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| People visit the South Asia Pavilion during the 9th China-South Asia Expo in Kunming, southwest China's Yunnan Province, June 19, 2025. (Photo: Hu Chao/Xinhua) |
Bangladesh sits at the centre of a three-way contest: Beijing pours in capital, Delhi controls the arteries of clean energy access, and Gulf suppliers and Western financiers are bidding for long-term deals. At the heart of it is Dhaka's energy shortfall. Chinese investments, from power plants to transmission corridors, are tying Bangladesh into a wider Chinese-built chain spanning Pakistan to Sri Lanka. The clean hydropower Bangladesh is eyeing from Nepal and Bhutan can only reach its factories through Indian territory, making Delhi the indispensable transit gatekeeper. For years, India has relied on geography as quiet leverage for its ability to slow, stop, or enable trade and commodities across South Asia on its own terms. Yet, that leverage is no longer uncontested, as new players, led by China, deepen their footprint in the region.
But India is not just a corridor country. Through Adani Power, it is also a direct supplier. In this contest, Dhaka's next choices on its energy supply are poised to ripple across the subcontinent's energy corridors and political alignments and will decide who gains the upper hand, and how the geopolitical map of South Asia is redrawn. With elections tentatively scheduled four months away and its power grid under immense strain, Dhaka has become the rare South Asian capital where political upheaval, foreign finance, and energy security collide.
Bangladesh's energy system is under mounting pressure. About three million battery-powered rickshaws, running mostly on low-cost Chinese batteries, charge at informal roadside stations with no metering or load control. Their aggregate demand could swallow the full output of the $12 billion Rooppur Nuclear Power Plant, two 1,200-megawatt units, built with Russian assistance and still awaiting commissioning—before any factory benefits.
Natural gas, which once met two-thirds of its power demand and remains the backbone of power supply, is declining by about 200 million cubic feet a year, as most prime reserves run dry. No major discoveries have been made in more than a decade pushing the country to more imports and coal. LNG imports have filled part of the gap. Between 2022 and 2024, Bangladesh spent an estimated. $11 billion USD on spot-market LNG purchases, a level of exposure that left it acutely vulnerable to global price swings. Coal plants face shrinking finance, and new LNG terminals – floating or onshore – take years to build. Bangladesh is trapped between falling reserves and slow, expensive alternatives.
Sheikh Hasina's exile in India, while interim leader Muhammad Yunus demands her extradition, has cooled bilateral ties. Delhi suspended most visa services after the upheaval, signaling distance. Yet geography ensures neither side can sustain a prolonged break. Bangladesh's clean energy goals, 40 percent by 2041, and the competitiveness of its garment industry depend on large-scale hydropower imports from Nepal and Bhutan, all of which must cross Indian territory. Domestic renewables can only go so far in a land-constrained country, making cross-border power critical.
In 2024, Nepal exported about 40 megawatts to Bangladesh through India while Bhutan advanced talks on similar flows. Scaling this requires Delhi's consent and grid integration—critical if India wants to avoid Dhaka deepening reliance on Chinese-financed plants, Gulf LNG contracts, and Western-backed renewables through long term deals that would dilute Indian leverage.
Both Beijing and Delhi are recalibrating their playbooks in a region where governments change quickly and external alignments are never fixed. For China, it is an extension of its broader South Asian outreach, using infrastructure, swift supply chain and quiet diplomacy to knit the region into its economic orbit. For India, it is a moment of reckoning, the influence it once assumed as geographic entitlement must now be backed by speed and results. Each player brings not just energy, but an economic alignment that will shape Dhaka's choices. Chinese capital ties Bangladesh into yuan-denominated infrastructure finance; Gulf LNG deals anchor it to fossil fuel import dependence; Western-backed renewables come with decisions and procurement rules too stringent to keep pace with need.
The coming months are decisive. Kathmandu, shaken by a Gen Z-led uprising that unseated KP Oli and left an interim government heading into elections within six months, still has to align hydropower projects set to come online late this decade. Nepal's new political volatility has only sharpened the stakes. While in Dhaka, the Bangladesh Nationalist Party (BNP), long marginalized under Hasina, is now seen as the frontrunner. What happens in the months after Bangladesh's vote could redraw the energy map of the eastern subcontinent. A post-election thaw could let Delhi broker durable trilateral accords linking Nepal's and Bhutan's hydropower to Bangladesh's industry through Indian corridors.
Moving fast after the vote to lock in approvals would turn Modi's “Neighbourhood First” slogan into enduring leverage. For Nepal and Bhutan, it would convert hydropower potential into sustained exports; for Bangladesh, it would deliver stable, low-carbon electricity, bolstering energy security and export competitiveness under stringent EU carbon rules.
But India won't be alone at the table. And it won't be a vacuum that follows – it will be Beijing. Chinese state firms already dominate coal, gas, and renewables in Bangladesh. Beijing is already aligning its energy and finance strategies with the contours of a multipolar order in Asia, one defined by the quiet consolidation of supply chains, capital flows, and influence. They move quickly, finance fast, and don't wait for political seasons to align. Gulf LNG suppliers and Western financiers are not far behind. The real competition isn't about who arrives, it's about who builds first and stays longest.
Nepal has seen this play before. When India couldn't match China's speed, Chinese electric vehicles arrived as affordable products that worked in hydropower-rich countries ready to electrify. Low tariffs, a growing middle class, and abundant cheap power created a perfect opening. Today, roughly four out of five new cars on Nepali roads are Chinese. Now, the same logic is moving east.
As Bangladesh's demand surges, Dhaka won't wait around. It will sign with whoever can deliver power cheaper, reliable, and on schedule. The window is narrow. Geography gives India the leverage to connect the Himalayas to the Bay of Bengal along with its direct supplies, but leverage without speed erodes fast. Beijing, meanwhile, is already laying tracks through Bangladesh's energy landscape, moving faster than its neighbors and locking in long-term influence one project at a time. If it hesitates, Beijing will seize the initiative and move largely uncontested, defining the terms of this new regional architecture while Delhi scrambles to catch up.
