A look at the status of Bay of Bengal–Northeast value-chain concept proposed by former Japan PM Kishida

Former Japanese Prime Minister Fumio Kishida proposed the Bay of Bengal–Northeast India Industrial Value Chain Concept during his 2023 visit to India. It was envisioned as a core pillar of Japan's updated Free and Open Indo-Pacific (FOIP) vision. Its primary aim was to form a trilateral economic cluster by linking Northeast India with Bangladesh and leveraging deep-water access to the Indian Ocean.

Kishida's idea was to treat the landlocked Northeast India, which is rich in resources, and Bangladesh, in need of industrial diversification, as a single interconnected economic zone. It was supposed to be done in three ways. First, by developing the Matarbari Deep-Sea Port in Bangladesh under Japan's "BIG-B" (Bay of Bengal Industrial Growth Belt) initiative. Kishida wanted it to be like a high-capacity gateway equivalent to major global ports. Second, strengthening connectivity through the Northeast.

This included constructing robust road, rail, and bridge infrastructure across Indian states like Assam, Mizoram, and Tripura. All of these would hook directly into Bangladesh’s transport networks. Third, Japanese and global private sectors would be encouraged to invest in building manufacturing and supply hubs. Raw materials from Northeast India could flow smoothly to Bangladesh for processing and be exported globally via the Bay of Bengal.

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Progress and current status

Work on the infrastructural front has made reasonable progress. As part of India’s "Act East" policy, transport corridors have been expanded. This includes national highway coverage in the Northeast under the Bharatmala scheme. Budget allocations for the region's rail connectivity has risen sharply.

The Japan International Cooperation Agency (JICA) has funded critical highways, bridges, and continued with the multi-phase construction of the Matarbari Deep-Sea Port, maintaining its heavy ODA loan commitments in both India and Bangladesh. The project aligns closely with broader regional goals, notably the BIMSTEC Masterplan for Transport Connectivity. It aims to seamlessly integrate waterways, rail, and digital networks across the Bay of Bengal.

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Challenges

However, the political and strategic landscape is posing significant challenges to the progress of the plan. Japan and India planned to use this value chain to counter Chinese maritime influence in the Bay of Bengal. However, a change in regional dynamics has created a challenging situation. For example, Bangladesh has awarded the development of an economic zone at Mongla Port, its second-largest seaport, to a Chinese state-owned enterprise. While roads and ports are being built, "soft infrastructure" is still moving along slowly.

This includes harmonising customs procedures, aligning maritime tariffs, and establishing standard cross-border regulations. A high-efficiency industrial value chain cannot happen with these bureaucratic trade barriers acting as a roadblock.

The Bay of Bengal–Northeast value chain has moved from being just a conceptual blueprint into an operational economic corridor. The Northeast is being connected to the sea. However, its ultimate success as a strictly Japan-India-backed manufacturing hub depends on how the two countries navigate the regulatory bottlenecks and growing economic competition in the Bay.