India places restrictions on entry of Bangladeshi merchandise from a number of ports as Yunus rakes up northeast once more
India has restricted Bangladeshi garment and shopper items imports to 2 seaports, escalating commerce tensions amid worsening diplomatic ties.
In a transfer more likely to deepen the continuing diplomatic rift, India on Saturday imposed recent restrictions on Bangladeshi shopper items, limiting their entry solely by way of two designated seaports — Kolkata and Nhava Sheva. The choice successfully blocks the entry of Bangladeshi readymade clothes (RMG) and a number of other different objects by way of the northeastern land transit factors, considerably impacting commerce flows between the 2 neighbours.
The brand new restrictions, issued by way of a notification by the Directorate Normal of Overseas Commerce (DGFT), bar imports of not simply RMG but additionally plastics, wood furnishings, carbonated drinks, processed meals objects, fruit-flavoured drinks, cotton, and cotton yarn waste by way of the land customs stations (LCS) and built-in test posts (ICPs) in Assam, Meghalaya, Tripura, and Mizoram, in addition to Phulbari and Changrabandha in West Bengal.
The transfer comes barely 5 weeks after India ended a virtually five-year-old trans-shipment association that had allowed Bangladeshi export cargo to maneuver to 3rd international locations through Indian ports and airports — a step that had as soon as symbolized deepening financial cooperation between the 2 South Asian neighbours.
Tit-for-tat coverage amid rising tensions
Authorities officers aware of the event mentioned the choice was pushed by longstanding commerce asymmetries and Bangladesh’s refusal to ease restrictions on Indian exports, notably from the northeastern area. Indian authorities have accused Dhaka of denying entry to value-added items from the Northeast and implementing discriminatory port and transit expenses which have hampered industrial development within the area.
“There are 11 land transit factors between India and Bangladesh within the Northeast. Regardless of India permitting Bangladeshi items free entry by way of these factors for years, Bangladesh has constantly restricted entry for Indian merchandise, particularly yarn, processed items, and rice,” an official mentioned, requesting anonymity.
Bangladesh lately stopped yarn imports from India by way of land routes as of April 13 and additional restricted rice imports by way of Hili and Benapole from April 15. Moreover, Indian exports reportedly face rigorous inspections at Bangladeshi ports.
Officers additionally cited “unreasonably excessive” and “economically unviable” transit expenses imposed by Bangladesh as one of many key causes behind India’s determination.
Financial influence
The brand new restrictions are anticipated to hit Bangladesh’s profitable RMG sector, which is valued globally at over $38 billion. India accounts for a comparatively small however important share of this market, with round $700 million price of annual imports — 93% of which had beforehand entered by way of northeastern land routes.
By forcing all RMG shipments to now move by way of solely two seaports, India’s transfer is predicted to extend transit time and prices for Bangladeshi exporters, probably rendering their items much less aggressive within the Indian market.
In distinction, Indian exporters within the Northeast have lengthy complained of restricted entry to the Bangladeshi market, leading to a heavy reliance on agriculture exports whereas limiting industrial development within the area. The newest coverage shift is being seen as a corrective measure aimed toward levelling the taking part in area and supporting the central authorities’s ‘Atmanirbhar Bharat’ (self-reliant India) initiative.
Political backdrop
This shift in commerce coverage follows a pointy deterioration in India-Bangladesh relations after the ousting of Bangladeshi Prime Minister Sheikh Hasina in August 2024. Hasina fled to India amidst huge protests towards her authorities. The interim administration in Dhaka, led by Muhammad Yunus, has since struggled to include political unrest and rising communal tensions, together with assaults on minority communities.
The political instability has additional strained bilateral ties, with each side accusing one another of unfair commerce practices and diplomatic provocation.
As tensions escalate, the way forward for India-Bangladesh financial cooperation stays unsure — a pointy distinction to the optimism that prevailed only a few years in the past.
