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The Indian government has withdrawn a key trans-shipment facility that previously allowed Bangladesh to route its export cargo to third countries via Indian land customs stations (LCSs). The move, announced through a circular dated 8 April by the Central Board of Indirect Taxes and Customs (CBIC), is expected to have wide-ranging implications for regional trade dynamics. The facility, introduced in June 2020, had enabled Bangladesh to access Indian ports and airports for exporting cargo to countries such as Bhutan, Nepal and Myanmar.
However, the CBIC has now “rescinded” the earlier circular “with immediate effect”, though it clarified that cargo already in transit will be allowed to exit Indian territory as per the old procedures. The decision, reported by the New Indian Express , comes at a time of heightened trade tensions globally, with the United States imposing fresh tariffs on several countries, including India and Bangladesh. Indian exporters, particularly in the apparel sector, had long voiced concerns over the facility, arguing it put them at a competitive disadvantage.
“We will now have more air capacity for our cargo,” said Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO). “In the past, exporters have complained about lesser space due to the transshipment facility given to Bangladesh.” The Apparel Export Promotion Council (AEPC) had previously lobbied the government to withdraw the facility.
AEPC chairman Sudhir Sekhri pointed out that 20–30 truckloads of Bangladeshi cargo arrived daily at Delhi's air cargo complex, resulting in congestion, delays and inflated freight rates for Indians. This, he argued, severely impacted the competitiveness of Indian apparel exports. Interestingly, the move also follows controversial remarks made by Muhammad Yunus, chief adviser to Bangladesh’s interim government, during a visit to China from 26 to 29 March.
Also Read: Bangladesh moves closer to China while India waits and watches Yunus urged Beijing to extend its economic influence into Bangladesh, calling India’s north-eastern states a “landlocked region with no access to the ocean” and describing Bangladesh as therefore the “only guardian of the ocean in the region”. It might be also noted that on Friday, 4 April, India’s prime minister Narendra Modi had raised the issue of “safety and security of minorities in Bangladesh” — “including Hindus” — during his meeting with Yunus, held on the sidelines of the BIMSTEC Summit in Bangkok. Also Read: In Bangladesh, PM Modi urges Yunus to ‘avoid rhetoric, protect minorities’ Trade experts believe the termination of the transshipment route could strain Bangladesh’s logistics.
Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), noted that the earlier mechanism had offered a streamlined and cost-effective route through India. Without it, Bangladeshi exporters may face higher costs, logistical delays and greater uncertainty. “This move could also affect landlocked nations like Nepal and Bhutan,” Srivastava added.
“Their trade with Bangladesh may be disrupted, and concerns over restricted access may be raised.” He also pointed to the World Trade Organization (WTO) rules, which require member nations to provide freedom of transit to landlocked countries — ensuring no unnecessary delays or discriminatory duties. Both India and Bangladesh are signatories to these global trade norms — and while neither is a landlocked nation, Nepal and Bhutan are.
While the decision may benefit Indian exporters in the short term, it has introduced a fresh layer of complexity to regional trade, with potential geopolitical and diplomatic repercussions in the months to come. Also Read: Do as thy neighbour does Follow us on: Facebook , Twitter , Google News , Instagram Join our official telegram channel ( @nationalherald ) and stay updated with the latest headlines.
