Indian government has cancelled the transshipment facility that allowed Bangladesh to export goods to third countries using Indian ports and borders.

The Central Board of Indirect Taxes and Customs (CBIC) of India issued a circular in this regard on Tuesday (April 8), officially ending the facility that was granted to Bangladesh on June 29, 2020.

According to a report by India Today, the decision will affect Bangladesh’s exports to third countries that used Indian routes.

Trade experts in India believe this move will benefit Indian exporters, especially in sectors like textiles, footwear, gems and jewellery—where Bangladesh is seen as a strong competitor.

For years, Indian exporters have urged the Narendra Modi government to cancel the facility, claiming it gave Bangladesh a competitive edge.

Ajay Srivastava, head of Delhi-based think tank Global Trade Research Initiative (GTRI), said the move may raise questions about India's commitments under the World Trade Organization (WTO) rules, which require member countries to support trade access for landlocked nations.

The decision also follows recent remarks made by Bangladesh’s Chief Adviser Dr Muhammad Yunus during his visit to China. 

He highlighted Bangladesh’s strategic location and called it the “only guardian of the sea” in the region, suggesting that landlocked areas like Nepal, Bhutan, and India’s northeastern states could rely on Bangladesh for trade.

The statement reportedly triggered strong reactions among Indian policymakers, and the cancellation of the facility is seen by many as a direct response.

BDST: 1825 HRS, April 9, 2025
MSK