'Playing Chinese Debt Trap Diplomacy': India Refutes Yunus' 'Bangladesh As Guardian' Statement | Exclusive

Last Updated:March 31, 2025, 17:24 IST

Top government sources said Bangladesh interim leader Mohammad Yunus is trying to portray his country as a "guardian" of India’s access. They said India rejects his territorial claims, which are factually incorrect

Chinese President Xi Jinping (R) during a meeting with Chief Adviser of Bangladesh Muhammad Yunus on March 28. (Image: @SpoxCHN_MaoNing/PTI)

India has strongly objected to Bangladesh interim leader Mohammad Yunus calling the northeast a landlocked region and said it was a push for Chinese expansionism.

According to top government sources, Yunus is trying to portray Bangladesh as a “guardian" of India’s access. They said India rejects his territorial claims, which are factually incorrect.

The sources told CNN-News18 that India demands a retraction from the Bangladeshi leader as it was a statement delivered on the directions of China to create tension in the northeastern states of India.

Yunus, while inviting China to Bangladesh, sparked the controversy when he said: “Seven states of India in the east is a landlocked country…landlocked region of India. They have no way to open up to the ocean. Bangladesh is the only guardian of the ocean. This opens a huge possibility…can be a huge extension for the Chinese economy…build things…produce things…market things."

The sources further said Yunus is not only undermining India but disregarding bilateral agreements on trade and routes. “The seven northeastern states are integral parts of India with a vast coastline and multiple major ports that serve the entire country. India’s northeast is not landlocked but interconnected through legally binding treaties with Bangladesh," they said.

Bangladesh has an existing $4 billion debt to China and risks from projects like the Payra Port, which are Chinese-funded with 70 per cent loans.

“Yunus’ statement advocating Chinese monopolies over regional connectivity contradicts Bangladesh’s principles of non-alignment with China," the sources said.

They said India is fully capable of the development and connectivity of its own territories. This statement undermines India’s sovereignty and potentially serves the strategic objectives of other countries, they added.

CNN-News18 had earlier reported how Bangladesh will be the new Sri Lanka for China. The debt crisis in the island nation, which has fuelled major financial and political turmoil since 2019, was heavily influenced by Chinese loans.

Intelligence sources said Chinese acceptance of most of the terms suggest their use of underdeveloped countries against India in the region. The meeting between Yunus and Chinese President Xi Jinping in Beijing was about business opportunities between the two countries.

Yunus requested Chinese aid in relocating manufacturing industries to Bangladesh. He wanted China to reduce interest rates on Chinese loans from 3 per cent to 1 to 2 per cent. He also wanted to waive commitment fees for Chinese-funded projects in Bangladesh.

WHAT IS ‘CHINESE DEBT DIPLOMACY’?

China, which is Bangladesh’s fourth-largest lender with $7.5 billion in loans, was also asked to support various development projects. Bangladesh’s acknowledgment of the Global Development Initiative (GDI), even without full participation, is a diplomatic victory for China.

The sources further said this reflects Bangladesh’s aim to ease its financial burden while continuing to leverage Chinese investment. This move signals the neighbouring country’s intent to boost its industrial base and create jobs through Chinese investment.

They further said China sees Bangladesh’s location in South Asia as key to expanding its regional influence, especially against India. By offering loans and investments, China aims to deepen Bangladesh’s economic reliance.

This aligns with China’s broader debt diplomacy playbook, where loans can bind countries into long-term partnerships favourable to Beijing. Supporting the relocation of manufacturing industries to Bangladesh allows China to offload lower-end production, cutting domestic costs while maintaining control over global supply chains.

This also pushes economic dependence of Bangladesh on China ensuring it remains tied to its industrial ecosystem and technological advancement. China is using its financial clout and technological expertise to expand influence in South Asia.

News india 'Playing Chinese Debt Trap Diplomacy': India Refutes Yunus' 'Bangladesh As Guardian' Statement | Exclusive