NEW DELHI: In a move with significant trade implications, India has discontinued the transshipment facility that allowed Bangladeshi cargo to be routed through Indian airports and ports en route to third countries. The decision is expected to affect apparel exports from Bangladesh, particularly air shipments via Delhi used by global fashion brands like Zara.
A customs circular issued Tuesday confirmed that cargo already within Indian territory will be allowed to exit, but no new consignments for third-country destinations will be accepted under the transshipment arrangement. The Ministry of External Affairs (MEA) clarified that the decision will not impact Bangladesh’s trade with Nepal and Bhutan, which continues to transit through India.
“The transshipment facility had been contributing to significant congestion at Indian airports and ports, delaying our own exports and increasing logistical costs,” said MEA spokesperson Randhir Jaiswal. “Effective April 8, 2025, the facility has been withdrawn. This measure is necessary to ease backlogs and prioritize space for Indian exporters.”
The move follows rising tensions in India-Bangladesh relations and came shortly after controversial comments made by Bangladesh’s Chief Advisor Muhammad Yunus during a visit to China. Yunus referred to India’s northeastern states as “landlocked,” drawing a sharp rebuttal from Prime Minister Narendra Modi.
Trade experts suggest broader geopolitical factors may also be at play. According to the Global Trade Research Initiative (GTRI), Bangladesh’s decision to invite Chinese investment to develop the Lalmonirhat air base—close to India’s strategic Siliguri Corridor or ‘Chicken’s Neck’—could have influenced the Indian government’s move. “India has long provided zero-duty access to Bangladeshi goods, barring alcohol and tobacco. But security concerns surrounding Chinese involvement in critical border regions cannot be ignored,” GTRI noted.
Indian exporters have welcomed the decision, viewing it as a long-overdue correction. “The Apparel Export Promotion Council had been requesting the government to end this facility,” said council secretary general Mithileshwar Thakur. “This will help bring down freight costs for Indian exporters and reduce congestion at key transit points, resulting in faster turnaround times for shipments.”
The MEA also used the occasion to renew its call for Bangladesh to investigate rising instances of violence against religious minorities. Spokesperson Jaiswal said Prime Minister Modi had personally raised the issue with Muhammad Yunus during their recent meeting in Bangkok. “This cannot be dismissed as media exaggeration. It is a matter of serious concern,” Jaiswal said. Yunus had previously claimed many reports of such violence were based on misinformation.
