New Delhi: India has withdrawn the transshipment facility available to Bangladesh from 2020 onwards, citing “congestion” at Indian ports and airports, the Ministry of External Affairs (MEA) said Wednesday.
“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 The facility, therefore, has been withdrawn with effect from 8 April, 2025,” MEA spokesperson Randhir Jaiswal said at a regular press briefing.
The previous day, Central Board of Indirect Taxes and Customs (CBIC) published a circular terminating the transshipment facility extended to Dhaka. The original circular in 2020 allowed Bangladesh to export cargo to third countries using Indian Land Customs Stations.
This enabled the smooth flow of Bangladeshi exports to third countries including Nepal, Bhutan and Myanmar.
Indian exporters, however, had issues with this facility as it increased the costs of Indian exports, especially air cargo from New Delhi, as reported by ThePrint. The impact of Houthi strikes in the Red Sea last year, along with usage of cargo facilities for Bangladeshi export had in some cases tripled the costs for Indian exporters.
“To clarify, these measures do not impact Bangladesh exports to Nepal or Bhutan transiting through Indian territory,” said Jaiswal.
The move comes days after Prime Minister Narendra Modi met with chief adviser to the Bangladesh interim government, Muhammad Yunus, on the margins of the BIMSTEC summit in the Thai capital of Bangkok last week.
For India, the transshipment facility created a challenging situation in terms of cargo capacity. In February 2024, cargo volumes surged to 781 tonnes, which was over twice the monthly average of roughly 300-400 tonnes.
On average, a total of 19,000 units were scanned in January 2024, which surged to 25,000 the following month according to a report published by the Delhi Cargo Services Centre last year.
This had impacted India’s exports, especially apparels, given that Bangladesh’s textile industry is the Indian textile industry’s fiercest rival in global markets. India has set a target of $100 billion worth of exports from its domestic textile sector by 2030.
As reported by ThePrint last year, the Apparel Export Promotion Council (AEPC), India’s official body of apparel exporters, had written to the Indian government to cancel this facility. The move also comes a week after Yunus attempted to leverage its access to the ocean for investment from China, calling Dhaka the “only guardian of the (Indian) ocean” since India’s Northeast is “landlocked”.
During his visit to Beijing between 26 March and 29 March he had made the argument that this ocean access would allow Bangladesh to become an extension of the Chinese economy.
The Northeast is strategically important for India, especially given that it is at the centre of New Delhi’s geographic outreach to Southeast Asia.
(Edited by Amrtansh Arora)
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