Flagship Research

Bangladesh's Blue Frontier

Maritime Economy, Resources, and Strategy for the Bay of Bengal

BDPolicy Lab · Last updated 2026-05-20

Executive Summary

Bangladesh commands a 118,813 sq km exclusive economic zone and 354,000 sq km continental shelf in the Bay of Bengal, secured through the 2012 ITLOS ruling (Case No. 16, vs Myanmar) and the 2014 Annex VII Tribunal award (vs India). This maritime domain is equivalent to 80% of the country's land area, yet contributes only 3.0% of GDP and remains structurally under-exploited. The binding constraints are threefold: port infrastructure anchored to a single 9.5m-draft gateway handling 3,409,069 TEU annually through Chittagong while the Matarbari deep-sea port (18m draft, 4,000,000 TEU planned) remains under construction with Phase-1 now targeting 2029; marine fisheries under stress, with only 60% of the current 350,000 MT catch estimated within sustainable limits and IUU losses of $200-400M per year; and compounding climate vulnerability, with coastal erosion, salinity intrusion, and cyclone intensity threatening the 6,017 sq km Sundarbans blue carbon buffer. Under Prime Minister Tarique Rahman's BNP-led government, sworn in February 2026, port modernisation and the Matarbari project have been confirmed as priority infrastructure commitments, but concrete offshore energy and fisheries reform policy remains forthcoming.

EEZ Area

118,813 sq km

Marine Catch

350,000 MT

Port Throughput (2025)

3,409,069 TEU

Ship-Breaking Yards

150

Blue Economy Index

37.7/100

Chapter 1: Maritime Domain

118,813 sq km EEZ: Bangladesh's Sovereign Maritime Territory

Bangladesh's exclusive economic zone of 118,813 sq km and continental shelf of 354,000 sq km, secured through the 2012 ITLOS ruling (vs Myanmar, Case No. 16) and 2014 Annex VII Tribunal award (vs India), represent a maritime territory equivalent to 80% of the country's land area, yet the policy and institutional machinery to exploit it remains nascent.

Source: ITLOS Judgment (Case No. 16, 2012); Annex VII Tribunal Award (Bangladesh v. India, 2014); UNCLOS Art. 56-76

The Bay of Bengal is one of the world's least explored large marine ecosystems. Bangladesh's maritime jurisdiction spans 580 km of coastline, encompassing territorial seas of approximately 18,000 sq km, an EEZ of 118,813 sq km, and extended continental shelf rights over 354,000 sq km. The 2012 ITLOS judgment (Bangladesh v. Myanmar) established the maritime boundary in the Bay of Bengal, awarding Bangladesh a substantial EEZ through an adjusted equidistance line. The 2014 Annex VII Tribunal award (Bangladesh v. India) resolved the western maritime boundary, completing Bangladesh's sovereign claim over the full maritime domain.

Maritime Spatial Planning Gap

Bangladesh has yet to enact a Maritime Spatial Planning Act. The absence of a legal framework creates overlapping conflicts: trawler fishing grounds clash with artisanal fisher zones, proposed offshore wind corridors are undefined, and conservation areas have no binding enforcement mechanism. Only 8 of 26 designated offshore blocks have been meaningfully explored, a ratio that reflects both unfavourable production sharing contract terms and the absence of a National Maritime Authority with regulatory power over all marine economic activities.

Bay of Bengal Resources

The Bay of Bengal contains significant hydrocarbon reserves (estimated 5.0 Tcf of natural gas per Petrobangla/BAPEX), heavy mineral sand deposits along the continental shelf, and one of the world's largest mangrove ecosystems (the Sundarbans, 6,017 sq km on the Bangladesh side). Marine protected areas currently cover 4.0% of the EEZ, far below the CBD Kunming-Montreal Global Biodiversity Framework target of 30% by 2030.

Source: Petrobangla/BAPEX offshore block data; IUCN/MoEFCC mangrove assessments; CBD Kunming-Montreal GBF (2022)

Chapter 2: Marine Fisheries and Aquaculture

Catch Volumes, Shrimp Exports, and Sustainable Management

Marine fisheries produce 350,000 MT annually, supporting approximately 500,000 fishers along the coast. Shrimp and seafood exports generate $400.0M in foreign exchange, equivalent to roughly 0.9% of total national export earnings. Only 60% of the current catch is estimated within sustainable limits, and IUU fishing by foreign-flagged vessels costs $200-400M per year in lost revenue. Bangladesh ranks third globally in inland fisheries production (FAO).

