The Arakan Army’s rise as Rakhine’s de facto authority is driving India and Bangladesh toward pragmatic engagement beyond conventional state-centric diplomacy
The Arakan Army’s quest for autonomy and self-governance, as underlined by ‘The Arakan Dream’ or ‘the Rakhita’, has entered a new stage, where the group has sought to position itself not just as an anti-junta insurgent group, but as a key stakeholder in Myanmar’s borderlands by securing political legitimacy through the establishment of administrative institutions and infrastructure. This raises the question of how the Arakan Army’s stronghold over the geopolitically contentious Rakhine State has created opportunities for external engagement with neighbouring India and Bangladesh, and how these actors have attempted to participate in and influence cross-border and regional security, economic, and cooperative architectures.
The Arakan Army, formed in 2009, drew international attention last year when it seized control of Maungdaw and Taungup townships, effectively bringing western Myanmar’s 270-kilometre-long border with Bangladesh under its control. It further consolidated its military dominance through the capture of Ann Township’s Western Regional Command headquarters, subsequently establishing itself as the de facto governing authority across much of Rakhine State.
The Arakan Army, formed in 2009, drew international attention last year when it seized control of Maungdaw and Taungup townships, effectively bringing western Myanmar’s 270-kilometre-long border with Bangladesh under its control.
The Arakan Army, originating in Rakhine, is one of Myanmar’s seven Ethnic Armed Organisations (EAOs) and was trained by the Kachin Independence Army (KIA); over time, it has emerged as a central actor in Myanmar’s civil conflict. It was part of the Three Brotherhood Alliance during the 2023 offensive—alongside the Ta’ang National Liberation Army (TNLA), based in Northern Shan State, and the Myanmar National Democratic Alliance Army (MNDAA), based in Eastern Shan State—against the Tatmadaw. It presently controls over 14 of the 17 townships in Rakhine State and has sought to firmly establish popular support for its anti-junta efforts by training at least 15 other insurgent groups in bordering regions, notably Chin State and the Magwe, Bago, and Ayeyarwaddy regions. Once categorised as a terrorist organisation by Aung San Suu Kyi’s government, the group’s current military dominance has enabled a renewed push to secure confederate status within the country and expand international exchange.
Meanwhile, economic penetration across the region by neighbouring actors, notably China through the China-Myanmar Economic Corridor (CMEC), has already expanded external influence over the insurgent groups. In 2025, the Kokang-based, Mandarin-speaking MNDAA had to surrender its previously hard-won city of Lashio to the Myanmar armed forces due to pressure from Beijing.
China has adopted a dual-track approach in Myanmar, engaging both the military junta and competing ethnic armed organisations (EAOs) to prevent any single actor from dominating cross-border trade routes. This strategy safeguards Beijing’s commercial interests while exploiting internal fractures within insurgent movements, where ideological inconsistencies make groups vulnerable to external influence.
However, the Arakan Army’s rapid consolidation of a proto-state in Rakhine has generated unease in Beijing. Key strategic assets such as the Kyaukphyu Port—vital for China’s access to the Indian Ocean—and Ann Township, which hosts the China–Myanmar oil and gas pipelines, are central to Chinese economic ambitions.
China has adopted a dual-track approach in Myanmar, engaging both the military junta and competing ethnic armed organisations (EAOs) to prevent any single actor from dominating cross-border trade routes.
China’s alleged material support to the Arakan Army remains contested. Reports suggest financial flows and access to Chinese-made weapons, including 107mm rockets used in the 2019 Sittwe attack. The group has denied these claims, asserting that no such support exists. Despite its involvement in Operation 1027 targeting scam networks, China has struggled to secure a ceasefire in Rakhine. Still, Beijing is expected to leverage its economic clout to bring the Arakan Army to negotiations, particularly regarding the Kyaukphyu–Kunming railway, a flagship project under the Belt and Road Initiative (BRI).
Simultaneously, the Arakan Army is building governance structures—including judicial and public health systems—to legitimise its authority and seek broader international engagement. Given Rakhine’s strategic location linking Myanmar to the Bay of Bengal, and its proximity to Bangladesh and India’s Northeast, the group aims to expand regional outreach through pragmatic cooperation on border management, trade, and infrastructure.
After more than five years of the military coup, Myanmar’s fragmented political landscape remains a concern for its neighbours, as it poses a threat of prolonged instability through the unregulated migration of persecuted individuals and risks to economic investments in the region. The recent 2026 elections in Myanmar, in which the military-aligned Union Solidarity and Development Party (USDP) won a majority in a tightly-controlled electoral space, hardly promise any changes on the ground, as EAOs continue to fight for territory and influence. Rakhine State, in particular, remains a point of contention, with the Arakan Army continuing to dominate the majority of the townships, while the junta-backed government plans to impose emergency ordinances and military control, marking the first major move by Min Aung Hlaing to solidify control over war-ravaged territories.
