India had granted Bangladesh transshipment facilities to export goods to other countries using the Kolkata airport. But on April 8, this facility was suddenly suspended. Just a week later, on April 15, the National Board of Revenue (NBR) announced a ban on the import of several Indian goods, including yarn, through land ports. This restriction is now starting to affect India. According to quick estimates by India’s Ministry of Commerce and Industry, Indian exports to Bangladesh dropped by 6.19 percent during the April–June period this year. In June alone, exports to Bangladesh fell by 11.06 percent.
Data from the Department of Commerce under India’s Ministry of Commerce and Industry shows that during the April–June period this year, India exported goods worth over $2.60 billion to Bangladesh. In the same period last year, the figure was over $2.77 billion. That means Indian exports to Bangladesh declined by 6.19 percent in these three months.
In June alone this year, India exported goods worth $875.2 million to Bangladesh. In June last year, the amount was $984.01 million. That means Indian exports to Bangladesh—or Bangladesh’s imports from India—declined by 11.06 percent in June alone.
Abdul Wahed, Joint Secretary General of the India-Bangladesh Chamber of Commerce and Industry (IBCCI), told Bonik Barta, “There’s no denying the tension between the two country’s governments. As a result, both sides have imposed counter-restrictions on imports and exports. Naturally, this has impacted trade. Since transporting goods through land ports saves both time and cost, a large volume of goods used to come from India via land ports. So the restrictions have clearly affected Indian exports and Bangladesh’s imports. Both countries have suffered losses to some extent, but as the smaller country, Bangladesh has been hit harder. Now that businesspeople are gradually getting visas, it’s starting to get a bit easier to deal with the crisis.”
On April 15, the National Board of Revenue (NBR) suspended the import of yarn from India through the Benapole, Bhomra, Sonamasjid, Banglabandha, and Burimari land ports. In addition, a ban was also imposed on several other importable goods from India, Nepal, and Bhutan. The order issued on April 15 replaced a previous one from August 27 last year. According to the new order, restrictions were placed on the import of several items, including yarn, powdered milk, tobacco, newsprint, various types of paper, and paperboard. The Customs Wing of the NBR stated in the order that it would take effect immediately.
According to sources, a large portion of yarn used in Bangladesh’s garment sector comes from India. Most of this yarn enters the country through the Benapole port. Yarn produced in northern and southern India is stored in Kolkata before being exported to Bangladesh. Against this backdrop, the Ministry of Commerce recommended suspending the import of yarn from India through land ports based on demands from the Bangladesh Textile Mills Association (BTMA), a platform of local textile mills. BTMA initially sent a letter to the ministry outlining their demand. The ministry then forwarded it to the NBR, which finalized the decision.
According to statistics from India’s Department of Commerce, Bangladesh imports the highest volume of cotton from India. A large amount of yarn is also imported. Other imports include food grains, mineral and energy products, electricity, and various goods and services.
Bilateral trade and businesses in both countries have come under pressure due to the strain in relations. However, this impact was not reflected in India’s 2024–25 fiscal year, which ended in March. During the April–March period (2024–25), Bangladesh imported goods worth over $11.45 billion from its neighboring country. In the previous fiscal year, the figure was $11.06 billion.
Over the past five decades, trade between Bangladesh and India has steadily grown. After China, India is Bangladesh’s second-largest source of imports. For India, Bangladesh is also one of the top destinations for its exports. In fact, 85 percent of the total trade between the two countries consists of Indian exports to Bangladesh. Because of this strong economic interdependence, the diplomatic tension that began last year did not affect economic ties until March this year. However, foreign policy experts and business leaders had warned that in the long term, the absence of a political government might eventually start to harm economic relations—and that concern is now being reflected in the April–June trade figures.
After the Sheikh Hasina government was ousted in August last year, tensions began to rise between Bangladesh and India. Initially, this was limited to war of words. But on June 27, India banned the import of not just fabric but also jute products from Bangladesh via land ports. According to a notification from India’s Directorate General of Foreign Trade, those items can only be imported through a single seaport.
The notice stated that no goods from Bangladesh would be allowed through land ports. The specified items could only be imported through the Nhava Sheva seaport in Maharashtra. These items include jute products, multi-ply woven fabrics, single jute yarn, and unbleached woven jute fabric.
Earlier, on May 17, India had similarly imposed a ban on the import of readymade garments and processed food products from Bangladesh. These products were only allowed through the Nhava Sheva and Kolkata ports. Besides that, on April 9, India also revoked the transshipment facility it had granted Bangladesh for exporting goods to the Middle East and Europe. The facility now remains available only for exports to Nepal and Bhutan. On April 15, Bangladesh responded by banning the import of several goods from India, including yarn, through land ports.
Though Indian exports to Bangladesh did not decline immediately amid political tensions, they began to drop during the first three months of the current Indian fiscal year.
Dr. Delwar Hossain, Professor of International Relations at Dhaka University, told Bonik Barta, “Even if there are disagreements between the two countries in security or strategic areas, recognizing and emphasizing mutual dependence shows the maturity of a country’s foreign policy or diplomacy. I believe the economic interdependence that has developed between Bangladesh and India means economic ties can’t be damaged overnight. That’s because the rules of economics differ from the rules of politics.” However, he also thinks that if the tensions last long, they will start to impact economic relations as well.
After the Awami League’s fall following the 2024 mass uprising, exports from India to Bangladesh took a downward turn. The internal situation in Bangladesh during July and August also affected bilateral trade. Trade with India via the Benapole port was halted for three consecutive days. As a result, Indian exports to Bangladesh fell by 19.43 percent in August. In September, the decline slowed by 1.66 percent. But in October, exports rose by 2.5 percent. In November, they dropped again by 3.03 percent. However, in December, exports from India to Bangladesh increased significantly, with a growth of 31.51 percent. Exports continued to rise in January by 15.9 percent, but then declined again in February and March.