Bilateral trade between Bangladesh and India declined by 8.32 percent in the Indian fiscal year 2025–26. Total trade between the two countries stood at around $13.49 billion in FY 2024–25, according to statistics from the Department of Commerce, while it fell to nearly $12.36 billion in the 2025–26 fiscal year.

Data from Bangladesh’s land ports also reflect the decline in bilateral trade. According to Benapole Customs House, approximately 1.40 million tonnes of goods were imported through the port in FY 2025–26, while the figure was nearly 1.59 million tonnes in the previous fiscal year, indicating a decline of nearly 197,000 tonnes in one year. Data from the National Board of Revenue (NBR) show that imports of various high-duty products, including fruits, sarees and three-piece garments, also declined.

Revenue collection at Benapole port also indicates a decline in trade with India. In FY 2025–26, the revised revenue target for the Benapole Customs House in Jashore was BDT 112.90 billion, whereas revenue collected at the end of the fiscal year stood at BDT 65.59 billion, resulting in a shortfall of BDT 47.31 billion. In the previous fiscal year, revenue collection was BDT 70.29 billion, reflecting a decline of approximately BDT 4.70 billion in one year.

In FY 2025–26, the Bhomra Land Port in Satkhira recorded a revenue shortfall of more than BDT 9.50 billion. Against a target of BDT 20.64 billion, revenue collection stood at BDT 11.14 billion.

The Hili Land Port in Dinajpur also recorded a record shortfall in revenue collection in FY 2025–26. Against a target of nearly BDT 10.45 billion, revenue collection amounted to BDT 5.97 billion, resulting in a shortfall of roughly BDT 4.48 billion, or 42.89 percent.

Data from the Department of Commerce under India’s Ministry of Commerce and Industry also show that India’s exports to Bangladesh, or Bangladesh’s imports from India, declined along with Bangladesh’s exports to India. The value of goods imported from India to Bangladesh stood at approximately $11.48 billion in FY 2024–25, while it declined to around $10.58 billion in the following fiscal year. During the same period, the value of goods exported from Bangladesh to India fell from nearly $2 billion to $1.78 billion.

The volume of Bangladesh-India trade has gradually expanded over the past five decades. A large portion of the two countries’ total trade consists of Bangladesh’s imports from India. India is Bangladesh’s second-largest source of imports. But following the political change in Bangladesh on August 5, 2024, relations between the two countries experienced disruptions on various issues, including trade, border tensions, increasingly harsh diplomatic rhetoric, restrictions on visa and consular services and push-ins.

Political and diplomatic tensions also affect trade and the economy. In 2025, India cancelled the transhipment facility it had provided to Bangladesh for sending goods to third countries. Following this, Bangladesh stopped importing yarn and some raw materials from India through land ports. India subsequently imposed restrictions on imports of several products from Bangladesh through land ports, including ready-made garments, processed food, plastic products and furniture.

Indian High Commission’s press officer in Dhaka told Bonik Barta, “The recent moderation in bilateral trade between India and Bangladesh needs to be viewed in the context of the broader economic conditions prevailing during the period. While the overall trade figures have recorded a decline, this does not, in our assessment, reflect any weakening of the underlying economic complementarities or the long-term potential of the bilateral trade relationship.”

Among the major products imported by Bangladesh from India, cotton trade has seen a significant decline. In FY 2025–26, Bangladesh imported cotton worth around $2.30 billion from India, down 17.80 percent from the previous fiscal year. Meanwhile, imports of mineral fuels, mineral oils and products of their distillation increased by 5.36 percent to around $2.13 billion.

A significant increase was recorded in food-grain imports, rising by 73.8 percent to $654.96 million. Imports of vehicles and their parts also increased slightly. But imports of nuclear reactors, boilers, machinery and mechanical appliances declined by 5.23 percent to $478.85 million.

In terms of exports from Bangladesh to India, most of the major product categories also recorded declines. Although exports of knitwear fell slightly, exports of woven garments and related products declined by 19.36 percent. Exports in this category amounted to $362.58 million. Exports of other made-up textile articles, used clothing and textile products fell by 5.79 percent to $131.15 million. Exports of footwear and related products declined by 15.94 percent to $99.53 million. But exports of fish, crustaceans, molluscs and other aquatic invertebrates remained almost unchanged.

