India terminated a key transit facility for Bangladesh after Muhammad Yunus called India’s Northeast “landlocked” and dependent on Dhaka for sea access.
Beginning in 2020, the canceled agreement permitted Bangladesh to ship exports to international ports and airports via India’s land networks.
The Central Board of Indirect Taxes and Customs in India formally terminated the agreement on April 8 through a notice. They did, however, emphasize that any Bangladeshi cargo that is currently in India can still depart by following the standard procedure.
Multiple factors influenced the decision to terminate cargo shipments
The transshipment of Bangladeshi commodities, especially through the Delhi Air Cargo complex, caused significant traffic jams. The Red Sea situation made this worse by forcing numerous exports to switch from sea to air routes, which put more strain on Indian airports.
The Apparel Export Promotion Council (AEPC) pointed out that the 20–30 laden trucks arriving daily from Bangladesh in Delhi caused delays and rising air freight costs. Because of the increased logistical difficulties and expenses, this condition made Indian garment exports less competitive.
Relations were further strained by remarks made by Mahfuz Alam, an advisor to Bangladesh’s interim administration. India vehemently objected to his claims that West Bengal, Assam, and Tripura are a part of Bangladesh and that Bangladesh and Northeast India share cultural traits. The Indian Ministry of External Affairs filed a formal objection and emphasized the need for making thoughtful public remarks.
Bangladesh garment exports disrupted by India ban
India has revoked a 2020 agreement that allowed Bangladesh to use its ports and land routes to export goods to other countries. This decision is expected to raise trade costs, especially with Nepal, Bhutan, and Myanmar, and harm Bangladesh’s ready-made garment exports.
The Indian government took action because the system caused backlogs, raised expenses, and delayed Indian exports. Some traders from Bangladesh are concerned that this may cause them to cease exporting to their neighbors.
Experts claim that even if Bangladesh exports most of its clothing via direct shipment, the decision nevertheless restricts the possibility for regional trade. The U.S. has imposed significant tariffs (37%) on Bangladeshi goods, further straining Dhaka’s exports and perhaps making matters worse.
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