India halts railway projects linking seven sisters to mainland via Bangladesh

The Indian government has halted a series of cross-border railway projects intended to link the country's seven northeastern states with the mainland via Bangladesh, alleging political unrest and safety concerns for workers in the neighbouring country.

The decision has suspended nearly ₹5,000 crore worth of project funding and construction activities, disrupting at least three active projects and halting survey work on five more, reports The Hindu Business Line.

According to sources, while India has suspended its railway projects in Bangladesh, the government is now considering alternative connectivity routes to the seven sister states through Nepal and Bhutan. Plans for new projects worth ₹3,500-4,000 crore in these neighbouring countries are currently being explored.

The stalled railway projects were crucial for connecting India's landlocked northeastern states via Bangladesh's rail network and were intended to ease dependence on the narrow Siliguri Corridor, commonly known as the "chicken's neck," which links the region to mainland India.

"So right now, we are not supplying construction materials or other items to Bangladesh. There is a halt on project funding for the connectivity route through the neighbouring country. There needs to be some political stability first. However, construction work on the Indian side is going on as planned," an official said, requesting anonymity.

India's trade relationship with Bangladesh – valued at $12.9 billion in 2024 – remains a cornerstone of regional economic ties, with Bangladesh being India's largest trading partner in South Asia.

Projects stalled

Three India-assisted railway projects have now been suspended – the Akhaura-Agartala Cross-Border Rail Link (including the Khulabura-Sahabajpur rail line), the Khulna-Mongla Port Rail Line, and the Dhaka-Tongi-Joydebpur rail expansion project.

The Akhaura-Agartala project, backed by nearly ₹400 crore in Indian grant assistance, covers a 12.24 km rail link — 6.78km in Bangladesh and 5.46km in Tripura. The Khulabura-Sahabajpur rail line, part of this project, was designed to boost connectivity to Assam by using existing trade routes and laying new tracks.

The Khulna-Mongla Port Rail Line, funded under a concessional Line of Credit with a total cost of $388.92 million (₹3,300 crore), involves constructing about 65km of broad-gauge track between Mongla Port and Khulna's existing rail network. The project also enables Mongla, Bangladesh's second-largest port, to connect with the broad-gauge railway, where India holds operational rights to a terminal.

The Dhaka-Tongi-Joydebpur railway expansion project, scheduled for completion in June 2027, had recorded less than 50% progress as of last year. Around ₹1,600 crore of the project was expected to come from Indian assistance via EXIM Bank, though funding clearance issues have reportedly delayed its execution, sources said.

"In another five, there were location surveys that were being carried out. They have been stalled," a second official said.

Alternative regional strategy

In response, India is pivoting to domestic and alternative regional strategies. 

The government is exploring line doubling and quadrupling in Uttar Pradesh and Bihar — key routes feeding into the Siliguri Corridor – to boost capacity and reliability, with survey work already underway, according to a Railway official. 

At the same time, New Delhi is looking at rail links through Bhutan and Nepal, using existing agreements like the India-Nepal rail pact and Bhutan's proximity to the Northeast to reduce dependence on Bangladesh, despite logistical challenges. 

Previous plans for India-Nepal connectivity included building 190 km of new lines between Biratnagar and New Mal, and 12.5km in the Galgalia–Bhadrapur–Kajali Bazar section. 

Additionally, in West Bengal, 170km of new railway lines are planned for the Kumedpur–Ambari Falakata segment, along with 25km of new tracks to strengthen links between Bengal and Bihar.