India has ended a nearly five-year-old arrangement for trans-shipment of Bangladeshi export cargo to third countries via Indian airports and ports, a move that comes amid increasingly strained relations between the two countries.
The external affairs ministry on Wednesday cited congestion at Indian airports and ports as the reason for the move, which came days after Bangladesh interim government chief Muhammad Yunus’s controversial remarks about leveraging the isolation of India’s landlocked northeastern states while seeking Chinese investments.
A circular from India’s customs department issued on April 8 rescinded the arrangement of June 2020 allowing the trans-shipment of export cargo from Bangladesh to third countries via Indian airports and ports. Bangladesh has used the arrangement to move cargo through Indian land customs stations to be trans-shipped to destinations in Europe, West Asia and other regions.
“This was a facility that was extended to Bangladesh in 2020. The trans-shipment facility extended to Bangladesh had, over a period of time, resulted in significant congestion at our airports and ports,” external affairs ministry spokesperson Randhir Jaiswal told a weekly media briefing.
“Logistical delays and higher costs were hindering our own exports and creating backlogs. The facility, therefore, has been withdrawn with effect from April 8, 2025,” he said.
Jaiswal clarified that these measures would “not impact Bangladesh’s exports to Nepal or Bhutan transiting through Indian territory”.
Under the terms of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA), which India ratified in 2016, New Delhi has to facilitate trade for landlocked developing countries (LLDCs). People familiar with the matter said on condition of anonymity that trans-shipment of goods from Bangladesh to Bhutan and Nepal will continue under the terms of the TFA.
Over the past four years, Bangladesh has used several Indian airports and ports, including the New Delhi and Kolkata airports, for sending export cargo to different regions around the world. During the past 10 years, the Indian side took several initiatives to enhance trade connectivity with Bangladesh, especially measures to facilitate the trans-shipment of goods from other parts of the country to the northeastern states via Bangladeshi territory.
Relations between India and Bangladesh have been in freefall since then premier Sheikh Hasina’s government was ousted following weeks of student-led protests last August and the interim government headed by Yunus assumed office. India has repeatedly urged Bangladesh to prevent the repression of minorities, including Hindus, and expressed concern at an increase in radicalisation.
Days before a meeting between Yunus and Prime Minister Narendra Modi on the margins of the Bimstec Summit in Thailand last week, the Bangladeshi leader appeared to leverage the geographical isolation of India’s northeastern states while seeking Chinese investments. Addressing a business meeting during a visit to China, Yunus said India’s landlocked northeast, which shares a nearly 1,600-km border with Bangladesh, has no way to reach the ocean except through his country.
“This opens up a huge possibility, this could be an extension of the Chinese economy,” Yunus said.
In an apparent riposte to Yunus, Modi made it clear that India’s northeastern region, with its geographical location, “lies at the heart of Bimstec”. External affairs minister S Jaishankar told a meeting of Bimstec foreign ministers that India’s northeast can become a regional connectivity hub with the completion of a highway that will link the region to Myanmar and Thailand.
Jaiswal said that the status of Bangladesh’s minorities came up for discussion at the Modi-Yunus meeting in Bangkok on April 4. “We have conveyed our concerns regarding the treatment of minorities, the kind of violence that has happened against them and we also highlighted…that the violence and atrocities against the minorities cannot be just wished away or said that they are because of political reasons or they are media exaggerations,” he said.
“We hope that the Bangladesh government will take strong action against those who are responsible for these atrocities,” Jaiswal said.
In the context of Bangladesh’s call for discussing matters related to the sharing of waters of the Ganga and the Teesta, Jaiswal said all matters related to 54 cross-border rivers come under the ambit of the Joint Rivers Commission. “We are ready to discuss all issues, provided that they are mutually agreed upon and provided that the overall environment is conducive for the same,” he said.