Statistics from the past several years also show continuous fluctuations in trade between the two countries. In FY 2021–22, total bilateral trade stood at around $18.13 billion, while it declined by 21.49 percent to nearly $14.23 billion in the following fiscal year. In FY 2023–24, total bilateral trade fell by another 9.32 percent to approximately $12.91 billion, but it increased by 4.49 percent to roughly $13.49 billion in FY 2024–25. In the latest fiscal year, however, it declined again by 8.32 percent.

The Indian High Commission in Bangladesh said it remains positive about the medium- and long-term prospects for bilateral trade. Bangladesh and India are geographically contiguous economies with strong connectivity, well-established commercial linkages and considerable complementarities across sectors. As the situation stabilises further and economic activity gathers momentum, we expect domestic demand, industrial production and trade financing conditions to improve. These developments should provide a natural impetus to bilateral trade.

The Indian High Commission has also emphasised that continued efforts to address tariff and non-tariff barriers, improve customs and border procedures, strengthen transport and logistics connectivity, facilitate banking and payment arrangements, and resolve sector-specific trade issues would help create a more predictable environment for businesses on both sides.

Trade analysts say that certain trade-related measures have also contributed to the recent trend. In particular, restrictions affecting the import of yarn from India have had an impact on bilateral trade volumes, given the importance of textiles and related inputs in the trading relationship.

International relations analysts believe that diplomatic tensions between the two countries also have economic consequences. They say businesses in both countries are now turning toward alternative sources and markets. Although the issue remains limited in scale at present, it could grow further if it is not addressed.

Professor Dr Delwar Hossain, former chairman of the Department of International Relations at the University of Dhaka, told Bonik Barta, “The restrictions imposed by both sides on trade have created a deficit of mutual trust, and this has directly affected commercial relations between the two countries.”

According to diplomatic circles, relations between Bangladesh and India are multilayered and complex. Former Ambassador M Humayun Kabir told Bonik Barta, “Despite having tension in the political and diplomatic environment, connectivity still exists in the areas of the economy and people-to-people relations.”

He further said, “Imports from India may also have declined because of lower economic growth and reduced domestic demand in Bangladesh.”

There have recently been indications of discussions aimed at reviving momentum in trade relations between the two countries. On August 24, Indian High Commissioner to Bangladesh Dinesh Trivedi met with Commerce Minister Khandakar Abdul Muktadir at the Secretariat, discussing various issues concerning the expansion of bilateral trade and the removal of business barriers.

After the meeting, the commerce minister said, “Bilateral trade between Bangladesh and India is now worth around $13 billion. But some obstacles have emerged over the past one and a half years, resulting in some slowdown in trade activities. We discussed how to identify these problems and make trade relations between the two countries easier and more effective in the future.”

Speaking to journalists after he met with the commerce minister, the Indian high commissioner said, “Mutual interdependence is a lasting solution. We depend on each other for Bangladesh’s development. This mutual interdependence makes us like one family. We want to take this relationship further.”

He said, “When the economy moves ahead of politics, politics gradually follows behind it.”

A delegation from the Confederation of Indian Industry (CII) recently visited Bangladesh. On August 18, it held a meeting with the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). The Indian business organisation proposed forming B2B task forces on infrastructure investment and financing and on technology to further strengthen investment and trade relations between Bangladesh and India.

FBCCI Administrator Md Fazlul Hoque told Bonik Barta, “Since August 2024, the measures taken by both sides regarding various issues, including land ports, transit facilities and visas, have had an impact. In addition to disrupting normal travel, this has also deepened the lack of trust between the two countries.”

Viewing the CII delegation’s visit positively, he further said, “They came on their own initiative and held meetings with our business community. This is only the beginning of a positive role or initiative toward increasing business and trade between the two countries.”

Removing the existing barriers to commercial relations between the two countries has also received importance in recent discussions. At a reception hosted by the Indian High Commission on the occasion of the CII delegation’s visit, State Minister for Foreign Affairs Shama Obaed Islam recently said, “India is one of Bangladesh’s major trading partners, and bilateral trade has increased significantly over the years. But the trade structure remains somewhat imbalanced and below its true potential.”

She urged the Indian business delegation to share its experiences and perspectives from the visit with the relevant authorities in India, and called for making the business visa process for Bangladeshi businesspeople in India faster or immediate.