MEA Links Move to Recent Bangladeshi Actions Impacting Bilateral Trade
New Delhi |
India has officially withdrawn the transhipment facility it had extended to Bangladesh for exporting goods to third countries, including the Middle East and Europe, through Indian ports and airports. The decision, announced last week, has now been linked to certain steps taken by Dhaka that reportedly disrupted bilateral trade flows.
What is the Transhipment Facility?
Under a 2020 arrangement, India allowed Bangladesh to use Indian ports and airports to facilitate exports to non-neighbouring countries. The move was aimed at boosting regional trade and connectivity, and was seen as a goodwill gesture to strengthen ties.
However, India’s Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal stated that the suspension was not only due to logistical concerns like port congestion, but also a response to actions taken by the Bangladeshi interim government.
“Please take note of the developments on the Bangladeshi side prior to our announcement,” Jaiswal said during his weekly briefing.
What Prompted the Withdrawal?
While the MEA did not provide specifics, reports suggest:
- Bangladesh halted the import of Indian yarn via land ports in March.
- A government committee in Dhaka recommended the closure of three key land ports — Chilahati, Daulatganj, and Tegamukh — along with suspending operations at Balla port.
- These developments created barriers for Indian exporters, undermining the open trade route previously facilitated by the transhipment agreement.
Exemptions for Landlocked Nations
India clarified that the transhipment exemption still applies to Bangladeshi exports to Nepal and Bhutan, in line with World Trade Organization (WTO) obligations to support landlocked countries.
Broader Context: Diplomatic Strains
India-Bangladesh ties have seen growing tensions since former PM Sheikh Hasina fled Dhaka in August 2024 amid large-scale protests. The current interim government, led by Muhammad Yunus, has faced criticism for failing to address attacks on minorities, especially the Hindu community.
India’s diplomatic engagement with Bangladesh appears cautious, even as it keeps a close eye on developments, including Pakistan’s renewed outreach to Dhaka — a move the MEA has acknowledged but not yet formally responded to.
The withdrawal of the transhipment facility marks a notable shift in India’s regional trade diplomacy, suggesting a tougher stance on reciprocity and reliability in cross-border arrangements. As the region grapples with internal political changes, India’s message is clear — economic cooperation must be mutual and stable.
