Dhaka cancels Indian SEZ deal, transfers it to China

Bangladesh has cancelled the long-delayed Indian Economic Zone project in Mirsharai, Chattogram, and reassigned the nearly 850-acre site to China.

The decision follows years of stalled progress. India did not approve key overseas tenders despite a 2015 MoU and repeated requests from Dhaka. Only about 1% of allocated funds were utilised.

The shift comes amid rising diplomatic tensions and after former Prime Minister Sheikh Hasina’s virtual address to Indian media, which reportedly influenced Dhaka’s reassessment of bilateral projects.

Bangladesh has since signed a major agreement with China’s state-owned China Electronics Technology Group Corporation International (CETC) to build a UAV assembly plant and transfer related technology, positioning the country as a new drone-manufacturing hub in South Asia.

China also signed an agreement in 2025 to supply Bangladesh with 20 J-10CE fighter jets. Their deliveries will begin this year, and Beijing has offered Dhaka extended payment timelines.

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