The India-Bangladesh transshipment facility, which allowed Bangladesh to export goods to third countries through India’s land customs stations, has recently been a topic of discussion due to some changes in policy.
Key Points:
- Facility Overview: In June 2020, India introduced a transshipment facility that allowed Bangladesh to export goods to countries like Bhutan, Nepal, and Myanmar using Indian land customs stations . This was intended to enhance regional connectivity and trade by using India as a transit corridor .
- Recent Developments: In April 2025, India terminated this transshipment facility . The decision was made by India’s Central Board of Indirect Taxes and Customs .
- Reasons for Termination:
- Congestion: The facility led to congestion at Indian airports and ports .
- Logistical Delays and Costs: Logistical delays and higher costs were hindering India’s own exports .
- Competitive Concerns: Indian exporters, particularly in the textile sector, argued that the facility created competitive disadvantages .
- Geopolitical Context: Some analysts suggest the decision may be influenced by Bangladesh’s increasing engagement with China .
- Impact on Bangladesh: The termination of the facility is expected to:
- Increase costs for Bangladesh’s export sector .
- Increase transit times for goods .
- Disrupt established trade routes .
- Exemptions: The External Affairs Ministry clarified that the changes do not affect Bangladesh’s exports to Nepal and Bhutan that transit through Indian territory .
In summary: India has ended the transshipment facility that allowed Bangladesh to export goods through India to third countries, citing logistical and competitive reasons. This decision is expected to impact Bangladesh’s export sector, although transit to Nepal and Bhutan remains unaffected .