Source: DoF Yearbook of Fisheries Statistics 2022-23; Bangladesh Export Promotion Bureau FY2023-24; FAO State of World Fisheries 2024

Hilsa: The National Fish

Hilsa (Tenualosa ilisha) accounts for roughly 12% of total fish production (570,000 MT, DoF 2022-23). Seasonal fishing bans, including the 65-day Jatka protection period and the 22-day peak breeding ban, have contributed to measurable stock recovery. Enforcement gaps persist: cross-border migration patterns shared with Myanmar and India require regional management frameworks under BIMSTEC, which remain aspirational rather than operational.

Source: DoF Bangladesh; BFRI (Bangladesh Fisheries Research Institute) stock assessment reports

Shrimp and Seafood Exports

Bangladesh earned BDT 4,532 crore from exporting approximately 77,000 MT of fish and fishery products in FY2023-24 (Export Promotion Bureau). Shrimp and seafood exports ($400.0M) face increasing competition from Vietnam, India, and Ecuador. Black tiger shrimp (Penaeus monodon) from extensive farming in Khulna and Satkhira, and white-leg shrimp (Litopenaeus vannamei) from semi-intensive systems, dominate the export basket. Key constraints include antibiotic residue compliance, EU food safety standards, disease outbreaks (white spot syndrome, EHP), and the environmental cost of mangrove conversion for shrimp ponds.

Source: Bangladesh Export Promotion Bureau FY2023-24; EU Rapid Alert System for Food and Feed (RASFF)

IUU Fishing and Deep Sea Gap

Illegal, unreported, and unregulated (IUU) fishing by foreign-flagged vessels costs an estimated $200-400M annually in lost revenue. Bangladesh lacks a modern deep sea fishing fleet capable of operating beyond the 200m isobath. Vessel Monitoring System (VMS) coverage of the artisanal fleet remains minimal. The Bangladesh Navy's maritime patrol capacity has improved under the Forces Goal 2030 programme, but enforcement capacity remains insufficient relative to the scale of the 118,813 sq km EEZ.

Source: World Bank Blue Economy report for Bangladesh; ICSF (International Collective in Support of Fishworkers)

Chapter 3: Ports and Maritime Trade

Chittagong, Mongla, Payra, and the Matarbari Deep Sea Port

Chittagong port handled a record 3,409,069 TEU in 2025, an all-time high, yet remains structurally limited by a 9.5m draft channel that bars post-Panamax vessels. The Matarbari deep sea port (18m draft, 4,000,000 TEU Phase-1 planned capacity) signed its main construction contract with a Penta-Ocean/TOA joint venture in April 2025; Phase-1 completion is now targeted for 2029, revised from earlier projections.

Source: Chittagong Port Authority (CPA) 2025 annual data; JICA Matarbari Port Development Project; BSS News April 2025

Chittagong Port

Chittagong port handles over 90% of Bangladesh's international trade. The 2025 throughput of 3,409,069 TEU was the highest in the port's history (Chittagong Port Authority), up from 3.26 million TEU in 2024. Despite this growth, structural constraints remain acute: the 9.5m draft restricts vessel size to sub-Panamax class, average cargo turnaround time exceeds four days, and road connectivity from the port to Dhaka is severely congested. The Bay Terminal project (planned capacity approximately 3 million additional TEU, main infrastructure by 2030) is intended to substantially expand port capacity, but construction has not yet commenced.

Source: Chittagong Port Authority annual statistics 2025; ADB Strategic Master Plan for Chittagong Port; FICCI Bangladesh port analysis

Mongla and Payra

Mongla port serves the southwest region (Khulna division) with approximately 100,000 TEU capacity, primarily handling bulk cargo, jute, and frozen food exports. Payra port (Patuakhali) is operational for coal and bulk cargo (10 MT capacity) but lacks container handling facilities. Both ports require channel dredging and improved hinterland road and rail connectivity to unlock meaningful trade volumes.

Source: Mongla Port Authority; Payra Port Authority operational reports

Matarbari Deep Sea Port

The Matarbari deep sea port at Maheshkhali, Cox's Bazar, is financed primarily by JICA (total project cost Tk 24,300 crore). The port's navigational channel (14.3 km long, 350m wide) was handed over to the Chittagong Port Authority on 20 September 2023. The main terminal construction contract was signed in April 2025 with a Penta-Ocean/TOA joint venture: a 760m terminal comprising a 460m container jetty and a 300m multipurpose jetty (Phase-1, Package-1). Phase-1 is now targeted for completion by 2029, following a revision from earlier 2026-27 projections. The 18m draft will allow Panamax and post-Panamax vessels, with eventual planned capacity of 4,000,000 TEU positioning Bangladesh as a Bay of Bengal transshipment hub competing with Colombo and Singapore. The BNP-led government under PM Tarique Rahman has confirmed Matarbari as a flagship infrastructure priority, with port modernisation and logistics reform listed among its economic development commitments.

