India Revokes Transshipment Facility for Bangladesh Amid Rising Tensions

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Posted by newadmin on 2025-04-14 09:11:35 |

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In a significant move, India has officially revoked the transshipment facility that allowed Bangladeshi exporters to transport goods through Indian territory to third countries. This decision, which took effect on April 8, 2025, has far-reaching implications for trade logistics, especially for Bangladesh’s exports to Western markets.

The transshipment facility, introduced in June 2020, enabled Bangladeshi goods to transit through Indian Land Customs Stations (LCSs) to reach international ports and airports. The arrangement was initially intended to foster regional connectivity and enhance trade cooperation by providing Bangladeshi exporters access to global markets through India’s logistical infrastructure.

India’s decision to terminate the agreement cites logistical challenges, including congestion at Indian airports and ports. These backlogs have resulted in delays and increased costs, negatively impacting Indian exports. The decision has been framed as a response to these operational inefficiencies, though it comes amid heightened diplomatic tensions between India and Bangladesh.

The revocation is expected to disrupt Bangladesh’s trade, especially for goods destined for European and West Asian markets. With higher transportation costs and delays likely, Bangladesh’s exporters will need to reconsider their logistics strategies and potentially explore alternative trade routes.

The move follows deteriorating bilateral relations, particularly after the controversial ousting of former Prime Minister Sheikh Hasina’s government in August 2024. The new interim government, led by Chief Adviser Muhammad Yunus, has faced criticism from India, especially regarding his comments on Bangladesh’s role as a “guardian of the ocean” for Northeast India and his advocacy for increased Chinese economic influence in the region. These remarks have further strained India-Bangladesh ties and raised concerns about a shift in Bangladesh’s strategic alliances, particularly with China.

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