Notice the routes near and around Bangladesh. That country doesn't want to participate, if it means giving India transit.
Then read this Indian take on the Bangla politics.
Not giving transit to India was one of the major commitments to the voters during the campaign of the last election that brought the present ruling alliance in Bangladesh to power and joining the highway and giving transit to India may have a negative effect in the upcoming general elections. For this reason, Bangladesh government took a decision which was completely against its own economic interests.
A Bangla point of view - a former ambassador to the UN, no less:
It is argued that Bangladesh government may seriously reconsider its position in respect of signing the Asian Highway network for long-term interest. The public have the right to know from the government how refusal to sign the Asian Highway agreement serves the national interest. Let there be a public debate on this important issue, if it does not take place in the Parliament.
Pakistan, Bangladesh, Myanmar, China, Nepal, Afghanistan - India is blessed with good neighbors!
PS: Some Bangla sources:
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