- India ends 2020 trans-shipment facility for Bangladeshi exports via land borders.
- Bangladesh’s trade with Nepal, Bhutan, and Myanmar likely to be affected.
- Move comes amid U.S. tariffs and rising regional trade tensions.
India’s decision to revoke the trans-shipment facility, which allowed Bangladeshi export cargo to move through Indian land borders to third countries, has major trade implications.
While Bangladesh’s primary export, ready-made garments, largely ship directly by sea, the facility still served as a strategic advantage for intra-regional trade.
Regional Trade Reset: India’s Move Redraws Bangladesh’s Export Map
India’s customs department issued a circular on April 8, officially ending the four-year-old facility that allowed Bangladeshi goods to transit through Indian land borders to reach ports and airports. This facility helped Bangladesh cut transit time and costs for third-country exports. However, Indian exporters, especially in the apparel sector, lobbied for its withdrawal, citing airport congestion and inflated freight rates.
For India, the decision reflects an attempt to prioritize its own exporters who compete directly with Bangladesh in global markets. Exporters of Indian garments, footwear, and jewelry are expected to benefit from faster cargo movement, reduced air freight charges, and improved logistics through less congested facilities like the Delhi air cargo terminal.
Bangladesh, already under economic strain from high U.S. tariffs on its key exports, now faces an additional logistical setback. Traders fear that export routes to Bhutan and Nepal will be disrupted, affecting Bangladesh’s reputation as a regional supplier. The loss of a land-based corridor will likely result in higher transportation costs and longer transit times for certain goods.
Experts suggest the move may not be purely economic. Growing concerns over Bangladesh’s engagement with China, especially around India’s sensitive “Chicken’s Neck” region, may have played a role. Additionally, deteriorating bilateral ties following domestic unrest in Bangladesh could have catalyzed a more assertive stance from New Delhi.
This policy shift by India signals a recalibration of regional trade priorities, with potential long-term effects on connectivity and cooperation. It underscores how economic policies are increasingly shaped by geopolitical calculations.
“Trade is a tool of diplomacy, and decisions like these reflect more than just logistics—they reflect intent.” — Ajay Srivastava, GTRI