China has adopted a dual-track approach in Myanmar, engaging both the military junta and competing ethnic armed organisations (EAOs) to prevent any single actor from dominating cross-border trade routes.
Amid these new political developments, it is unlikely that the Arakan Army will abandon its quest for international recognition, as it is integral to its aim of establishing itself as a legitimate autonomous entity. In 2024, the group announced that it would recognise any foreign investment contributing to the economic and infrastructural development of the Arakan region and would ensure the protection of such investment activities. The long-term aim was to “establish joint ventures to ensure the continued operation of foreign investment projects in Arakan State.” This deliberate positioning of itself as a responsible regional stakeholder also draws on its vision of inclusive governance, promising “freedom, democracy, social justice and welfare, and human dignity for all inhabitants in Arakan.” The junta-led 2026 elections have not been interpreted as a credible source of long-term stability in either Dhaka or New Delhi, thereby allowing the Arakan Army to continue seeking informal yet constructive dialogue with its neighbours and to leverage pragmatism in addressing security considerations.
In Bangladesh, newly appointed Foreign Minister Khalilur Rahman received a congratulatory message from Tun Myat Naing (Twan Mrat Naing) of the Arakan Army, expressing hopes for “practical and sustainable solutions” and a “strategic partnership.” Dhaka, however, clarified that this does not signal political endorsement. The continued “authoritarian upgrading” in Myanmar risks indefinitely stalling Rohingya repatriation—whether under the junta or the Arakan Army. Rahman has emphasised the inclusion of the Rohingya in Rakhine’s emerging governance and security structures, placing responsibility on the Arakan Army. Participation in voluntary repatriation talks thus remains key to securing the group’s legitimacy.
At the same time, practical cooperation is emerging. The release of over 73 Bangladeshi fishermen detained in Rakhine State signals evolving border management dynamics. Resolving fishing disputes along the Naf River could revive the Kanyinchaung Economic Zone and Maungdaw trade points, restoring access to essential goods in a region constrained by military blockades.
India’s critical investments in Myanmar, i.e., the Kaladan Multi-Modal Transit Transport Project and the India–Myanmar–Thailand Trilateral Highway (both integral to its Look East Policy), remain suspended in operational uncertainty even after the elections. Myanmar remains a fragmented conflict zone, and while India is unlikely to isolate the regime despite its call for free and fair elections, it cannot risk halting its diplomatic outreach and coordination with the different EAOs on the ground. The Kaladan Multi-Modal Transit Transport (KMMTT) project, which aims to create a sea-to-land access route to India’s Northeastern region by connecting the Kolkata seaport with the deep-sea port in Sittwe, Rakhine State, can, therefore, be instrumental in ushering in a new phase of India–Arakan Army engagement.
The Arakan Army maintains that its control over key project areas makes it a much more viable partner than the junta, promising the necessary security and protection to construction workers in 2024, provided that Indian interests in the region do not override local concerns about fair land compensation and environmental protections. The Arakan perspective seeks Indian acknowledgement of its historical ties to the ancient Mrauk-U Kingdom as the normative basis of this engagement, linking these ties to India’s Look East Policy. It recognises the political sensitivity of India’s Northeastern region, particularly states such as Manipur and Tripura. The Arakan Army has called for greater collaboration to curb cross-border insurgent groups such as the Arakan Rohingya Salvation Army (ARSA) and the Rohingya Solidarity Organisation (RSO), which it deems a mutual threat to both the Arakan Army and India through drug trafficking and forced recruitment.
The road ahead for Myanmar is unlikely to be defined by a return to centralised state authority, regardless of the outcome of the 2026 presidential elections. Peripheral regions such as Rakhine State will continue to function under contested authority, particularly that of the Arakan Army, which is steadily pursuing institutional consolidation through governance structures and calibrated external engagement.
Practical concerns—such as managing connectivity projects and regulating cross-border population flows—will increasingly depend on who exercises effective territorial control rather than formal political authority.
In this context, both Bangladesh and India may need to move beyond rigid distinctions between state and non-state actors. Practical concerns—such as managing connectivity projects and regulating cross-border population flows—will increasingly depend on who exercises effective territorial control rather than formal political authority.
Strategic pragmatism must therefore account for Myanmar’s ethnic complexities alongside intensifying geopolitical rivalries. Diplomatic flexibility—enabling engagement with both state authorities and ethnic armed organisations—will be essential to safeguarding critical infrastructure and regional stability. A calibrated but deliberate adaptation to Myanmar’s fragmented political landscape is required, fostering informal arrangements that sustain economic and security cooperation while maintaining principled support for Myanmar’s sovereignty.
Anasua Basu Ray Chaudhury is a Senior Fellow with the Neighbourhood Initiative at the Observer Research Foundation.
Shreya Das is an Intern at Observer Research Foundation.
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Anasua Basu Ray Chaudhury is Senior Fellow with ORF’s Neighbourhood Initiative. She is the Editor, ORF Bangla. She specialises in regional and sub-regional cooperation in ...
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