India declared on Wednesday that it has revoked the transshipment facility granted to Bangladesh in 2020, attributing the decision to severe congestion at its airports and ports.
The Central Board of Indirect Taxes and Customs (CBIC) released a circular confirming the discontinuation of the transshipment facility, which enabled cargo exports from Bangladesh to third countries through Indian Land Customs Stations, reaching Indian ports and airports.
The decision comes in the wake of controversial comments by Bangladesh’s interim government leader, Muhammad Yunus, who referred to India’s Northeast as ‘landlocked’ and advocated for Chinese autonomy in the region.
The transshipment facility provided to Bangladesh led to considerable congestion at Indian airports and ports. The Ministry stated that logistical delays and increased costs were affecting India’s exports and causing backlogs.
The Ministry of External Affairs clarified that the measures will not affect Bangladesh’s exports to Nepal or Bhutan passing through Indian territory. The facility, introduced by India for Bangladesh in June 2020, supported seamless trade for Bangladeshi exports to nations such as Bhutan, Nepal, and Myanmar.
Indian exporters, especially those in the apparel industry, had consistently opposed the arrangement. According to Apparel Export Promotion Council (AEPC) Chairman Sudhir Sekhri, around 20-30 Bangladeshi trucks entered Delhi daily, leading to congestion at cargo terminals and driving up freight costs.
The move coincides with the U.S. implementation of widespread tariffs on multiple nations, including India and Bangladesh. Bangladesh utilizes Delhi airport to transport export cargo to third countries. The arrangement was granted to the neighboring nation in 2023.
Trade experts believe the decision will benefit several Indian export industries, including apparel, footwear, gems, and jewelry.
India’s decision to block the corridor to Bangladesh risks diplomatic tensions and logistical challenges for transit countries, including supply-chain delays in Myanmar.
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