$336 Million Loan, 2% Interest: China Funds Bangladesh's Mongla Port Revamp

Dhaka: India once secured the right to run a terminal at Mongla Port. Now Bangladesh has signed a $335.78 million loan agreement with China's Export-Import Bank to expand and modernise it. The deal adds to India's long-held concerns over China's growing presence in Bangladesh, especially in projects first discussed with Delhi.The loan will pay for two container terminals equipped with modern machinery. It follows an understanding reached during Bangladesh Prime Minister Tarique Rahman's visit to China in June this year.According to the Bangladesh Sangbad Sanstha (BSS), the state-run news agency, China has confirmed concessional financing for the project at an interest rate of 2 per cent. This is part of the agreement.Alia Meher, joint secretary of the Economic Relations Division (ERD), and Fengjun Tian, assistant general manager of EXIM Bank of China, signed the agreement on October 10 on behalf of their respective governments, a Bangladesh government press statement said.The deal will ensure the port undergoes necessary modernisation. This includes two container terminals equipped with modern machinery, along with a container yard, a container delivery yard and a cargo handling yard.READ | Bangladesh-China Joint Statement, Mongla Port's Implications For India DecodedEarlier, India had secured rights to operate a terminal at Mongla Port through an agreement signed with India Ports Global Limited (IPGL). The aim was to boost regional transit and maritime trade under a bilateral framework.This was seen as a significant strategic win in India's efforts to counter China's influence in the Indian Ocean region. However, the joint statement issued after Tarique Rahman's visit to China put both the Teesta and Mongla plans firmly in China's hands.Relations between Dhaka and Delhi deteriorated after the August 2024 protests and the ouster of the Sheikh Hasina-led government. Bangladesh then pivoted towards China for crucial projects, including the Mongla Port development and the Teesta Masterplan. Both are important to India from a strategic security point of view.READ | Bangladesh Requests India For Removal Of Trade RestrictionsSpeaking to NDTV earlier this year on India-Bangladesh ties, Bangladesh Foreign Minister Khalilur Rahman said Dhaka did not see its foreign policy as a zero-sum game. He expressed hope that others would extend the same interpretive generosity. "Our relationship with other countries is not a problem," he said.On the joint statement issued after Tarique Rahman's visit to China, India said, "We are keeping a close watch on all developments in its neighbourhood and would respond appropriately whenever necessary.""Our development partnership with Bangladesh is guided by a mutually agreed roadmap, which is reviewed periodically," Ministry of External Affairs spokesperson Randhir Jaiswal had said.