India Restricts Bangladeshi Imports to Two Ports Amid Rising Trade Tensions

In a decisive response to mounting trade imbalances and unequal treatment by Dhaka, India on Saturday imposed sweeping new India-Bangladesh trade restrictions, significantly tightening the flow of Bangladeshi goods into the country. The move, driven by concerns over reciprocity, regional equity, and national interests, reshapes one of South Asia’s most crucial bilateral trade routes.

Effective immediately, all ready-made garments (RMG) from Bangladesh, worth a substantial $700 million annually, will only be allowed through Kolkata and Nhava Sheva seaports. This shift hits at the heart of Dhaka’s garment trade, considering 93% of these exports previously entered India via land ports, now curtailed by the new directive.

Simultaneously, India has blocked the import of a wide range of consumer goods—including processed foods, plastic items, wooden furniture, and carbonated beverages—through 11 key land customs stations (LCSs) across the northeastern states of Assam, Meghalaya, Tripura, Mizoram, and West Bengal. These include the Phulbari and Changrabandha posts in West Bengal, previously used as rerouting points to circumvent northeast-specific restrictions.

Reciprocity and Redressal: Why India Acted

Officials familiar with the matter clarified that the new India-Bangladesh trade restrictions were a long time coming. “India offered a liberal trading environment to Bangladesh, including full access to our land customs stations and seaports, but this generosity hasn’t been reciprocated,” said a senior government official.

India has repeatedly flagged issues in bilateral trade dialogues: Dhaka’s refusal to allow Indian yarn exports via land ports, restrictions on rice exports, and disproportionate transit fees of 1.8 taka per tonne per kilometre have raised eyebrows in New Delhi. Moreover, locally made goods from India’s northeastern states continue to face barriers entering Bangladesh, stunting the economic prospects of a region already struggling with logistical and infrastructural constraints.

“The trade imbalance doesn’t stem from demand,” an official remarked. “It’s an orchestrated outcome of discriminatory port access and targeted barriers imposed by Bangladesh.”

Political Friction Deepens Trade Divide

These India-Bangladesh trade restrictions arrive amidst a broader chill in bilateral ties, particularly following the ousting of former Bangladeshi Prime Minister Sheikh Hasina. The new interim government led by Muhammad Yunus has not only failed to address India’s trade concerns but has also aggravated tensions by leaning into strategic rhetoric that unsettled Delhi.

Yunus’s remarks during a visit to China, where he labeled Bangladesh as the “gateway to the sea” for India’s landlocked northeast, were seen as veiled pressure tactics. Suggesting that this dependency could benefit China drew swift pushback from Indian leaders.

Prime Minister Narendra Modi emphasized that the northeast is not an isolated appendage but a central node in India’s BIMSTEC vision—a multilateral cooperation forum connecting South and Southeast Asia. Echoing this, External Affairs Minister S. Jaishankar spoke of transformative projects like the India-Myanmar-Thailand highway, aimed at reducing dependency on any single route.

Impact on Bangladesh and the Region

The recalibrated policy is expected to squeeze Bangladesh’s export pipeline, especially in the absence of flexibility at Indian land ports. For small and mid-sized Bangladeshi exporters, who rely heavily on low-cost overland trade routes, the new rules represent a logistical and financial setback.

However, India has made it clear that the restrictions do not apply to Bangladeshi goods transiting to Nepal and Bhutan. This nuanced approach signals that the decision is not punitive, but corrective, meant to establish fairness in bilateral trade.

More importantly, the move also aims to revitalize manufacturing in India’s northeastern states, which have long suffered from competition with low-cost Bangladeshi imports, particularly in garments, food processing, and plastics. Central government schemes have struggled to gain traction in the region, partly due to this unbalanced trade equation.

A Turning Point for Regional Trade?

As of FY2024, bilateral trade stood at $12.90 billion, with India exporting goods worth $11.06 billion and importing $1.8 billion. While India remains one of Bangladesh’s largest trading partners, the new India-Bangladesh trade restrictions send a clear message: access to the Indian market is no longer unconditional.

“Trade must be built on mutual respect, not selective privilege,” a senior diplomat concluded. “India’s northeast is not a dumping ground. It’s a growth engine—and our trade policy will reflect that from now on.”

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