India curbs key Bangladeshi imports via land ports amid trade tensions

India imposes port restrictions on Bangladeshi imports after Dhaka blocks Indian yarn; relations worsen post Sheikh Hasina's exit, raising concerns over regional trade ties

In an escalation of trade tensions between India and Bangladesh, the Indian government has imposed new port restrictions on the import of a range of goods from Bangladesh. The move, widely seen as a retaliatory measure, follows Dhaka's decision to close its land ports to Indian yarn exports.

 

The Directorate General of Foreign Trade on Saturday (May 17) issued a notification detailing the restrictions. The notification specifically restricts the import of goods such as readymade garments, processed food items, carbonated drinks, plastic goods, and wooden furniture.

 

Specifically, all kinds of ready-made garments (RMG) from Bangladesh will be allowed only through the seaports of Nhava Sheva and Kolkata; land ports will no longer be permitted for these imports.

 

 

Other items such as plastics, wooden furniture, processed food, fruit-flavored and carbonated drinks, cotton and cotton yarn waste are also barred from entering India through land ports in the northeastern states of Assam, Meghalaya, Tripura, Mizoram, and border points in West Bengal, including Phulbari and Changrabandha. Goods such as fish, LPG, edible oil, and crushed stone remain exempt from these restrictions.

 

Impact on trade and northeast India

 

Bangladesh is one of the world’s largest exporters of ready-made garments, with exports valued at approximately $38 billion in 2023. Its annual RMG exports to India alone are estimated around $700 million, with about 93 per cent of these shipments traditionally entering via land ports in India’s northeast.

 

India’s northeastern region depends heavily on these land transit points for cross-border trade, with 11 major land transit points spread across Assam, Meghalaya, and Tripura. The new restrictions significantly disrupt this flow, hitting local manufacturers and exporters who rely on Bangladesh as a market.

 

Indian officials highlighted that Bangladesh’s imposition of “unreasonably high” transit charges and rigorous inspections on Indian exports, including rice exports being blocked at key ICPs since mid-April, have worsened trade conditions. This has restricted market access for locally manufactured goods from the northeast, limiting exports largely to primary agricultural produce.

 

Meanwhile, Bangladesh retains free access to India’s northeastern markets, creating an unequal trade relationship that has stifled industrial growth in the region.

 

In response, India’s government aims to bolster the economic self-reliance of its northeast states under the ‘Atmanirbhar Bharat’ initiative by curbing imports through land ports and encouraging local manufacturing.

 

Retaliation against Bangladesh’s yarn export ban

 

The port restrictions come after Bangladesh closed its land ports to Indian yarn exports starting April 13, 2025. Yarn, particularly dyed and special varieties, accounts for nearly 30 per cent of India’s textile exports to Bangladesh. The closure disrupted supply chains for Indian textile mills, prompting exporters to explore alternatives like container shipping and inland waterways.

 

India’s earlier efforts to resolve the dispute diplomatically with Dhaka have seen little progress, leading to this retaliatory trade curtailment.

 

Adding to the strained relations, India ended a nearly five-year-old arrangement that allowed Bangladesh to use Indian airports and ports for trans-shipment of exports to third countries, a move seen as a blow to Bangladesh’s logistics capabilities.

 

Political fallout after Sheikh Hasina’s ouster

 

The imposition of these trade barriers marks a sharp downturn in bilateral ties between India and Bangladesh. The relations between the two neighbours have soured significantly following the ouster of the Sheikh Hasina-led government in Bangladesh — a longstanding ally of New Delhi.

 

Her departure ushered in an interim government led by Muhammad Yunus, which has faced criticism for failing to curb attacks on minorities, particularly Hindus. This political instability and human rights concerns have contributed to the diplomatic chill and increased mistrust between the two countries.