India clamps down on Bangladesh imports via land ports: What it means for Dhaka

Key Bangladeshi exports, including garments, must now enter via seaports. India also revoked Bangladesh's transshipment facility access, limiting it to Nepal and Bhutan.

In a sharp escalation of trade tensions, India has imposed sweeping restrictions on Bangladeshi imports via land ports—a move that experts warn could deliver a $770 million blow to Dhaka's export economy. The decision, formalised by the Union Ministry of Commerce and Industry on May 17, follows recommendations from the Directorate General of Foreign Trade (DGFT) and signals a recalibration of India's trade policy towards its eastern neighbour.

According to the Global Trade Research Initiative (GTRI), the clampdown is far from arbitrary. "The restrictions look like India's response to Dhaka restricting imports from India on a large number of items and diplomatic pivot towards China," the think tank said in its analysis. The order restricts major Bangladeshi export items, including readymade garments, processed foods, plastics, and furniture, to select seaports such as Kolkata and Nhava Sheva, effectively shutting off access to India's land customs stations in the Northeast and beyond.

Garments alone, worth $618 million annually, will now be routed exclusively through these two ports, bypassing traditional land corridors like Petrapole and Benapole. The overall impact covers nearly 42% of Bangladesh's exports to India, GTRI noted.

The move appears to be a direct counter to recent trade curbs by Bangladesh. In April, Dhaka banned the import of Indian yarn through five key land ports and restricted other goods such as rice, tobacco, fish, and dairy products. Bangladesh also imposed a transit fee of 1.8 taka per tonne per kilometre on Indian cargo—a move that raised logistical costs and irked Indian exporters facing increasing delays and tighter inspections at Bangladeshi ports.

India's response has been incremental but strategic. On April 9, New Delhi revoked a crucial transshipment facility granted to Bangladesh in 2020, which had allowed Dhaka to export goods to Europe and the Middle East via Indian infrastructure, including Delhi airport. That access has now been limited to only Nepal and Bhutan.

Geopolitics, too, seems to be influencing trade. Remarks made by Bangladesh's interim head of government Muhammad Yunus during a visit to China further strained relations. Yunus described Bangladesh as the "only guardian" of the Indian Ocean and claimed that India's northeastern states were landlocked and dependent on Bangladesh for maritime access. He also offered Chinese authorities access to Bangladeshi trade corridors—comments that have not gone down well in New Delhi.