In a major decision that could impact South Asian trade dynamics, India withdraws transhipment facility that was previously extended to Bangladesh. This move comes shortly after controversial comments made by Bangladesh’s interim leader Muhammad Yunus during a visit to China.
Why This Matters
India’s northeastern region—often called the Seven Sisters—is landlocked, meaning it doesn’t directly touch the ocean. During his China visit, Yunus suggested that this area could be an extension of China’s economy due to its geographic isolation. His remarks raised concerns in India, as they hinted at possible Chinese influence near a strategically sensitive region.
Strong Reactions from Indian Leaders
Indian leaders quickly responded. Assam Chief Minister Himanta Biswa Sarma called Yunus’ remarks dangerous and said such comments cannot be taken lightly. Other top voices, including diplomats and economists, criticized the statement and reminded Bangladesh of India’s military and strategic strength.
India Draws a Red Line
Soon after Yunus met Prime Minister Narendra Modi in Bangkok during a summit, India made its position clear—no rhetoric that could damage the relationship would be tolerated. Days later, India officially announced it was revoking the transshipment facility for Bangladesh and then India withdraws transshipment facility to Bangladesh.
What Was the Transshipment Facility?
Since June 2020, India had allowed Bangladesh to move its export goods—mainly garments—through Indian land, ports, and airports to other countries like Bhutan, Nepal, and Myanmar. This helped Bangladesh save money and time, especially since Indian airports like Delhi and Kolkata offer better cargo services and global connectivity than Bangladesh’s own facilities.
For example, shipping from Kolkata airport to Western countries costs between $2 to $2.50 per kg. From Bangladesh, the same could cost up to $6 per kg. So, this arrangement was a big benefit for Bangladeshi exporters.
Why Did India Cancel It?
India’s Ministry of External Affairs said the decision was made because of heavy congestion at Indian airports and ports due to Bangladeshi cargo. Indian exporters were facing delays and rising costs. However, experts believe the timing of the move was linked to Yunus’ remarks in China, which further strained the already sensitive India-Bangladesh ties.
Impact on Bangladesh’s Economy
This cancellation comes at a difficult time for Bangladesh. After India withdraws transshipment facility, the country’s garment sector—which forms 85% of its $55 billion exports—is already under pressure will have a direct impact. Factories have closed, and thousands have lost jobs. Now, without the India route, exporters must find longer and more expensive ways to ship their goods, such as through Maldives, Dubai, or Pakistan. This increases costs and time, making Bangladeshi products less competitive in the global market.
A Diplomatic Message
This decision is not just about trade—it sends a strong message that India won’t tolerate strategic provocations. It also shows that while India is open to cooperation, its national interests and regional security come first.
Conclusion
Bangladesh must now reconsider its approach and realize that strong relations with India are crucial for its economy and stability. As the saying goes, diplomacy is a two-way street—both sides need to work together for peace and progress.