A Future Pivoted on Ballot

Bangladesh has completed the most crucial year of its political and economic transition since the student-led protests over a controversial job quota system spiralled into nationwide unrest in July 2024, leading to the fall of the Sheikh Hasina government on August 5. After she fled to India, Bangladesh has been led by an interim government, with Muhammad Yunus, a Nobel Peace Prize winner, at its helm as the Chief Advisor. On February 28, 2025, the National Citizen Party (NCP) was established by the Students Against Discrimination and the Jatiya Nagorik Committee. Popular student leader Nahid Islam from the interim government became its convener. The party leaders describe their party as centrist and pluralist. The NCP is described as the first student-led political party in the history of Bangladesh.

On July 31, Human Rights Watch (HRW) alleged that the interim government appears stuck, juggling an unreformed security sector, sometimes violent religious hardliners, and political groups that seem more focused on extracting vengeance on Hasina’s supporters than protecting Bangladeshis’ rights. Currently, Bangladesh government faces three major challenges: (i) stabilising its economy, especially the export dependent garment sector, (ii) instilling confidence among its citizens and foreign investors about the country’s financial and democratic future by holding a fair and peaceful general election, and (iii) reviving the secular social environment by controlling the growing influence of Islamist parties.

In its latest Development Outlook Report, released on April 9, 2025, the Asian Development Bank (ADB) has downgraded Bangladesh’s growth forecast to 3.9 per cent for the current fiscal year 2024-25 – down from 5.1 per cent in its September 2024 forecast. In the FY 2023-24, Bangladesh grew at 5.8 per cent and the ADB’s forecast for FY 2025-26 is 5.1 per cent. The ADB also warns that the 12-month average inflation in Bangladesh is expected to accelerate further to 10.2 per cent in FY25 from 9.7 per cent in FY24 due to inadequate market information, supply chain constraints, and the depreciation of the taka.

China has remained the most important trading partner of Bangladesh, while the Indo-Bangladesh trade has declined significantly during the post-Hasina regime. Between May 2024 and May 2025, the exports of Bangladesh to China increased by USD 18.8M (24.4 per cent), from USD 77M to USD 95.8M, while imports decreased by USD 397M (17.9 per cent) from USD 2.22B to USD 1.83B. In May 2025, India exported USD 878M and imported USD 168M from Bangladesh, resulting in a positive trade balance of USD 711M. Between May 2024 and May 2025, the exports of India to Bangladesh decreased by USD 106M (10.8 per cent) from USD 984M to USD 878M, while imports decreased by USD 13.5M (7.45 per cent) from USD 181M to USD 168M.

The Indian state of West Bengal, which shares the longest land border with Bangladesh, has suffered most since May this year when the Indian government imposed land port restrictions on the import of certain goods, such as readymade garments and processed food items, from Bangladesh. The number of import trucks and rakes handled at Petrapole (a land port) fell to 1,654 in June, down from 3,886 in May 2025. The peak monthly figure was 4,900 in 2023, while average volumes typically remain above 3,500.In July; The Petrapole Clearing Agents’ Staff Welfare Association wrote a letter to West Bengal Chief Minister Mamata Banerjee, seeking her intervention to lift the Centre’s ban on imports of jute products and garments from Bangladesh via land routes.

Recently, Bangladesh’s interim leader, Muhammad Yunus, met the leader of the Bangladesh Nationalist Party (BNP) in London. The BNP wanted an election by December 2025, while the interim government had been aiming for April 2026, saying it needed time to implement a host of reforms. It is reported that Yunus and Rahman have now agreed that polls could be held in February — if sufficient progress on reforms is made. However, political observers fear that the dismal law and order situation, unchecked unruly mobs, and encouragement of depoliticisation are the obstacles for a free and fair election, reports DW. It may be recalled that within two years of Sri Lanka’s political uprising (April-July 2022) economic crisis and bankruptcy, which discredited traditional political parties, Sri Lanka experienced a historic political transformation through peaceful elections in 2024 that put an end to the country’s dynastic politics. Anura Kumara Dissanayake (AKD) of the left-wing People’s Liberation Front won the presidency. Sri Lanka’s experience of ending dynastic politics through peaceful elections could be a model for Bangladesh.

In early 2026, the Assembly elections are also expected to be held in the Indian states of Assam and West Bengal—two neighbouring regions of Bangladesh, worst hit by the partition of Bengal in 1947. In these assembly elections, illegal immigrants, mostly from Bangladesh and Myanmar, are a major issue. In addition to these, elections may also be held in Myanmar around that time as Myanmar’s military on Thursday (July 31) nominally transferred power to a civilian-led interim government ahead of a planned election, with the junta chief remaining in charge of the war-torn country in his other role as acting president. The coming few months are vital for the political stability of this region of SouthEast Asia, which is strategically very important to both China and the USA.

Bangladesh’s Islamists are readying to make political gains after being crushed for years by the government that was overthrown in a mass uprising last year. Influential Islamists promise sharia as they ready for polls, reports The Hindu. Thousands of Bangladeshi Islamists rallied in Dhaka in May. Hefazat-e-Islam—an influential pressure group made up of multiple political parties, Muslim organisations, and religious schools—issued a string of demands at the rally, including the abolition of a government women’s commission seeking equality. “If a government attempts anything anti-Islamic in a country where 92 percent of the population is Muslim, we will reject it immediately,” claimed one demonstrator. It is reported that the revival of Islamic fundamentalists has sparked worries from smaller groups, including Muslim Sufi worshippers and the Hindu minority, who together account for less than a 10th of the population. Women, in particular, have expressed concern. Islamists have demanded an end to a band of activities, including cultural events deemed “anti-Islamic”—from music to theatre festivals, women’s football matches and kite-flying celebrations.

The revival of Islamist parties during Yunus’ regime in Bangladesh has reinvigorated Islamophobia among the Hindu fundamentalists in India. Muslims—especially Bengali-speaking ones—are being regularly harassed, beaten, murdered, and jailed for no reason in different states ruled by the Bharatiya Janata Party (BJP). The curse of the partition of Bengal is still haunting millions of Bengali-speaking citizens of India who are stigmatised as ‘illegal immigrants’ of Bangladesh.

The writer is a professor of Business Administration who primarily writes on political economy, global trade, and sustainable development.
Views expressed are personal