India has recently imposed a ban on the import of certain jute and textile products from Bangladesh via land routes, allowing entry only through the Nhava Sheva seaport in Mumbai. This decision, announced on Friday, June 27, 2025, has the potential to significantly impact trade relations between the two countries.

The ban specifically targets jute and textile items, key exports from Bangladesh to India. While the specific reasons for the ban have not been explicitly stated, it appears to be a culmination of escalating trade tensions and economic considerations. Reports suggest that this move is intended to protect India's domestic textile industry and attract labor-intensive manufacturing jobs to the country. Indian manufacturers have long claimed that Bangladesh enjoys unfair price advantages.

This recent restriction follows a series of events that have strained the trade relationship between India and Bangladesh. Earlier, Bangladesh had restricted Indian yarn imports via land routes. Subsequently, India withdrew a transshipment facility that had allowed Bangladesh to export goods to third countries through Indian ports, excluding Nepal and Bhutan. This withdrawal reportedly cost Bangladeshi shippers an estimated Tk 20 billion.

The implications of this ban are far-reaching. Land ports like Benapole-Petrapole (West Bengal) and Agartala-Akhaura (Tripura), which handle a significant volume of trade between the two nations, are expected to experience a sharp decline in activity. At least 36 trucks carrying ready-made garments from Bangladesh were reportedly stranded at the Benapole customs point, underscoring the immediate impact of the restrictions.

The decision has raised concerns about a potential increase in logistical challenges and pressure on the Nhava Sheva seaport. It is also perceived by some as a retaliatory measure following Bangladesh's earlier restrictions on Indian yarn imports.

Despite these trade tensions, India remains Bangladesh's second-largest trading partner after China, with a total bilateral trade volume of approximately $14.01 billion during the fiscal year 2023-24. However, trade has been overwhelmingly in favor of India. In 2023, India's exports to Bangladesh were valued at around $11.3 billion, while Bangladesh's exports to India stood at $1.89 billion. India had a trade surplus of $9.2 billion with Bangladesh in fiscal year 2023-24.

Bangladesh primarily exports ready-made garments (RMG), leather footwear, textile scraps, and jute and jute products to India. In contrast, India's exports to Bangladesh include textiles and apparel (especially cotton yarn), pharmaceuticals, engineering goods, organic chemicals, automobile parts, and rice.

It remains to be seen how this ban will affect the overall trade dynamics between India and Bangladesh in the long term. While the Indian government has not yet issued a detailed statement on the rationale behind the ban, it is likely aimed at addressing the trade imbalance and protecting domestic industries. Some analysts suggest that the move could also be a bargaining chip to encourage Bangladesh to ease restrictions on Indian exports.