After Sheikh Hasina’s Delhi address, Bangladesh cancelled Indian Economic Zone – here’s why | World News

Dhaka: Bangladesh has officially canceled the Indian Economic Zone project in Mirsharai Chattogram. The decision came after a high-level meeting of the board of directors of Bangladesh Economic Zone Authority (BEZA), chaired by Chief Advisor Muhammad Yunus and with contributions from Bangladesh Investment Development Authority (BIDA).

The government will use the land allocated for the project to build a Defense Industrial Zone to increase local military production. Officials said the decision came after former Prime Minister Sheikh Hasina’s virtual address to New Delhi media. The decision is likely to worsen India-Bangladesh relations.

The Indian Economic Zone was envisioned as a symbol of economic cooperation between India and Bangladesh. The project, signed under a memorandum of understanding in 2015, had planned to develop hundreds of acres of land in Mirsharai and an additional field in Bagerhat, Mongla, within the framework of Bangladesh’s National Special Economic Zone. India also provided a credit line at preferential rates to support the project.

The aim of the project was to strengthen industrial cooperation and economic integration between the two countries. But Younis’ government claimed there had been little concrete progress despite repeated requests to approve international tenders and speed up progress.

Only one percent of the allocated funds have been used, while Indian contractors have shown minimal interest, officials said. By 2025, the project has been effectively removed from intergovernmental talks.

Instead, Bangladesh is now moving forward with the Defense Industrial Zone. The BEZA board has earmarked around 850 acres of previously allocated land in Mirsharai for a special military economic zone. The focus will be on expanding domestic defense production, including military equipment, components and related technologies.

Officials said that negotiations are continuing with many friendly countries regarding potential investments in the region. Decisions regarding the specific types of military products to be produced will be driven by demand. The board also approved other initiatives during its meeting, including the establishment of a free trade zone.

The cancellation of the Indian Economic Zone comes at a sensitive time. Relations between the two countries have already been tense since Yunus took office. Scrapping the project could impact bilateral economic relations as some development initiatives in Bangladesh rely heavily on Indian investment and credit lines.

The Indian Economic Zone was seen as a flagship project symbolizing the strong cooperation and economic partnership between the two countries and was expected to create significant employment in Bangladesh. With the project now cancelled, hopes of widespread job creation have faded, leaving many in Bangladesh disappointed.