In a significant shift in its trade policy, India has imposed new restrictions on imports from Bangladesh, limiting the entry of ready-made garments (RMG) to just two seaports—Kolkata and Nhava Sheva—and banning the import of a wide range of consumer goods through 11 land border posts in the northeastern region. This move comes in response to what New Delhi describes as continued trade barriers imposed by Bangladesh, including port restrictions and excessive transit charges on Indian exports.
According to a formal notification from the Directorate General of Foreign Trade (DGFT), Bangladesh’s RMG exports—valued at approximately $700 million annually, with 93% previously routed via land ports—will now only be permitted through the designated seaports. The new rules, effective immediately, also restrict the import of items such as plastic goods, PVC finished products, wooden furniture, carbonated beverages, processed food, cotton waste, and cotton yarn waste through specific land customs stations and integrated check posts (ICPs) in Meghalaya, Assam, Tripura, Mizoram, and West Bengal.
However, the restrictions do not apply to Bangladeshi goods transiting through India to Bhutan and Nepal.
Retaliatory Step Over Unreciprocated Trade Access
Sources familiar with the development said the Indian decision is a response to Bangladesh’s longstanding port restrictions on Indian exports to its territory—particularly from India’s northeastern states—and the sudden halting of Indian yarn exports via land ports from April 13, 2025. Additionally, India’s rice exports through the Hili and Benapole ICPs have been blocked since April 15, 2025.
“Locally manufactured goods from the northeastern states don’t have access to Bangladeshi markets due to these land port restrictions,” an official source said. “Meanwhile, Bangladeshi products have enjoyed unrestricted access to northeastern markets, creating an unfair trade imbalance.”
India has also expressed concerns about the high transit fees imposed by Bangladesh—1.8 taka per tonne per kilometre—deeming it economically unviable for Indian businesses, particularly those using Bangladeshi territory to transport goods from the northeast to other parts of India.
Trade Tensions Amid Political Strains
This policy shift comes against the backdrop of deteriorating bilateral relations since former Bangladeshi Prime Minister Sheikh Hasina was ousted last year. The interim government led by Muhammad Yunus has irked Indian officials with controversial statements, including suggesting that India’s landlocked northeast is economically dependent on Bangladesh and proposing integration with the Chinese economy.
“These decisions are rooted in the principles of equality and reciprocity,” said another government source. “India has offered more than what is expected under these principles, but this generosity has not been matched by the Bangladeshi side.”
Prime Minister Narendra Modi had recently countered Yunus’s remarks by highlighting the strategic importance of India’s northeastern region within the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). External Affairs Minister S. Jaishankar also reiterated that the region could become a vital connectivity hub linking India to Myanmar and Thailand.
Economic Impact
In FY24, bilateral trade between the two nations stood at $12.90 billion, with India exporting $11.06 billion worth of goods to Bangladesh and importing $1.8 billion. While India remains Bangladesh’s second-largest export destination, officials in New Delhi assert that market access cannot be taken for granted and must be fair and mutual.
The government has indicated that the newly targeted list of restricted items could be reviewed periodically to ensure balanced regional development, especially in the northeastern states.
Sources By Agencies
