India has officially ended the trans-shipment facility that allowed Bangladesh to send goods to other countries using Indian land routes and transport infrastructure. This decision was announced in a government circular issued by the Central Board of Indirect Taxes and Customs on April 8.
The trans-shipment facility was introduced in June 2020 to help Bangladesh export goods to third countries like Nepal, Bhutan, and Myanmar through Indian land customs stations (LCSs), ports, and airports. However, this arrangement has now been cancelled with immediate effect.
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Why Was the Facility Stopped?
Indian exporters, especially from the apparel sector, had requested the government to withdraw the facility. They complained that it caused:
- Congestion at Indian airports, especially Delhi
- Increased air freight charges
- Delays in exporting Indian goods
Sudhir Sekhri, Chairman of AEPC (Apparel Export Promotion Council), mentioned that 20–30 trucks from Bangladesh were arriving at Delhi’s air cargo terminal every day. This made it harder for Indian exporters to get timely access and led to higher shipping costs.
Mithileshwar Thakur, Secretary General of AEPC, said that stopping the facility would:
- Lower transportation costs for Indian exporters
- Reduce congestion at airports
- Improve the speed of exporting Indian goods
How Does This Affect Bangladesh?
Ajay Srivastava from the Global Trade Research Initiative (GTRI) said the decision will cause problems for Bangladesh’s export logistics. Without India’s help, Bangladeshi exporters may face:
- Delays
- Higher costs
- More uncertainty in trade
He also pointed out that this change might affect other countries like Nepal and Bhutan, which rely on smooth transit routes through India and Bangladesh. These landlocked countries may raise concerns about the impact on their trade.
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Growing Trade Competition
Bangladesh is a strong competitor of India in industries like textiles and garments. Indian exporters believe that ending the trans-shipment facility will give them more cargo space and help make their exports more competitive.
India-Bangladesh Relations
Though India has supported Bangladesh in the past by giving duty-free access to most Bangladeshi goods, relations have become strained recently. Issues like attacks on minority communities in Bangladesh and concerns about its growing ties with China, especially near the sensitive Chicken’s Neck area, may have influenced India’s decision.
Current Trade Value
In 2023–24, trade between India and Bangladesh was worth $12.9 billion.
