How will India’s new import restrictions impact Bangladesh’s exports?

For years, it took just about three hours and an 80-kilometre truck ride for PRAN’s fruit-flavoured beverage Frooto, produced in Habiganj Industrial Park, to reach Agartala in India’s Tripura through the Akhaura border. But a new Indian restriction on land imports from Bangladesh has thrown the PRAN Group into a logistical nightmare.

Now, to get the same shipment to Agartala, it must travel nearly 2,000 kilometres through the Bhomra Land Port, passing through four Indian states--adding several days to the journey.

PRAN officials fear that once the price inflation from this detour is factored in, the feasibility of exporting such goods to India’s remote northeastern states, known as the “Seven Sisters”, becomes highly uncertain.

The restrictions don’t just affect Frooto. India has barred several categories of goods from entering through land customs stations in Assam, Meghalaya, Tripura, and Mizoram, as well as through West Bengal’s Changrabandha and Fulbari posts.

The banned items include fruit and fruit-based drinks, carbonated beverages, processed foods such as bakery items, chips and snacks, confectionery, cotton and yarn waste, PVC and other plastic products, and wooden furniture.

It’s not just PRAN: Bangladeshi exporters across these sectors now face serious obstacles.

More alarmingly, the readymade garments (RMG) sector – Bangladesh’s leading export industry – is also caught in the crosshairs.

India’s new directive, issued on Saturday, prohibits any entry of RMG products from Bangladesh via land ports. These goods can now only enter through Kolkata and Mumbai’s seaports, Haldia and Jawaharlal Nehru (Nhava Sheva), respectively.

Previously, sending a truckload of garments from Benapole to Kolkata cost around Tk 600,000 and took three days. That same shipment, rerouted through Chattogram port and Haldia, will now take up to eight times longer and cost nearly twice as much.

As a result, exporters have suspended shipments through these ports until logistics at Kolkata and Mumbai are clarified. Trucks scheduled to depart for Benapole and other land ports on Sunday morning were cancelled. Dozens that had already departed on Saturday are now stuck at various borders.

Exporters fear this clampdown could deliver a major blow to Bangladesh’s trade with its largest neighbour. But they are yet to quantify the full financial impact.

Citing India’s Global Trade Research Initiative (GTRI), Indian media reports estimate that the new curbs could affect $770 million worth of Bangladeshi exports, roughly 42 percent of India’s total imports from Bangladesh.

Indian traders, too, may face losses from the move, especially in garments and processed foods, as their government restricts at least seven categories of goods.

Sheikh Bashir Uddin, commerce advisor to the interim government, offered a more diplomatic response on Monday.

“Indian traders will also be affected,” he said to reporters. “We’re two geographically connected countries. This is part of the evolving trade management process. We hope both sides can find a resolution through dialogue. Several land ports remain open.”

He confirmed that Bangladesh will raise the issue with Indian authorities. “We will definitely highlight our concerns and work towards resolving these problems.”

TRADE DYNAMICS BETWEEN BANGLADESH AND INDIA

Bangladesh mainly exports ready-made garments, biscuits, frozen foods, fish, shrimp, home textiles, raw jute and jute goods, handicrafts, leather and leather products, electronics, televisions, refrigerators, ovens, and household appliances to India.

India ranks as the seventh-largest export destination for Bangladeshi products by value.

According to Bangladesh Bank, exports to India totalled $1.55 billion in FY2023–24, accounting for 4 percent of Bangladesh’s total exports.

Of this, ready-made garment exports amounted to $539.4 million, while home textiles brought in $2.5 million.

In return, Bangladesh imports over 30 types of goods from India every year, including yarn, cotton, machinery, food items, packaging materials, fuel, electricity, and animal feed.

India is Bangladesh’s second-largest import source. In FY2023–24, Bangladesh imported $9 billion worth of goods from India, representing 14.3 percent of total imports.

ENTREPRENEURS WATCH CLOSELY

Sending goods from India’s mainland to its northeastern states takes thousands of kilometres and high costs.

In contrast, Bangladesh’s proximity made exports to the “Seven Sisters”faster and cheaper, fuelling steady trade growth.

Until now, goods moved via Akhaura, Moulvibazar and Sylhet to Tripura, Mizoram, Assam, Shillong, and Meghalaya.

West Bengal and other Indian states received goods through Jashore, Panchagarh, and Lalmonirhat.

With new land route restrictions, Bangladeshi garments must now go through Kolkata port, then travel 1,500–2,000km by road to reach their final destinations.

India has not restricted other goods at Benapole or Hili, though food is not imported via Benapole, and Bangladesh does not export food through Hili. Shatkhira’s Bhomra port remains an alternative.

To cut transit time, companies like PRAN-RFL had set up factories near the border. Their shipments once crossed in a day — now they face 10-day delays, port formalities, and added costs.

With land exports disrupted, businesses are now preparing necessary documentation, no-objection certificates, and vehicle arrangements for rerouting goods through Kolkata.

“We are monitoring the situation closely and will act in a few days,” said Eleash Mridha, chief of marketing and deputy managing director of Pran-RFL Group.

“Costs and delivery time will increase. Goods will require multiple loading and unloading stages, and travel thousands of kilometres by road. It’s not going to be easy.”

He warned the situation could hurt trade on both sides. “If no solution is found, economic activity in those Indian states will suffer.”

Pran-RFL exports over $10 million worth of goods annually to India, including fruit drinks, biscuits, frozen foods, and plastic items—most of which go to the “Seven Sister” states.

Electronics and other products are also shipped, though not currently under restriction.

Still, traders remain on edge. Dipak Kumar Boral, a member of the India-Bangladesh Chamber of Commerce and Industry and Chairman of DSM Commodities, told bdnews24.com: “India and Bangladesh have a growing economic relationship.

“If the restriction stays limited to just a few items, it would be better for both sides.”

Olympic Industries, which exports biscuits, is also monitoring. “We export a small volume, but with more curbs, everyone needs to stay alert,” said Chairman Aziz Mohammad.

EXPORT TRUCKS STUCK AT BORDER

India imposed a sudden restriction on select Bangladeshi exports via land routes on Saturday, prompting its customs authorities at Petrapole Land Port to suspend clearance of the affected goods.

The move has left dozens of export-bound trucks stranded at several border points.

Among them, 36 trucks carrying readymade garments were stuck at Benapole while 17 trucks from PRAN were held up at the Burimari border.

Clearing and forwarding (C&F) agents are now working to release consignments that had already arrived at ports under earlier issued letters of credit (LCs).

“No gate pass has been issued by Petrapole authorities for any consignment that falls under the export restriction,” said Sajedur Rahman, general secretary of the Benapole C&F Agent Staff Association.

“Since the LCs were opened earlier, we are trying to get the goods cleared.”

Mamun Kabir Tarafdar, deputy director (traffic) at Benapole Land Port Authority, told bdnews24.com: “Imports and exports are continuing as usual, but shipments of restricted items have been halted.”

FICCI CALLS EMERGENCY MEETING

The Foreign Investors’ Chamber of Commerce and Industry (FICCI), which represents multinationals and foreign firms operating in Bangladesh, has called an urgent meeting with its members to assess the fallout from India’s new export restrictions.

Several FICCI members export goods from Bangladesh to several Indian states, including Indian companies with operations in Bangladesh that manufacture and ship products across the border.

“We are closely monitoring the situation,” said FICCI Executive Director Nurul Kabir to bdnews24.com. “Once we have a full picture, we will determine the next course of action.

“But such decisions are clearly not conducive to trade. Feedback from members will help us gauge the overall impact,” he added.