India has revoked the transshipment facility that allowed Bangladesh to send export cargo to third countries via Indian land routes to ports and airports, especially the Indira Gandhi International Airport in New Delhi. This decision is expected to raise shipping costs for Bangladeshi exporters, particularly in the readymade garment sector, which used India as a more affordable transit route to Western markets.
Indian government cited significant congestion at its airports and higher logistics costs for Indian exporters as the reason for the move. However, the facility for Bangladesh’s trade with Nepal and Bhutan remains unaffected. The decision follows concerns raised by India’s Apparel Export Promotion Council (AEPC), which argued that Bangladeshi cargo was disrupting India’s export logistics and increasing air freight rates.
Bangladesh’s Commerce Ministry is now exploring alternative options, including greater use of domestic airports like Sylhet and Dhaka, to reduce the impact on apparel exporters. Stakeholders in Bangladesh see this move as a setback, especially as it coincides with higher US tariffs on Bangladeshi goods, further squeezing export competitiveness.
Economists and trade experts in Bangladesh have criticized the Indian decision, calling it inconsistent with the spirit of regional cooperation and WTO norms. They argue it harms Bangladesh’s competitiveness and undermines efforts at economic integration, especially in light of recent regional cooperation efforts like the BIMSTEC Summit.
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