In a significant shift in trade relations, India on Thursday announced the end of an arrangement allowing the trans-shipment of Bangladeshi export cargo to third countries through Indian ports and airports. This decision comes as a response to a series of trade measures by Bangladesh, including the suspension of yarn imports from India and the closure of three land ports along the India-Bangladesh border.
External Affairs Ministry spokesperson Randhir Jaiswal, during a weekly briefing, emphasized that India values its relationship with Bangladesh and aspires to maintain a “positive and constructive” engagement. However, Jaiswal noted that the decision to end the trans-shipment facility was made in light of the growing congestion at Indian ports and airports. He also pointed out that the move should be understood in the context of actions taken by Bangladesh prior to India’s announcement.
“While we stand for a democratic, inclusive, and prosperous Bangladesh, we must also recognize the developments on the Bangladeshi side,” Jaiswal said. He referred to the halting of yarn imports from India by Bangladesh, a decision taken in March, which has been criticized by the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) as “suicidal.”
Sources familiar with the matter revealed that Bangladesh’s interim government halted yarn imports from India to facilitate the import of cheaper yarn from Pakistan. This move, along with the closure of key land ports—Chilahati, Daulatganj, and Tegamukh—has further strained bilateral trade relations. In March, a committee established by Bangladesh’s interim government also recommended the suspension of operations at the Balla land port, further aggravating trade ties.
India and Bangladesh had previously been working to improve logistics through the upgrade of existing land ports and the establishment of new facilities. The closure of land ports, especially during such efforts, is seen as a step backward in enhancing trade between the two countries.
Additionally, the Bangladesh Customs’ establishment of an Investigation, Research, and Management Unit in January to inspect cargo at the Benapole Integrated Check Post has raised concerns. This move, which includes increased physical examination of goods, is expected to delay the processing of imports from India and could further hinder trade.
Tensions between the two countries have escalated since the assumption of power by an interim government in Bangladesh, led by Nobel laureate Muhammad Yunus, in August of the previous year. The ousting of Prime Minister Sheikh Hasina’s government after widespread student protests and allegations of human rights abuses against minorities in Bangladesh have been sources of contention. India has consistently criticized the handling of minority repression in Bangladesh, particularly the rise of radical groups. In response, Bangladesh has downplayed reports of attacks on minorities and called for the extradition of Hasina, who is currently in self-exile in India.
While India’s decision to end the trans-shipment facility is seen as a response to Bangladesh’s actions, both nations continue to engage diplomatically. Prime Minister Narendra Modi, in a previous meeting with Yunus, expressed India’s desire for a “positive and constructive” relationship with Bangladesh, underscoring the importance of regional cooperation. However, the recent developments suggest that tensions in trade and political spheres may continue to impact bilateral relations in the near future.
Sources By Agencies