Exporters rattled as India shuts land ports to key Bangladeshi goods

India has suspended the import of at least seven categories of Bangladeshi goods—ranging from readymade garments to processed foods—through land ports, a move that could severely disrupt trade for Bangladeshi exporters.

The Directorate General of Foreign Trade (DGFT), under India’s Ministry of Commerce and Industry, clamped the restrictions in a notification on Saturday.

According to the notice, no garment products from Bangladesh will be permitted entry via any Indian land port. Instead, these products must now be routed exclusively through the Nhava Sheva sea ports in Kolkata and Mumbai.

The notification also bans the import of several other Bangladeshi products through land routes. These include fruit-flavoured and carbonated drinks, processed food items, cotton and cotton yarn waste, and plastic and PVC finished goods (excluding pigments, dyes, plasticisers, and granules), as well as wooden furniture.

The restrictions specifically apply to imports via land customs stations or Integrated Check Post (ICP) in Assam, Meghalaya, Tripura, Mizoram, and West Bengal’s Changrabandha and Fulbari.

The ban, which took immediate effect, comes just a month after Bangladesh imposed restrictions on Indian yarn imports via land ports.

However, India continues to allow the import of certain Bangladeshi products, including fish, liquefied petroleum gas (LPG), cooking oil, and crushed stone.

The exemptions also apply to goods transiting through India en route to Nepal and Bhutan from Bangladesh.

Analysts say the move represents a harsher stance toward Bangladesh than the high tariffs recently imposed by the United States on Chinese imports.

Former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) director Mohiuddin Rubel told bdnews24.com, “Now, sending goods by sea to specific destinations in India will take more time than before, and costs will increase.

“This means there is a risk of a decrease in exports, even if only slightly.”

Small exporters will face more difficulties due to this restriction, as shipping small quantities by sea is not profitable.

According to data from the National Board of Revenue (NBR), Bangladesh exported goods worth nearly Tk 176.59 billion to India in the fiscal year 2022–23.

The amount remained nearly unchanged in the last fiscal year.

In FY 2023–24, Bangladesh exported goods worth Tk 174.25 billion to India. In the first six months of the current fiscal year, exports have totalled Tk 115.77 billion.

India is among the countries where Bangladesh’s garment exports have increased in recent years, with around $700 million worth of garments shipped there annually.

About 93 percent of these garment products are exported via land routes.

As a result, India’s new restrictions are feared to deliver a major blow to the sector, traders have warned.

The Indian English daily, Business Standard, wrote that this move by India has further intensified trade tensions between the two countries.

About a month ago, the NBR stopped importing yarn from India through Benapole, Bhomra, Sonamasjid, Banglabandha and Burimari land ports.

On Apr 9, India cancelled the transhipment facility for goods exported from Bangladesh to third countries.

Now, the neighbouring country has imposed even stricter restrictions on Bangladeshi products.

According to The Times of India, bilateral trade is conducted through 11 land ports in India’s northeastern region, with three located in Assam, two in Meghalaya, and six in Tripura.

Bangladeshi exports to India’s “Seven Sister” states have grown steadily in recent years, and the new restrictions are expected to disrupt those trade ties.

Shams Mahmud, former president of the Dhaka Chamber of Commerce and Industry (DCCI), noted that exporters have been using land ports due to strong demand for Bangladeshi products in India’s northeastern states.

Speaking to bdnews24.com, he said: “If we are now forced to export through Delhi or seaports, transportation costs will rise significantly, as the land route from Bangladesh is much shorter.

“Even small consignments like a single truckload can be sent easily by land, but this is not viable by sea, which drives up costs.”

He added that offloading goods at sea and then trucking them to the northeastern states would substantially increase expenses.

“Whether consumers will still buy the product at the new price remains to be seen,” he said.

On the garments sector, Shams pointed out that some medium-sized Bangladeshi factories currently export apparel to India, and they are likely to be affected by the new restrictions.

Mohiuddin Rubel, additional managing director of Denim Expert, described the move as “retaliatory.”

He warned that the decision could further strain trade relations between the two neighbours, especially at a time when global commerce is facing multiple challenges.

“Such reciprocal measures will only worsen the damage for both countries,” Rubel told bdnews24.com.

He added that the decision was particularly troubling given the recent growth in Bangladesh’s readymade garment exports to India. “There is a real risk that overall trade will suffer,” he said.

Shams, who is also managing director of Shasha Denims, said both countries have benefited from cross-border trade due to Bangladesh’s competitive pricing. He expressed concern over the fate of investments tied to the Indian market.

“I don’t believe the restriction will remain in place for long. Both sides will need to reconsider and find a constructive solution.”

It is not clear to Zahid Hussain, former lead economist of the World Bank’s Dhaka office, why India has suddenly taken such a decision without any discussion.

“No information was heard about this beforehand,” he said. There was no discussion or consultation of any kind. India has not provided any reason either.

“In such cases, a reason is usually required, otherwise issues of [World Trade Organisation] compliance may arise.”

Zahid added, “I assume they will cite security grounds. Otherwise, why is this restriction being imposed now, specifically on land routes? Isn’t that quite a ridiculous basis?

“This trade has been going on for years. What exactly has happened that could make one say exports from Bangladesh to India have suddenly become a security concern?”

[Writing in English by Akramul Momen and Sheikh Fariha Bristy]