Agartala, April 10: India’s decision to revoke the transshipment facility for Bangladesh’s export cargo destined for third countries has sparked concerns in Dhaka, particularly within the country’s thriving apparel sector. The suspension of this facility, which allowed Bangladeshi exporters to use Indian ports and airports for global shipments, is expected to increase costs and logistical challenges for businesses.
On April 9, the Indian government terminated the transshipment facility, which enabled cargo export from Bangladesh to third countries via Indian land customs stations en route to ports and airports. India cited logistical challenges and congestion at its ports and airports as the reason for the decision.
The facility, initially provided by India to Bangladesh, facilitated smooth trade flows for Bangladeshi exports to countries like Bhutan, Nepal, and Myanmar.
Addressing the weekly press briefing, MEA spokesperson Randhir Jaiswal stated, “The transshipment facility extended to Bangladesh has, over time, resulted in significant congestion at our airports and ports. Logistical delays and higher costs were hindering our own exports and creating backlogs.”
“Therefore, the facility has been withdrawn with effect from April 8, 2025. To clarify, these measures do not impact Bangladesh’s exports to Nepal or Bhutan transiting through Indian territory,” Jaiswal added.
A 13-member delegation from Bangladesh visited India from July 9 to 12, 2024, to explore the possibilities of transshipping Bangladeshi Exim cargo through Indian ports located on the East Coast. The delegation was led by S.M. Mostafa Kamal, Joint Secretary, Ministry of Shipping, Bangladesh, and included representatives from other key Bangladeshi ministries and ports.
Earlier, the Ministry of Ports, Shipping, and Waterways stated in a release that Agenda No. 6 in the agreed minutes of the Standing Shipping and Logistics Team (SSLT) was moved by the Indian side to facilitate Bangladesh’s Exim cargo through Indian ports on the East Coast using the Coastal Shipping Agreement and the Protocol on Inland Water Transit and Trade (PIWTT) between India and Bangladesh.
Jaiswal also raised broader concerns regarding bilateral relations with Bangladesh, particularly the treatment of minorities and issues surrounding the Teesta Water Treaty. Speaking on the situation of minorities in Bangladesh, he emphasized the need for urgent and firm action.
“We have conveyed our concerns regarding the treatment of minorities and the violence that has taken place against them… These atrocities cannot be ignored. We hope that the Bangladesh government will take strong action against those responsible,” he said.
India’s decision to terminate the transshipment facility appears to be a response to controversial remarks made by Bangladesh’s Chief Advisor Muhammad Yunus regarding India’s northeastern states. Yunus stated that the seven northeastern states of India are landlocked and that Bangladesh is their only access point to the ocean. He also invited China to expand its economic reach by using Bangladesh as a gateway for global trade.
The announcement comes at a time when the U.S. has imposed sweeping tariffs on multiple countries, including India and Bangladesh.
“The decision will benefit several Indian export sectors such as apparel, footwear, and gems and jewelry. Bangladesh is a major competitor of India in the textile sector,” said an industry expert.
Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), commented, “Now, we will have more air capacity for our cargo. In the past, Indian exporters had complained about reduced space due to the transshipment facility given to Bangladesh.”
Meanwhile, Bangladesh is looking for alternatives. “We have discussed how to utilize our existing infrastructure, including Sylhet and Dhaka airports, to ensure our exports remain competitive,” Bangladesh’s Commerce Adviser, Sheikh Bashir Uddin, told the Daily Star newspaper. A follow-up meeting, chaired by the commerce secretary, is scheduled to explore solutions to mitigate disruptions.
The garment industry, which accounts for the bulk of Bangladesh’s exports, is particularly affected. Faruque Hassan, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), expressed disappointment over India’s decision.
A key factor driving Bangladeshi exporters to use India’s Indira Gandhi International Airport in New Delhi was cost efficiency. The tariff for air cargo at Dhaka’s Hazrat Shahjalal International Airport is significantly higher than at Delhi’s airport.
Exporters have noted that the cost of transporting one kilogram of garments to Europe from Dhaka is $3, whereas via Delhi, it is only $1.20. Currently, around 1,000-1,500 tonnes of Bangladeshi goods are shipped through Delhi’s airport each month.
Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), emphasized that the decision contradicts the spirit of regional trade cooperation, particularly in light of the recent BIMSTEC Summit.
India’s Apparel Export Promotion Council (AEPC) had requested the revocation, arguing that the influx of Bangladeshi cargo at Delhi’s airport increased logistical costs for Indian exporters.
Zahid Hussain, former lead economist at the World Bank’s Dhaka office, called the move “unfortunate and unnecessary,” adding that it could strain bilateral trade relations between the neighbors.
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