Source: JICA Matarbari Port Development Project documentation; BSS News April 2025 (construction deal); Dhaka Tribune; DredgeWire

Chapter 4: Ship-Breaking and Marine Industry

150 Yards, 3.5M MT Recycled, Environmental Standards

Chittagong's 150 ship-breaking yards at Sitakunda recycle 3,500,000 MT of steel annually, approximately 50% of global ship recycling volume. The industry employs 25,000 direct workers and generates $2,500M in annual revenue, supplying 50-60% of domestic steel raw material through re-rolling mills. The Hong Kong Convention, which entered into force in June 2025, now governs the sector's regulatory obligations.

Source: NGO Shipbreaking Platform (NGSR/IMO 2023); SBRA (Ship Breaking and Recycling Association of Bangladesh) 2023; IMO Hong Kong Convention

Economic Contribution

The ship-breaking industry at Sitakunda (Chittagong) is a critical link in Bangladesh's industrial supply chain. Recycled steel from ship-breaking feeds the construction sector through re-rolling mills, making it one of the largest sources of ferrous scrap in the country. The 150 active yards process vessels ranging from small coastal cargo ships to Very Large Crude Carriers (VLCCs), with average annual revenue of approximately $2,500M (BSBA estimate, 2023). The broader supply chain, including transport, trading, and downstream steel processing, employs a multiple of the direct workforce.

Environmental and Safety Challenges

The sector carries serious environmental and occupational safety liabilities. Hazardous materials including asbestos, heavy metals (lead, mercury), PCBs, and TBT-based anti-fouling paints pose acute risks to workers and the intertidal ecosystem. Worker injury and fatality rates remain elevated despite successive regulatory interventions. Coastal sediment contamination from decades of uncontrolled beaching operations has measurably reduced marine biodiversity in the Sitakunda area.

Regulatory Framework

The Bangladesh Ship Recycling Act 2018 and the country's ratification of the Hong Kong Convention (2023) establish the legal framework. The Hong Kong Convention for Safe and Environmentally Sound Recycling of Ships entered into force in June 2025, requiring Ship Recycling Plans, Inventory of Hazardous Materials, and facility certification from all flag-state signatories. Bangladesh's compliance trajectory will determine whether its yards retain access to EU-flagged vessels under the EU Ship Recycling Regulation.

Green Ship Recycling Transition

Several Sitakunda yards have begun transitioning from beach beaching to dock/slipway methods, investing in impermeable floors, drainage systems, and worker protective equipment. Upgrading a yard to Hong Kong Convention standards costs an estimated $5-15M per facility. International financing from IFC and ADB, combined with buyer-side incentives from the EU Ship Recycling List, are the critical enablers for a sector-wide transition.

Source: Bangladesh Ship Recycling Act 2018; IMO Hong Kong Convention (entered into force June 2025); EU Ship Recycling Regulation (EU) 1257/2013; IFC Green Ship Recycling programme

Chapter 5: Blue Growth Strategy

Offshore Energy, Blue Carbon, Marine Biotech, and Policy Priorities

Bangladesh's blue economy contributes approximately 3.0% of GDP and supports 5,000,000 coastal livelihoods. The Blue Economy Index stands at 37.7/100, indicating material untapped potential across offshore energy, marine biotech, and blue carbon. Under the BNP-led government, port modernisation is a stated priority, but a comprehensive National Blue Economy Policy has not yet been tabled.

Offshore Energy Potential

Offshore wind potential in the Bay of Bengal is estimated at over 20 GW (IRENA/SREDA), concentrated in the shallow-water zone off Kutubdia, Maheshkhali, and Sandwip. No offshore wind projects have commenced as of mid-2026. A 100 MW pilot in the Kutubdia-Maheshkhali corridor through public-private partnership would establish grid interconnection precedent and attract international renewable energy capital. Offshore gas exploration remains stalled: only 8 of 26 blocks explored, with unfavourable PSC terms deterring international oil company (IOC) interest. Estimated reserves of 5.0 Tcf (Petrobangla) could extend declining onshore supply by 15-20 years if PSC reform and IOC re-engagement are prioritised.

