Bangladesh’s Regime Change – The India-Bangladesh BIT (2009) and the Joint Interpretative Notes (2017)
(The American Review of International Arbitration (Blog))
In August 2024, a violent uprising in Bangladesh (dubbed the ‘Monsoon Revolution’) led to a political regime change, ending the fifteen-year term of Bangladesh’s previous Prime Minister. Taking stock of Bangladesh’s economy on priority, the new interim government (supported by the military and with constitutional approval by the Bangladeshi Supreme Court) recently issued a 400-page White Paper on the State of the Bangladesh Economy, highlighting the previous government’s alleged lapses (stating that over US$240 billion had been embezzled and laundered over fifteen years) and identifying projects that had operated/been awarded on questionable terms and regulatory exemptions. The interim government plans to review and renegotiate previous contracts and projects, and clearer next steps will likely emerge through Bangladesh’s forthcoming economic mid-term plan (2025 – 2027).
Meanwhile, Indian investments in Bangladesh face an uncertain future, not least given a prominent “India Out” protest in Bangladesh in 2024, before the uprising. India is the largest exporter of goods to Bangladesh (approximately US$11 billion, FY 2023 – 2024), and Indian companies have invested heavily in Bangladesh (around US$3 billion in FDI). These Indian companies are reportedly now facing payment delays and investment protection issues. As a prominent example, Indian power companies continue to be owed large sums as unpaid dues under power-purchase agreements, the terms of which will extend into the next decade, with at least one contract under investigation by Bangladesh. The regime change has also impacted commitments with Indian entities under MoUs for long-term rail connectivity, pipeline projects, and ongoing infrastructure projects in the energy sector.
The situation calls into focus the text of the India-Bangladesh BIT 2009 (the “2009 BIT”), the impact of the India-Bangladesh Joint Interpretative Notes 2017 (the “2017 JIN”), and the broader issue of the interpretive value of joint interpretative agreements in international law.