India has imposed restrictions on imports from Bangladesh through certain ports, impacting key goods such as readymade garments and processed foods. This move, which took effect immediately on Saturday evening, follows increasing trade friction and diplomatic strains between the two countries.
The Directorate General of Foreign Trade (DGFT) issued a notification outlining that imports of readymade garments from Bangladesh will now be restricted to the Nhava Sheva and Kolkata seaports, effectively barring entry through land ports. In addition to garments, the restrictions apply to a range of other goods, including processed foods, fruits and fruit-flavored drinks, carbonated beverages, plastic products, dyes, cotton waste, and wooden furniture. These items are now prohibited from entering India through Land Customs Stations (LCSs) or Integrated Check Posts (ICPs) in Assam, Meghalaya, Tripura, Mizoram, and certain parts of West Bengal. Exemptions have been made for fish, LPG, edible oils, and crushed stone, which can continue to be imported through land ports.
This decision marks a significant shift in India's trade policy with Bangladesh. Trade tensions between the two countries have been escalating since April, sparked by a series of diplomatic and economic disagreements. One of the triggers was controversial remarks made by Muhammad Yunus, the head of Bangladesh's interim government, during a visit to China. Yunus described India's northeastern states as landlocked and dependent on Bangladesh for sea access, further claiming Bangladesh as the "only guardian" of the Indian Ocean in the region.
The restrictions come shortly after India withdrew a transshipment facility previously granted to Bangladesh in 2020, which allowed Bangladesh to export goods to other countries through Indian ports and airports. India cited "congestion" at its ports and airports as the reason for this withdrawal. However, the timing of the decision, coinciding with growing diplomatic tensions, suggests a different motive.
These recent actions are already impacting trade between the two nations. Ready-made garment manufacturers and exporters in Bangladesh are concerned that the closure of land routes for imports and exports will raise their costs. The now-halted transshipment facility allowed Bangladeshi exporters to send garments to Indian cities by road, from where they would be flown to Europe and the US. Disruptions to this route have increased production costs and lengthened delivery times.
In the financial year 2023-2024, trade between India and Bangladesh was valued at $13 billion, with India holding a trade surplus of $9.2 billion. India's key exports to Bangladesh include textiles, cotton yarn, refined petroleum, and machinery. Bangladesh primarily exports jute products, ready-made garments, and some agricultural commodities to India.
The current trade restrictions and diplomatic strains are occurring against a backdrop of shifting geopolitical dynamics. Relations between the two countries have reportedly soured since the former Prime Minister of Bangladesh, Sheikh Hasina, was ousted in August. Furthermore, Bangladesh has started to resume diplomatic talks with Pakistan, which is complicating regional dynamics.
