India ends transshipment facility for Bangladesh exports, cites congestion

India has withdrawn the transshipment facility it had extended to Bangladesh as it was creating “significant congestion” in Indian airports and ports, the Ministry of External Affairs (MEA) said on Wednesday. The move is not aimed to impact Bangladesh’s trade with Nepal and Bhutan, MEA spokesperson Randhir Jaiswal said, at his weekly press briefing.

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The move comes days after Prof. Yunus, Chief Adviser to Bangladesh’s interim government, visited Beijing and made statements that were deemed to be controversial as he advocated greater Chinese trade ties with northeastern India, using Bangladesh ports. Indian officials refused to confirm whether the withdrawal of transhipment facilities was linked to his remarks.

“The transshipment facility extended to Bangladesh had over a period of time resulted in significant congestion at our airports and ports. Logistical delays and higher costs were hindering our own exports and creating backlogs. The facility, therefore, has been withdrawn with effect from April 8, 2025. To clarify, these measures do not impact Bangladesh exports to Nepal or Bhutan transiting through Indian territory,” Mr. Jaiswal said. On Tuesday, the Central Board of Indirect Taxes and Customs (CBIC) had issued a notification terminating the transshipment facility for Bangladesh’s trade with Bhutan, Myanmar, and Nepal.

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In June 2020, India had started allowing the transshipment of cargo from Bangladesh through Indian Land Customs Stations, which would then be sent to their final destinations using Indian ports and airports.

The transshipment facility is essential for the export of readymade items from Bangladesh, as these are sent to third countries like Nepal, Bhutan and Myanmar through Indian land ports and airports. The decision to withdraw it, which comes just days before the beginning of New Year festivities in Dhaka, is being perceived as a setback to bilateral trade which has already been reeling from the lack of Indian visas to the Bangladesh business community.

Indo-Bangladesh trade was in the spotlight last week when Prof. Mohammed Yunus, who heads Dhaka’s interim government, described Bangladesh as the “guardian of the ocean” and urged China to extend its trade ties with India’s northeast by using Bangladeshi ports.

“The seven States of India, the eastern part of India, are called the Seven Sisters. They are a landlocked region of India. They have no way to reach out to the ocean. So this opens up a huge possibility. This could be an extension of the Chinese economy,” Prof. Yunus had said during a high-level roundtable discussion on ‘sustainable infrastructure and energy’ at The President Hotel in Beijing last Friday.

Prof. Yunus’ remarks had attracted criticism from several Indian leaders, including Assam Chief Minister Himanta Biswa Sarma. He had objected to the Bangladeshi leader’s description of northeast India as an extension for Chinese producers, terming it “offensive and highly condemnable”.

After his visit to China, during which Dhaka and Beijing agreed to set up a Chinese industrial zone in Chittagong, Prof. Yunus visited Bangkok, where he met with Prime Minister Narendra Modi on the sidelines of the BIMSTEC summit. Sources here refused to confirm that the cancellation of the transshipment facility for Bangladesh was in response to Prof. Yunus’s outreach to China.