Another issue that has proved controversial, particularly with the BNP, is the AL's determination to forge deeper economic and diplomatic ties with India. The BNP rejects a rapprochement with India on ideological grounds. However, a rapprochement with India and improved transport and trading links are hugely important to Bangladesh economically, and both countries have vowed to improve trade links. In March turbines and machines for a power project started by Oil and Natural Gas Corporation (ONGC, a state-owned oil company based in India) in the Indian state of Tripura were transshipped through Bangladesh for the first time. The transshipment is expected to pave the way for a significant improvement in connectivity between the two countries, whose traditional transport links were in effect cut during the partition of India in 1947. Improved connectivity would help Bangladesh's poorest districts, many of which border India.

The AL government is also keen to improve transport links with its other neighbour, Myanmar. On April 3rd the prime minister, Sheikh Hasina Wajed, inaugurated the construction of a railway link that would connect the southern part of Bangladesh, Chittagong, to the southern state of Rakhine (Arakan) in Myanmar. The link will also significantly improve transport links to China. But relations between Bangladesh and Myanmar are far from harmonious. On the same day Sheikh Hasina also inaugurated a new air-force base near the country's main seaport, Cox's Bazar, to "guard Bangladesh's marine territory", which can be interpreted as a reference to a long-running dispute with Myanmar over exploration rights in the gas-rich Bay of Bengal.