India has withdrawn a key transshipment facility previously granted to Bangladesh, a decision that comes shortly after controversial remarks made by Muhammad Yunus, the chief advisor of Bangladesh’s interim government. Yunus’s description of India’s Northeast as a “landlocked” region dependent on Dhaka for oceanic access triggered a strong diplomatic response.
The decision to rescind the facility was formalized through a circular issued by the Central Board of Indirect Taxes and Customs on April 8th. This action effectively terminates a 2020 agreement that allowed Bangladesh to route its export cargo to third countries via Indian Land Customs Stations and subsequently to ports and airports. The circular stated, “It has been decided to rescind… circular…dated June 29, 2020, as amended with immediate effect. Cargo already entered into India may be allowed to exit the Indian territory as per the procedure.”
This transshipment arrangement had facilitated smoother trade for Bangladesh, particularly with Bhutan, Nepal, and Myanmar. However, Indian exporters, especially those in the apparel sector, had voiced concerns about the arrangement. The Apparel Export Promotion Council (AEPC) Chairman, Sudhir Sekhri, had previously reported that a significant number of Bangladeshi trucks, estimated at 20-30 daily, were causing congestion at Delhi cargo terminals and driving up freight costs.
The withdrawal of this facility reflects a complex interplay of diplomatic sensitivities and trade logistics. While the stated concerns of Indian exporters regarding congestion and costs are a factor, the timing of the decision, following the controversial remarks by a high-ranking Bangladeshi official, suggests a potential link to broader diplomatic tensions. The move could have implications for regional trade dynamics and bilateral relations between India and Bangladesh.
