Dhaka has sought higher volumes of diesel from India to address an acute energy shortage
India may link its decision on Bangladesh’s request for additional diesel supplies to progress on stalled development projects financed through its Lines of Credit (LoCs), as New Delhi weighs its next steps amid uncertainty over Prime Minister Tarique Rahman’s proposed visit, sources familiar with the matter said.Dhaka has sought higher volumes of diesel from India to address an acute energy shortage, with the request currently under examination by New Delhi. The move could provide India an opportunity to seek progress on projects that have remained stuck amid strained bilateral ties, the sources said.“Bangladesh’s request for more diesel could become part of wider bilateral discussions on the fate of India-funded infrastructure projects that remain stuck, with movement on the two issues potentially being calibrated together,” a source tracking the matter told businessline.Three LoCsIndia had extended three major LoCs to Bangladesh, totalling about $7.3 billion, to finance infrastructure and connectivity projects in sectors including roads, railways, irrigation, shipping and ports.. However, implementation has been slow. Of the projects under the LoCs, 15 have been completed and eight are classified as ongoing, while about 11 have been identified for cancellation, most of them still at the preparatory stage.There is uncertainty on the fate of these projects, as political ties between New Delhi and the Rahman-led government in Bangladesh remain unsettled and there is no confirmed date for the PM’s proposed visit to New Delhi, the source said.“India is keen to go ahead with the projects as it has to be also watchful of China’s aspirations in Bangladesh,” another source stated. A deeper Chinese presence in ports, connectivity and industrial infrastructure could strengthen Beijing’s strategic footprint in India’s immediate neighbourhood.“We are hopeful that as the Rahman government settles in, it will appreciate the mutually beneficial ties between the two countries and the things would move smoother. Concessions are not always made unilaterally,” the first source added.Power shortageBangladesh is going through an acute power shortage and has asked India for additional diesel supplies. Dhaka has ordered shops, malls and markets to close by 8 pm to save energy, while hospitals, pharmacies and restaurants exempted.Earlier this month, the MEA confirmed that it had received Bangladesh’s request for additional diesel and was examining it. “We have an ongoing arrangement with Bangladesh on diesel supply. An additional request will be examined while keeping in mind our own requirement, refining capacity and also the availability of diesel here,” MEA Spokesperson Randhir Jaiswal said at a news briefing.India’s continued sheltering of former Bangladesh Prime Minister Sheikh Hasina, who fled to India on August 5, 2024, after anti-government agitators targeted her residence, has been a source of tension with Rahman and his Bangladesh Nationalist Party (BNP), which has repeatedly sought her extradition and criticised New Delhi for allowing her to remain in India.Hasina’s decision to hold a press conference earlier this month where she strongly criticised the BNP has strained ties further.Published on August 23, 2026
