In a move signaling escalating trade friction, India has imposed a ban on the import of a wide array of goods from Bangladesh via land routes, intensifying concerns in Dhaka already grappling with a substantial trade imbalance with its neighbor.
A notification issued by India’s Commerce Ministry on May 17th stipulates that imports from Bangladesh will now be exclusively permitted through the seaports of Nhava Sheva in Mumbai and Kolkata. This directive effectively closes the land customs check posts in Assam, Meghalaya, Tripura, Mizoram, and the West Bengal locations of Changrabandha and Fulbari for numerous Bangladeshi products.
The list of prohibited imports includes fruits, fruit-flavored and carbonated beverages, processed food items, wooden furniture, plastic articles, dyes, and cotton and cotton yarn waste. However, certain essential commodities such as fish, edible oil, Liquefied Petroleum Gas (LPG), and crushed stones have been exempted from these restrictions.
This decision is anticipated to inflate the cost of Bangladeshi goods for Indian buyers, potentially dampening their interest. Furthermore, Bangladesh, a significant player in the textile and ready-made garment sectors, will face considerable logistical challenges as it can no longer utilize land routes for these key exports, posing a severe setback to its export operations.
The recent action follows India’s suspension last month of a transshipment facility that had facilitated the smooth transit of Bangladesh’s export cargo to neighboring countries like Bhutan, Nepal, and Myanmar. Shortly thereafter, Bangladesh retaliated by halting its import of yarn, a crucial component accounting for 30 percent of Delhi’s textile exports to Dhaka, through several key land ports.
Amidst these escalating trade tensions, Bangladesh’s Chief Adviser Muhammad Yunus last week advocated for “an integrated economic plan for Bangladesh, Nepal, Bhutan, and the Seven Sisters” of Northeast India. This proposition emerged two months after Yunus encouraged China to broaden its economic influence to encompass not only Bangladesh but also India’s northeastern states.