India clamps down on Bangladeshi imports through land borders amid trade rift

India has tightened its trade policy with Bangladesh by halting the import of various goods through land borders, escalating an already imbalanced trade relationship. The Commerce Ministry, in a notification dated May 17, announced that a wide range of Bangladeshi items, including fruits, carbonated beverages, processed food, wooden furniture, plastics, dyes, and cotton waste can no longer be imported through land routes connecting the northeastern states. Instead, these goods must now be routed exclusively through the sea ports at Nhava Sheva (Mumbai) and Kolkata.

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Exceptions to this restriction include fish, cooking oil, LPG, and crushed stones, which are still permitted to enter through land checkpoints. However, the overall impact on Bangladesh is expected to be significant. With a trade shortfall of $9.2 billion in favor of India during the 2023-24 financial year, Dhaka now faces increased costs and reduced competitiveness for its exports in the Indian market.

This step follows India’s recent cancellation of a key transshipment facility that had previously enabled Bangladesh to move goods efficiently to countries like Bhutan, Nepal, and Myanmar. In response, Bangladesh had blocked the import of Indian yarn, a major export from India, through several land ports including Benapole and Banglabandha, disrupting textile trade between the two nations.

Amid these mounting tensions, Bangladesh’s Chief Adviser Muhammad Yunus recently proposed forming a unified economic strategy involving Bangladesh, Nepal, Bhutan, and India’s northeastern region. He also reiterated a call for increased Chinese investment in the eastern part of South Asia, potentially signaling a strategic shift in economic alliances.