India’s trade restrictions on Bangladesh may not immediately affect jobs, but ILO warns of long-term risks for formal employment. The move could impact $770 million worth of goods and reshape bilateral trade dynamics.

India's trade restrictions are likely to have a long-term impact on Bangladesh’s employment landscape, a senior official of the International Labour Organization (ILO) in Dhaka said on Monday.

ILO Country Director Tuomo Poutiainen made the remarks during a media briefing marking the end of his tenure in Bangladesh.

“Generally, I don't think there will be an imminent impact on employment in Bangladesh, because much of it lies in the informal economy—agriculture and other sectors that can continue to generate employment on their own. But in the longer term, formal businesses may be affected—not only due to this, but also because of global trade circumstances,” Poutiainen said, when asked about the possible consequences of India’s import restrictions.

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He stressed the need for Bangladesh to recalibrate its employment strategies, enhance skill development, and diversify its exports. “It’s very important for Bangladesh to understand the quality of labour, the expectations of its trading partners, and continuously study and adapt its trade negotiation strategies,” he added.

Earlier on Saturday, India’s Ministry of Commerce and Industry imposed immediate restrictions on the import of several categories of goods from Bangladesh via land ports. The decision followed a directive from the Directorate General of Foreign Trade (DGFT).

According to the Global Trade Research Initiative (GTRI), the move could impact goods worth USD 770 million—nearly 42% of India’s total bilateral imports from Bangladesh.

The new policy now limits the entry of products such as ready-made garments and processed foods to only two seaports—Nhava Sheva and Kolkata—effectively banning their entry through land ports. This shift is widely interpreted as a response to recent trade decisions by Dhaka, including restrictions on Indian yarn and rice, and the imposition of a transit fee on Indian cargo—marking a clear departure from earlier cooperative trade ties.