Bangladesh hunts for $230 billion stashed abroad: As its economy struggles, a look at how Indian liberals once cited it to attack the Modi government

Bangladesh is intensifying its efforts to recover assets worth over $230 billion allegedly siphoned from the country during the 15-year rule of ousted Prime Minister Sheikh Hasina. Earlier, the interim government led by Muhammad Yunus had said that over $234 billion was ‘stolen‘ from Bangladesh, and even claimed that the United Kingdom was “morally obliged” to help in recovery. Now, the PM Tarique Rahman-led government is desperately chasing the mirage of $230 billion as Bangladesh grapples with economic challenges exacerbated by the West Asia crisis. Muhammad Yunus-led interim government had claimed that over $16 billion was being drained out of Bangladesh annually in the later years of Hasina’s rule. Reports say that the new government has “doubled down” on recovery efforts. The Rahman government is actively seeking international support and lodging cases against tycoons and Hasina-era figures. The government, though desperate, is not delusional. Bangladesh lacks the requisite expertise in complex cross-border asset tracing and prosecution, which, anyway, is like searching for a needle in a haystack. Bangladeshi officials say that it will take years, if not decades, to claw back any significant amounts. Since Sheikh Hasina was forced out of power and her country, the economy of Bangladesh has hollowed out. The Bangladeshi government officials admit that the country’s economy is in shambles. Recent reports indicate that Bangladesh’s banking sector is in a near-collapse state, with non-performing loans (NPLs) surging to around 30 to 35% of total credit, making it among the highest globally. Several banks have become technically insolvent or forced into mergers. Meanwhile, Bangladesh’s Foreign Exchange Reserves, which peaked under the Hasina government near $48 billion in 2021, slumped to the $20 billions range by 2024. Experts attribute this sharp decline partly to mismanagement and looting. Bangladesh’s GDP growth crashed to 3.49% in FY 2024-25, although the GDP is projected to grow by 4.6% to 4.9% for the 2025–2026 fiscal year. The US-Israel war against Iran and consequent energy crisis have severely impacted Bangladesh, which imports 95% of its oil and fuel. Bangladesh’s Finance Minister Amir Khosru Mahmud Chowdhury recently said that the country’s treasury “bled” around $4 billion over the last three months due to higher energy prices resulting from the blockade of the Strait of Hormuz. The country is forced to request a $3 billion loan from international lenders, including the IMF, World Bank, and the Asian Development Bank. This move came after Bangladesh’s fiscal deficit rose to a projected 3.6 per cent in the current financial year. In this wake, Minister Mahmud Chowdhury said that the BNP-led government in Bangladesh is doubling down on recouping what it describes as “plundered assets”. “Whatever we may be able to recover at a time like this, when we are really having serious fiscal issues, any amount of money helps,” he said. In April this year, PM Tarique Rahman informed the Bangladeshi Parliament that recovery efforts are being bolstered “through information exchange, asset identification and enhanced mutual legal assistance with the concerned countries”. He emphasised that the Rahman government is “placing the highest priority on recovering laundered assets abroad.” Bangladesh is pursuing its allegedly siphoned assets in the UK, US, United Arab Emirates and Singapore, among other countries. A task force has been formed under the new central bank governor, Mohammed Mostaqur Rahman, to trace and retrieve the missing Bangladeshi funds abroad. Further lamenting the alleged loot of Bangladesh’s funds, Mahmud Chowdhury said, banks’ balance sheets were “nil or in the minus” territory, forcing the government to recapitalise them. “They (Sheikh Hasina-linked businessmen and politicians) took $234bn out of the country, laundered out, so the banks are in distress,” Chowdhury said. Earlier in June 2026, the Rahman government was compelled to earmark $3.2bn for an emergency lifeline to help revive the banking sector. Inflation has also remained a perpetual challenge for Bangladesh’s economy. Even after months of monetary tightening by the new central bank governor, inflation is still above 8%, making it the highest in South Asia. As of May 2026, Bangladesh’s inflation rate stands at 9.42%, rising from 9.04% in April 2026. Before, during, or after the Iran war, the cost of food, fuel, rent, and essential services kept surging for ordinary households in Bangladesh. The country was still struggling to recover from the impact of the COVID-19 pandemic when political instability engulfed Bangladesh. The country’s overall poverty rate stands at an estimated 27.9%, with extreme poverty at 9.3%, meaning that approximately 27.9% of the population lives below the national poverty line, meaning over a quarter of the country is considered poor. A significant section of Bangladeshi families who were earlier considered “just above” the poverty line are now slipping back into poverty because their earnings can no longer keep up with rising prices.  