The U.S. has offered Bangladesh participation in this program, which includes:
- Maritime domain awareness technology transfers
- Training for Bangladesh Navy personnel at U.S. naval academies
- Coast Guard capacity building for search and rescue
- Equipment transfers including patrol vessels and surveillance systems
The Freedom of Navigation Angle
U.S. diplomats emphasize shared interest in maintaining freedom of navigation in accordance with UNCLOS. This aligns with Bangladesh’s own positions on maritime law and sovereignty.
But There’s Always a “But”
U.S. offers come within a broader framework of Indo-Pacific strategy that explicitly seeks to counter Chinese expansion. While the U.S. may not exclude Chinese access directly, enhanced security cooperation with Bangladesh serves the same strategic purpose: building partner capacity to resist Chinese encroachment.
Bangladesh’s Strategic Autonomy Challenge
The core challenge for Bangladesh in 2026 is maximizing benefits from all three great powers while preserving strategic autonomy. This requires:
Issue-Based Alignment
Rather than comprehensive alignment with any single power, Bangladesh should pursue issue-based cooperation:
- Economic projects with China where terms are favorable
- Security cooperation with India on shared threats like terrorism and piracy
- Capacity building with the U.S. for professionalization and technology access
Transparency as Defense
Transparency about agreements with all partners reduces suspicion. Bangladesh should:
- Publish details of maritime agreements
- Invite observers to joint exercises
- Establish clear legal frameworks for foreign naval access
- Maintain open communication with all regional partners
Regional Leadership
Bangladesh can leverage its position to promote regional frameworks that reduce great power pressure:
- Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) maritime security dialogue
- Indian Ocean Rim Association (IORA) mechanisms for confidence-building
- Trilateral or multilateral exercises that distribute influence
The 2026 Strategic Framework
Bangladesh should adopt a “non-exclusionary engagement” policy:
- Accept economic investment from any partner on commercially viable terms
- Pursue security cooperation with any partner without surrendering sovereignty
- Refuse to join any alliance that requires permanent basing rights
- Promote regional frameworks that reduce unilateral pressure
- Maintain credible defense capacity to enforce sovereignty
This approach maximizes Bangladeshi agency while minimizing entrapment risks.
What to Watch in 2026
Several developments will test Bangladesh’s strategic autonomy in the coming year:
Port Development Decisions
Bangladesh will decide on Phase II of Payra port expansion. The choice of partners (Chinese, Japanese, or multilateral) sends signals about strategic orientation.
Exercise Diplomacy
The scale and participants in Bangladesh’s bilateral and multilateral naval exercises will indicate balancing priorities. Expanded Indian participation suggests balancing against China; diversified participation suggests hedge strategy.
Maritime Boundary Enforcement
How Bangladesh responds to unauthorized fishing, intrusion by research vessels, or submarine detection activities will demonstrate resolve in enforcing sovereignty.
Regional Initiative Leadership
Bangladesh’s role in BIMSTEC and IORA maritime initiatives will show whether it is shaping regional order or reacting to others’ initiatives.