India Terminates Trans-Shipment Facilty For Bangladesh as Indian Exporters Raise Concerns

New Delhi: India has withdrawn the trans-shipment facility that enabled Bangladesh to route exports to third countries through Indian land customs stations on the way to ports and airports, while exempting consignments bound for Nepal and Bhutan.

On Tuesday (April 8), the Central Board of Indirect Taxes and Customs issued a circular that the facility given to Bangladesh since June 2020 for the “transshipment of export cargo from Bangladesh destined to third countries through Land Customs Stations … to Ports and Airports” has been rescinded. 

While the withdrawal took effect immediately, the circular clarified that consignments already in Indian territory would be allowed to exit the country as planned.

The circular made no mention of any exemptions. However, a few hours later, the Ministry of External Affairs (MEA) issued a clarification.

At the weekly media briefing on Wednesday, MEA spokesperson Randhir Jaiswal said, “These measures do not impact Bangladesh’s exports to Nepal and Bhutan.”

He said the trans-shipment arrangement had, over time, “resulted in significant congestion at airports and ports.”

“Logistical delays and higher costs were hindering our own exports and creating a backlog. The facility, therefore, has been withdrawn with effect from April 8, 2025,” he added.

Speaking to The Wire, Faisal Mahmud, minister (press) at the Bangladesh high commission in New Delhi, said Dhaka was still assessing the economic impact of the move.

“The interim government is very interested in increasing regional trade and making South Asia a highly connected region. We expect New Delhi to fully cooperate as without India’s cooperation, this is not possible,” he said.

The decision follows lobbying by Indian exporters – particularly in the apparel sector – to revoke the facility, according to a report by news agency PTI. Bangladesh is a major competitor of India's in textiles.

“Now we will have more air capacity for our cargo. In the past, exporters have complained about reduced space due to the trans-shipment facility given to Bangladesh,” said Federation of Indian Export Organisations director general Ajay Sahai.

Sudhir Sekhri, chair of the Apparel Export Promotion Council, said 20-30 truckloads of Bangladeshi cargo arrived daily at Delhi’s air cargo complex, leading to congestion, delays and higher freight costs for Indian exporters – undermining their global competitiveness.

India’s decision comes against the backdrop of strained bilateral ties. Prime Minister Narendra Modi met Bangladesh’s Chief Adviser Muhammad Yunus last week on the sidelines of the BIMSTEC summit in Bangkok – marking their first face-to-face meeting since the ouster of Sheikh Hasina over eight months ago.

During the meeting, Modi reportedly raised concerns over attacks on minorities following the ouster of Hasina's government. Yunus maintained that the incidents had been exaggerated and were politically motivated.

In answer to a query, Jaiswal said the matter had been raised during the meeting, as reflected in the official readout, and conveyed that “these violence and atrocities against the minorities cannot be just wished away or said that they are because of political reasons”.

Originally published at 3:50 pm on April 9, this article was updated at 1:32 am on April 10.

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