Source: SREDA/IRENA offshore wind assessment; Petrobangla/BAPEX offshore block registry

Blue Carbon

The Sundarbans mangrove forest (6,017 sq km on the Bangladesh side) is a globally significant blue carbon asset. Mangroves sequester 3-5 times more carbon per hectare than terrestrial tropical forests. Bangladesh could monetise this through verified blue carbon credits under VCS/Verra, potentially generating $50-100M annually. Additional blue carbon sinks include seagrass beds and tidal wetlands, though systematic inventory data remains limited. The Sundarbans also serves as a critical storm surge buffer for 3-4 million coastal inhabitants in Khulna, Bagerhat, and Satkhira.

Source: IUCN Blue Carbon Initiative; UNFCCC Article 6 carbon market framework; MoEFCC Bangladesh mangrove inventory

Marine Biotechnology and Coastal Tourism

Seaweed production stands at 200 MT from pilot farms in Cox's Bazar (Nuniarchhara, Bakkhali). The sector has demonstrated potential for food ingredients, animal feed, agricultural bio-stimulants, and biofuel feedstock. Marine pharmaceutical research from Bay of Bengal organisms remains negligible despite the region's biodiversity. Coastal tourism at Cox's Bazar, St. Martin's Island, and Kuakata generates approximately $120.0M, constrained by infrastructure deficits and environmental pressure on coral and beach ecosystems.

Source: DoF Bangladesh; BFRI seaweed pilot programme reports; Bangladesh Tourism Board

Policy Priorities

Enact a Maritime Spatial Planning Act: Establish a legal framework for EEZ zoning, resolving conflicts between fisheries, shipping, energy, and conservation. Create a National Maritime Authority with cross-sectoral regulatory authority.
Modernise the Deep Sea Fishing Fleet: Subsidised financing for 50-100 deep sea vessels capable of operating beyond the 200m isobath. Technology transfer partnerships with South Korea, Japan, and Thailand. Reduce IUU losses of $200-400M annually through improved VMS coverage.
Launch an Offshore Wind Pilot: Commission 100 MW in the Kutubdia-Maheshkhali corridor via PPP. Demonstrate the viability of the estimated 20+ GW offshore potential.
Monetise Blue Carbon: Register Sundarbans mangrove carbon stocks under VCS/Verra. Allocate revenue to mangrove restoration and coastal community livelihoods.
Accelerate Green Ship Recycling: Finance yard upgrades to Hong Kong Convention standards through IFC/ADB instruments. Maintain access to the EU Ship Recycling List.
Expand Marine Protected Areas: Increase MPA coverage from 4.0% toward the CBD 30% target by 2030. Prioritise Swatch of No Ground, St. Martin's coral reef, and Sundarbans buffer zones.
Reform PSC Terms for Offshore Exploration: Revise production sharing contracts to attract IOC investment in unexplored blocks. Only 8 of 26 offshore gas blocks have been meaningfully explored.

The blue economy's trajectory depends on institutional follow-through. Bangladesh's maritime endowment is historically undervalued. The combination of Matarbari completion by 2029, a reformed fisheries management regime, and a functioning blue carbon market could lift maritime GDP contribution from the current 3.0% toward 5-6% within a decade, consistent with the projections of Bangladesh Delta Plan 2100 and the World Bank Blue Economy assessment.

Source: Bangladesh Delta Plan 2100; World Bank Blue Economy assessment for Bangladesh; BIMSTEC Maritime Transport Agreement

Primary Sources

ITLOS Case No. 16 (Bangladesh v. Myanmar, 2012) · Annex VII Tribunal (Bangladesh v. India, 2014) · DoF Yearbook of Fisheries Statistics 2022-23 · BFRI (Bangladesh Fisheries Research Institute) · Bangladesh Export Promotion Bureau FY2023-24 · Chittagong Port Authority (CPA) 2025 annual data · Mongla Port Authority · Payra Port Authority · JICA Matarbari Port Development Project · Petrobangla / BAPEX offshore block registry · SREDA / IRENA offshore wind assessment · IUCN / MoEFCC mangrove assessments · BBS National Accounts · NGO Shipbreaking Platform / IMO (NGSR 2023) · SBRA / BSBA (Bangladesh Ship Breaking and Recycling Association) 2023 · IMO Hong Kong Convention (entered into force June 2025) · EU Ship Recycling Regulation (EU) 1257/2013 · CBD Kunming-Montreal Global Biodiversity Framework (2022) · Bangladesh Delta Plan 2100 · World Bank Blue Economy assessment for Bangladesh · FAO State of World Fisheries and Aquaculture 2024 · ICSF (International Collective in Support of Fishworkers)

Generated on 2026-05-20. Analysis by BDPolicy Lab.