China to Develop Mongla Economic Zone After India-Backed Project Was Dropped

Bangladesh has taken a major step toward strengthening its economic partnership with China by signing an agreement to establish a new economic zone in Mongla, replacing a previously planned India-supported project that failed to move forward.

The memorandum of understanding (MoU) was signed in Beijing between the Bangladesh Economic Zones Authority (BEZA) and the state-owned China Civil Engineering Construction Corporation (CCECC). Under the agreement, the two sides will work together to develop the China-Bangladesh Mongla Port Economic Zone on approximately 110 acres of land adjacent to Mongla Port in Bagerhat.

Prime Minister Tarique Rahman, who is currently on an official visit to China, attended the signing ceremony as part of a series of bilateral investment and economic cooperation initiatives aimed at attracting greater foreign investment into Bangladesh.
 

The project represents a notable change in Bangladesh's investment priorities. The same land had originally been allocated in 2015 for an Indian economic zone under a bilateral agreement between Dhaka and New Delhi. However, the India-backed development was officially cancelled in 2025 after the designated developer failed to begin land development within the agreed timeline.

Officials said the cancellation cleared the way for new investment proposals, with Chinese authorities expressing interest in developing the site shortly afterward.

The Mongla agreement is among several investment-related deals signed during the Prime Minister's visit to Beijing, reflecting efforts by both countries to deepen economic cooperation across manufacturing, infrastructure, logistics and industrial development.

In addition to the Mongla project, BEZA also signed a separate developer agreement with China Road and Bridge Corporation (CRBC) to advance the planned Chinese Economic and Industrial Zone in Anwara, Chattogram. The initiatives are expected to strengthen Bangladesh's position as a regional manufacturing and export hub while creating new employment opportunities.

Bangladesh Investment Development Authority (BIDA) also signed a memorandum of understanding with the China Council for the Promotion of International Trade (CCPIT). The agreement is intended to encourage greater Chinese investment, strengthen business-to-business cooperation and improve support services for investors seeking opportunities in Bangladesh.

Another investment announcement involved China's Handa Group, which has been allocated land in the Keraniganj Economic Zone. According to BIDA, the company plans to invest approximately $220 million in industrial operations, further expanding China's manufacturing footprint in Bangladesh.

The Mongla Economic Zone has a long history dating back to 2015, when Bangladesh and India agreed to establish two Indian economic zones one in Mongla and another in Mirsarai. The initiative was expected to promote bilateral trade and industrial cooperation, supported by India's Line of Credit programme.

To facilitate the proposed investment, infrastructure including a railway connecting Khulna with Mongla Port was developed with Indian financial support. In 2018, India's Hiranandani Group was selected as the project's developer, while its subsidiary Evita Constructions Private Limited later signed an agreement with BEZA in 2022.
 

Despite those commitments, officials said the developer did not begin the required land development within the contractual deadline. Following Bangladesh's political transition in 2024, the project remained inactive before being formally removed from the government's priority list in 2025.

According to BEZA officials, Chinese investors have expressed strong interest in establishing high-value manufacturing industries within the new Mongla Economic Zone. Potential sectors include telecommunications equipment, electronics manufacturing, advanced industrial production and modern logistics and warehousing facilities.
 

BEZA Executive Member Major General (Retd.) Md. Nazrul Islam said the newly signed agreement currently serves as a government-to-government understanding. The Chinese side will now prepare a comprehensive master plan outlining the proposed industrial layout, infrastructure requirements and investment strategy.

Following submission of the master plan, technical and negotiation committees from both sides will evaluate the proposal before moving toward detailed implementation agreements.

Officials also indicated that BEZA does not intend to make significant direct financial investments in the project. Instead, the authority will provide the land, while the Chinese developer will finance infrastructure construction and industrial development. The final ownership structure, including any equity participation by BEZA based on the value of the land, will be determined during future negotiations.

The latest agreement highlights Bangladesh's continued efforts to diversify foreign investment, expand industrial capacity and strengthen strategic economic partnerships as the country pursues long-term export growth and industrial modernization.