- India revokes 2020 facility allowing Bangladeshi cargo access to third countries via Indian land ports
- Apparel, footwear, and gems sectors in India expected to benefit
- Move could strain Bangladesh logistics and impact regional trade with Bhutan and Nepal
- Geopolitical tensions and trade rivalries come into sharper focus
New Delhi, April 10, 2025
In a move with far-reaching implications for regional trade, India has terminated the trans-shipment facility that allowed Bangladesh to export goods to third countries using Indian land customs stations en route to major Indian seaports and airports. The facility, introduced in June 2020, had enabled faster and cheaper exports for Bangladeshi businesses to destinations like Nepal, Bhutan, and Myanmar.
The Central Board of Indirect Taxes and Customs (CBIC) issued a circular on April 8, confirming the cancellation of the trans-shipment order with immediate effect.
“It has been decided to rescind… circular… dated June 29, 2020… Cargo already entered into India may be allowed to exit the Indian territory as per the procedure,” the CBIC stated.
Indian Exporters Cheer Decision
The termination of the facility is a win for Indian exporters, particularly in apparel, footwear, and gems & jewellery, who have long complained that Bangladeshi cargo was congesting Indian air terminals, particularly the Delhi air cargo complex.
“Now we will have more air capacity for our cargo,” said Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO).
“Earlier, exporters complained about reduced space due to Bangladeshi cargo.”
The Apparel Export Promotion Council (AEPC) had actively lobbied for the rollback, citing logistical disruptions and rising freight costs due to daily arrivals of 20–30 fully loaded Bangladeshi trucks at Delhi’s terminal.
“This will help in rationalization of freight rates, reduce costs for Indian exporters, and decongest airports,” said AEPC Secretary General Mithileshwar Thakur.
AEPC Chairman Sudhir Sekhri added that the earlier arrangement had made Indian exports less competitive due to delays, inflated freight rates, and operational bottlenecks.
Regional Ripple Effect Likely
While Indian exporters benefit, trade experts warn that the decision could destabilize trade logistics in Bangladesh and neighbouring landlocked nations that relied on this corridor.
“The earlier system helped Bangladesh cut transit time and cost. Its removal means logistical delays, increased uncertainty, and higher costs,” said Ajay Srivastava, founder of Global Trade Research Initiative (GTRI).
He further pointed out that Nepal and Bhutan, both reliant on India’s transport infrastructure for access to Bangladesh, may express concerns over restricted transit.
The development may also put a question mark on regional cooperation in South Asia, especially with the fragile balance of trade and infrastructure dependency among the BBIN (Bangladesh, Bhutan, India, Nepal) countries.
Bangladesh, China, and Geopolitics
Some analysts have speculated that the geopolitical climate played a role in this policy reversal. Bangladesh’s growing proximity to China, including potential strategic infrastructure near the Chicken’s Neck region, may have alarmed New Delhi.
“Bangladesh’s strategic ambitions and ties with China may have prompted this action,” Srivastava said.
Additionally, India’s patience with the Bangladeshi interim government led by Muhammad Yunus may have worn thin due to its failure to curb communal violence and attacks on Hindu minorities — a factor which has reportedly soured bilateral ties.
India, which offers zero-tariff access to almost all Bangladeshi exports, has been a longstanding supporter of Dhaka’s economic interests. However, the deterioration in relations, coupled with rising trade competition, appears to have shifted the calculus.
India-Bangladesh Trade Snapshot
- Bilateral trade in 2023-24 stood at $12.9 billion
- India is a key export market for Bangladeshi garments and textiles
- Bangladesh is also India’s top competitor in global textile and apparel exports
With this rollback, Indian policymakers hope to bolster domestic manufacturing, improve logistics efficiency, and reclaim lost ground in labour-intensive exports.
As India pursues a sharper edge in global trade and geopolitics, this move signals a more assertive policy stance — one where economic interests and strategic calculations go hand in hand.
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