Guwahati: The Indian government has terminated the transshipment facility for Bangladesh’s export cargo to third countries using Indian land customs stations en route to ports and airports.
Central Board of Indirect Taxes and Customs (CBIC) announced the decision on Tuesday through a notification.
“It has been decided to rescind… circular… dated June 29, 2020, as amended with immediate effect. Cargo already entered into India may be allowed to exit the Indian territory as per the procedure given in that circular,” the Central Board of Indirect Taxes and Customs’ circular, dated April 8, said.
The Ministry of External Affairs (MEA) announced that it had withdrawn the transshipment facility extended to Bangladesh effective April 8, 2025, due to increasing congestion at Indian airports and ports.
Over time, this facility had led to logistical delays and rising costs, which disrupted India’s own export processes and caused significant backlogs.
“This decision addresses those challenges. However, it does not affect Bangladeshi exports transiting through India to Nepal or Bhutan,” clarified MEA spokesperson Randhir Jaiswal.
Trade experts believe the government’s decision will benefit several Indian export sectors, including apparel, footwear, gems, and jewelry.
Bangladesh, a key competitor in textiles, had previously used India’s transshipment facility, which limited air cargo space for Indian exporters.
“With the withdrawal of this facility, Indian exporters will now enjoy greater air cargo capacity. Earlier, many had raised concerns about reduced space due to Bangladeshi shipments,” said Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO).
The Apparel Export Promotion Council (AEPC) had urged the government to suspend the order that allowed Bangladesh to transship export cargo bound for third countries via Delhi’s air cargo complex.
AEPC Chairman Sudhir Sekhri highlighted the daily arrival of 20–30 loaded trucks from Bangladesh in Delhi, which disrupted cargo flow.
“Airlines exploited the congestion to raise freight charges unfairly. This not only delayed cargo handling but also drove up air freight rates and made Indian apparel exports through Delhi uncompetitive,” he explained.
AEPC Secretary General Mithileshwar Thakur added, “This move will rationalize freight rates, reduce transport costs for Indian exporters, decongest airports, and shorten shipping transit times.”
Ajay Srivastava, founder of the think tank Global Trade Research Initiative (GTRI), pointed out that the decision could severely affect Bangladesh’s trade logistics.
“Bangladesh relies on Indian infrastructure for its third-country trade. The earlier system reduced both costs and transit times. Without it, Bangladeshi exporters will likely face higher expenses, delays, and greater uncertainty,” he noted.
Srivastava also warned that Nepal and Bhutan—both landlocked—might express concerns about restricted transit access to Bangladesh, as the move could disrupt their trade with Dhaka. He further suggested that Bangladesh’s strategic plans to develop infrastructure near the Chicken’s Neck corridor with Chinese support may have influenced India’s decision.
India has long supported Bangladesh by offering duty-free access to its goods (except alcohol and cigarettes) for the past 20 years.
However, recent tensions emerged after Bangladesh’s interim leader, Prof. Mohammed Yunus, called Bangladesh the “guardian of the ocean” and suggested China use Bangladeshi ports to access India’s northeastern states.
He described the region as landlocked and a potential extension of the Chinese economy, sparking backlash from Indian leaders, including Assam Chief Minister Himanta Biswa Sarma, who condemned the comments.
Following Yunus’s visit to China—where Dhaka and Beijing agreed to establish a Chinese industrial zone in Chittagong—he met Indian Prime Minister Narendra Modi in Bangkok during the BIMSTEC summit.
While the Indian government hasn’t officially linked the withdrawal of the transshipment facility to Yunus’s pro-China remarks, the timing has drawn speculation.