New Delhi: In a move with significant geopolitical and maritime implications, Bangladesh has finalized a USD 335.78 million (RMB 2.404 billion / Tk 3,592.8975 crore) concessional loan agreement with the Export-Import Bank of China. Official media reports confirmed on Monday, October 12, 2026, that the agreement will fund the “Expansion and Modernisation of Mongla Port Facilities” project. Signed on Saturday between Bangladesh’s Economic Relations Division (ERD) and China EXIM Bank, the financing provides a 2 per cent interest rate over a 20-year repayment schedule, including a five-year grace period.
Why Chinese investment in Mongla is worrying for India?
Situated on the east bank of the Pasur River, Mongla Port serves as Bangladesh’s second-largest seaport. The development is a huge concern for India as the port is roughly 80 kilometers west of the Indian border. The new capital investment will fund the construction of two modern container terminals, a container delivery yard and dedicated cargo-handling facilities executed by the Mongla Port Authority.
The signing follows bilateral understandings reached during Prime Minister Tarique Rahman’s official visit to Beijing in June 2026. The development also comes a year after the Muhammad Yunus-led interim administration cancelled a planned 110-acre Indian Economic Zone near the port due to construction delays, triggering strategic observations over China’s growing infrastructural footprint in close proximity to Indian territory.
China’s concessional interest rate to Bangladesh
China will provide the loan at a concessional interest rate of 2 per cent, with a 20-year repayment period, including a five-year grace period, according to a statement by the Finance Ministry’s Economic Relations Division (ERD). The ERD signed the agreement with China’s EXIM Bank on behalf of the two sides for the “Expansion and Modernisation of Mongla Port Facilities” project, the statement said.
The development comes a year after the Muhammad Yunus-led interim government cancelled an Indian Economic Zone project planned on 110 acres of land near Mongla Port, saying the Indian government-nominated developer had failed to begin physical construction within the stipulated timeframe.
The land had been earmarked for India under a 2015 bilateral agreement and the Indian government later appointed Hiranandani Group subsidiary Evita Constructions to develop the site.
The loan agreement follows an understanding reached between Bangladesh and China during Prime Minister Tarique Rahman’s visit to Beijing in June. India has previously flagged concerns over China’s expanding footprint in Bangladesh, with projects in strategically significant areas drawing particular attention because of their proximity to Indian territory.
(With inputs from agencies)
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