Days after Bangladesh Chief Advisor Muhammad Yunus’s controversial remarks on India’s northeast states, New Delhi on Wednesday terminated the transshipment facility for Dhaka’s export cargoes to other countries via its land borders.
The move is expected to disrupt Bangladesh's readymade garment exports to countries including Nepal, Bhutan and Myanmar.
"It has been decided to rescind... circular...dated June 29, 2020, as amended with immediate effect. Cargo already entered into India may be allowed to exit the Indian territory as per the procedure given in that circular," the Central Board of Indirect Taxes and Customs said in a statement.
The government, however, cited "delays and higher costs" hindering India's own exports and creating backlogs as the reasons for the fresh move.
“The transshipment facility extended to Bangladesh had over a period of time resulted in significant congestion at our airports and ports. Logistical delays and higher costs were hindering our own exports and creating backlogs. The facility, therefore, has been withdrawn w.e.f. April 8, 2025,” Ministry of External Affairs Spokesperson Randhir Jaiswal said in a media interaction.
#WATCH | Delhi | On the withdrawal of the Transshipment facility for Bangladesh, MEA Spokesperson Randhir Jaiswal says, "...The Transshipment facility extended to Bangladesh had over a period of time resulted in significant congestion at our airports and ports. Logistical delays… pic.twitter.com/ZoLBJrskZ8
— ANI (@ANI) April 9, 2025
Yunus, while, addressing an event in China had remarked that the seven Indian states in the northeast are landlocked and Bangladesh is the only guardian of the ocean. He also invited China to ‘extend’ its economy, sending goods across the world through his country.
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The statement had invited sharp reactions from Indian political leaders cutting across party lines.
India’s move comes as a fresh blow to Bangladesh which is already reeling from steep US tariffs on its goods. Donald Trump has imposed 37 per cent reciprocal tariffs on Bangladeshi exports and is likely to increase logistical burdens.
New Delhi’s decision is also likely to help many of the Indian exporting sectors like apparel, footwear, and gems and jewellery.
"Now we will have more air capacity for our cargo. In the past, exporters have complained about lesser space due to the transhipment facility given to Bangladesh," Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai told news agency PTI.
The relations between New Delhi and Dhaka cooled after Bangladesh prime minister Sheikh Hasina fled the country amid massive student protests and sought shelter in India.
