Bangladesh signs $335.78 million Chinese loan to expand and modernise Mongla port

Bangladesh has signed a major financing agreement with China for the expansion and modernisation of its Mongla port. The loan agreement was signed on October 10, 2026, between the Bangladesh government and the Export-Import Bank of China. Under it, China will lend Bangladesh 2.404 billion Chinese yuan, equivalent to $335.78 million.

The agreement was signed by Aliya Meher, Joint Secretary in Bangladesh's Economic Relations Division, and Fengjun Tian, Assistant General Manager of China Exim Bank. The loan will carry annual interest of 2 per cent. A total of 20 years has been given for repayment, including a five-year grace period.

Mongla is Bangladesh's second most important seaport after Chattogram. The plan is to upgrade the port's infrastructure on a large scale with Chinese help. The project will build two modern container terminals, a container yard, a container delivery yard and a separate cargo yard for handling goods. These facilities are expected to raise the port's cargo-handling capacity, make loading and unloading of ships more efficient and put in place the infrastructure needed for international trade.

The port is linked to the Bay of Bengal and lies about 80 km from the Indian border. For this reason, China's growing economic involvement here is being viewed from the perspective of India's security and strategic interests.

The matter is also in the spotlight because a proposed Indian economic zone near Mongla port was cancelled earlier. Under a 2015 bilateral cooperation arrangement, there was a plan to build an Indian economic zone on about 110 acres near the port. India had chosen Evita Constructions, a company linked to the Hiranandani Group, for it. However, the interim government led by Muhammad Yunus cancelled the project in 2025, citing delays in the work. Bangladesh officials had said the decision was taken because the project had made no progress.

In June 2026, the Bangladesh Economic Zones Authority signed a memorandum of understanding with the Chinese state-owned China Civil Engineering Construction Corporation to develop an economic zone near Mongla port. The project relates to the same 110 acres that had earlier been earmarked for India. The memorandum was signed during Bangladesh Prime Minister Tarique Rahman's visit to China. The June memorandum on the economic zone and the October loan agreement for port modernisation are, however, two separate agreements.

Relations between India and Bangladesh came under strain after the fall of the Sheikh Hasina government. The issue of Hasina's extradition has also figured in talks between the two countries. Bangladesh has sought her extradition, while India has said it will consider the legal process involved.

It remains to be seen how these projects are implemented and what effect they have on India-Bangladesh trade and regional relations.