In addition, the government borrowing rates have also been troubling. Bangladesh’s total public debt burden has exceeded Tk 22 lakh crore, representing approximately 40.2% to 41.8% of the country’s GDP. Earlier this month, the Bangladeshi media reported that even if the government does not take fresh loans in the next financial year, which is highly unlikely, “it will still have to spend approximately BDT 4.35 trillion solely on repaying the principal and interest of previously incurred debt.” The political instability in the country over the past two years has resulted in a steep drop in investment in Bangladesh. The new government is working to attract foreign investments; however, Bangladesh’s tendency to descend into communal anarchy still remains a concern for investors, who continue to not feel confident enough to inject fresh capital or start new projects in the country. Bangladesh’s textile industry, once booming, is now in shambles. The country’s textile industry, valued at around $23 billion, forms the backbone of the nation’s economy, supplying yarn to the ready-made garments sector, which accounts for approximately 85% of the country’s total export earnings. However, the political instability and senseless hostilities towards India added to Bangladesh’s troubles. With India set to ink deals with the European Union and the US, the country’s textile and apparel industry will get a massive boost. The US is already the largest export market for Indian textiles and textile products, with exports valued at $10.5-11 billion annually. In February 2025, the Modi government allocated Rs 5272 crores to the Ministry of Textiles this year as compared to Rs 4417.03 crores in the Financial Year 2024-25, in a clear bid to take advantage as businesses try to move away from Bangladesh. This has further added to Bangladesh’s troubles. Imposed in May 2025 in an unannounced response to Muhammad Yunus’s hostile behaviour towards India. New Delhi imposed port restrictions on Bangladeshi goods, estimated to cost Bangladesh over $770 million. While Bangladesh may not have been an economic Utopia under Sheikh Hasina, the period between 2022 and 2025 has been described by experts as a phase of “reversal,” meaning Bangladesh is undoing years of progress in poverty reduction and other such aspects. Clearly, Bangladesh is in a deep financial quagmire and is taking desperate measures, including efforts to recover the siphoned $230 billion worth of assets stashed abroad. Ironically, this is the same Bangladesh, Indian liberal commentariat hailed as an economic Utopia, much smaller but way ahead of an economic giant India. From Germany-based YouTuber Dhruv Rathee, anti-Modi parties, to Indian leftist media outlets, all of them repeatedly cherry-picked numbers and concocted a ‘Bangladesh is ahead of India’ narrative based on half-truths and exaggerations. They would lend credence to and amplify the “Bangladesh miracle” narrative to target the Modi government, conveniently ignoring the stark differences between the nature of the economies, the population size and political realities of India and Bangladesh. While Bangladesh has a GDP of $450 billion, India is roughly 8-9 times larger, standing at nearly $4 trillion. Undoubtedly, India did not fully tap its textile potential earlier, and Bangladesh had an edge in this sector. However, India is such a massive and diverse economy that it could, and now is, exerting dominance in this arena as well. Indian liberals highlight Bangladesh’s slight edge in nominal GDP per capita ($2,911) compared to India ($2,812) as a shame on New Delhi that even an unstable country like Bangladesh is ‘ahead of us’. However, they conveniently forget that Bangladesh sometimes surpasses India in terms of per capita income due to currency fluctuations and its export-centric model. Beyond cherry-picked numbers, India remains a spectacularly larger, wealthier, and more diversified economic superpower. India remains the fastest-growing major economy, while the Indian liberals’ favourite, Bangladesh, significantly depends on India for rice, power, and other essential supplies. However, nothing better can be expected from those driven by ideological-political disdain from Modi/BJP, who earlier attacked the Modi government with ridiculous arguments like “even Taliban-ruled Afghanistan’s currency is stronger than ours”.