New Delhi: India’s decision to tighten import entry points for a range of Bangladeshi goods has sent ripples through Dhaka’s export sector and raised questions about the future of bilateral trade.
Coming at a time of political recalibration in Bangladesh and growing Indian concerns over Dhaka’s evolving strategic posture, the port restrictions can be seen as a calibrated pressure tactic. Bangladesh interim government Commerce Adviser Sk Bashir Uddin’s assurance on Sunday that bilateral trade would remain “uninterrupted” suggests an effort to contain fallout, but it may not be enough to mask the unease now shadowing India-Bangladesh economic cooperation.
“We have not yet received any official communication from the Indian side,” the Dhaka Tribune news website quoted Bashir Uddin as telling reporters at the Secretariat in Dhaka. “Once we do, we will take appropriate steps. If any issues arise, both sides will work to resolve them through discussions.”
The Directorate General of Foreign Trade (DGFT) under India’s Ministry of Commerce and Industry issued a notification on Saturday imposing port restrictions on the import of certain goods such as readymade garments, processed food items etc., from Bangladesh to India. However, such said port restriction will not apply to Bangladeshi goods transiting through India but destined for Nepal and Bhutan.
The directive has come into effect immediately.
“Import of all kinds of readymade garments from Bangladesh shall not be allowed from any land port, however, it is allowed only through Nhava Sheva and Kolkata seaports,” a press release issued by the DGFT stated. “Import of fruit/fruit-flavoured and carbonated drinks; processed food items; cotton and cotton yarn waste; plastic and PVC finished goods, except pigments, dyes, plasticisers and granules that form input for own industries; and wooden furniture, shall not be allowed through any Land Customs Stations (LCSs)/Integrated Check Posts (ICPs) in Assam, Meghalaya, Tripura and Mizoram; and LCS Changrabandha and Fulbari in West Bengal.
The port restrictions do not apply to the import of fish, LPG, edible oil, and crushed stone from Bangladesh.”
Bangladesh is India’s biggest trade partner in South Asia and India is the second biggest trade partner of Bangladesh in Asia. Bangladesh exported $1.97 billion of goods to India in Financial Year (FY) 2023-24. In FY 2023-24, the total bilateral trade has been reported as $14.01 billion, according to figures provided by the External Affairs Ministry.
Asked if India’s decision will negatively impact Bangladesh’s exports, Bashir, according to the Dhaka Tribune, said: “Not everything we export is affected. A large portion of our exports comes from the garment sector. Our focus remains on achieving competitiveness. Trade is beneficial to both countries. India also has a strong textile industry, yet they import our products based on our capabilities.”
He also expressed optimism that the trade will continue, adding that “this is in the interest of consumers and production sectors on both sides”.
India’s port restriction measure marks a shift from the traditionally liberalised trade regime India maintained with Bangladesh, particularly since the early 2010s. It appears to be a strategic economic signal, reflecting diplomatic discomfort with developments in Dhaka, especially after the ouster of Prime Minister Sheikh Hasina in August 2024 and the subsequent regime’s perceived tilt towards China and Pakistan. The new regime’s decisions, such as inviting Chinese military advisers and cooling ties with India, have triggered unease in New Delhi.
By limiting import entry points, India has seemingly exerted economic pressure on Dhaka without invoking direct tariffs or bans, maintaining WTO compliance while signalling disapproval.
Bangladesh's exports to India have totalled around $1.97 billion in FY24, as cited by the External Affairs Ministry, a slight decrease from $2 billion in FY23. This decline is attributed to factors such as currency depreciation, logistical challenges, and non-tariff barriers. Notably, exports of ready-made garments (RMG), a cornerstone of Bangladesh's export economy, have seen a downturn. In FY24, knitwear exports to India fell by 34.05 percent to $204.11 million, and woven garment exports declined by 11.79 percent to $391.42 million.
Despite these challenges, Bangladesh continues to export a variety of goods to India. India imported approximately $218.3 million worth of jute products in 2023. Leather goods imports amounted to $101.39 million, seafood to $46.66 million and footwear imports totalled $70.75 million. Miscellaneous textiles, including worn clothing, that were imported totalled $149.39 million.
“These kinds of restrictions are very common across the world,” Prabir De, Professor at the New Delhi-based Research and Information System for Developing Nations (RIS) think tank, told ETV Bharat. “In 2006-08, the SAFTA (South Asian Free Trade Agreement) was introduced. India generously supported imports of almost everything from Bangladesh except 25 items under the negative list.”
However, he explained that India restricted imports through the Agartala ICT and wanted these to come through the Petrapole ICT in West Bengal.
“Even before the 2024 uprising in Bangladesh, there were trade issues between India and Bangladesh, including anti-dumping issues,” De said. “There is an issue of GVC (global value check) because India’s imports of garments from Bangladesh are heavily sold through retail chains.”
He further stated that Indian garment makers, specially those making inner garments, based in Tamil Nadu and other southern states, have been suffering.
“Many of our MSMEs (micro, small and medium enterprises) are struggling or have closed down,” De said. “India wants to support our MSMEs in the garment sector. Now, under US President Donald Trump’s tariffs, we have a chance to export garments globally, including the US.”
According to Dhaka-based journalist Saifur Rahman Tapan, Commerce Adviser Bashir Uddin could not say anything much as India’s step went beyond the interim government’s imagination.
“When India stopped transhipment facilities for Bangladeshi goods, the Commerce Adviser claimed that it would not cause much loss to the country’s economy,” Tapan told ETV Bharat over phone from Dhaka. “However, later they acknowledged that the losses would amount to Bangladeshi taka 2,000 crore.”
He said that now with India restricting the import of Bangladeshi goods only through seaports, apparel exporters in his country think that it will cost much more than Bangladeshi taka 2,000 crore.
“This has become a huge embarrassment for our government,” Tapan said.
