India Revokes Key Transshipment Facility for Bangladesh Amid Diplomatic Tensions

New Delhi | April 9, 2025 — In a significant geopolitical and trade development, India has officially revoked a key transshipment facility previously extended to Bangladesh, marking a shift in bilateral logistics cooperation. The move follows recent remarks made by Muhammad Yunus, Chief Adviser to Bangladesh’s interim government, who described India’s northeastern states as “landlocked” and reliant on Dhaka for ocean access—statements that sparked a sharp diplomatic response from New Delhi.

The decision was formalized through a circular issued by the Central Board of Indirect Taxes and Customs (CBIC) on April 8, rescinding the 2020 circular that had allowed Bangladesh to use Indian Land Customs Stations for export cargo to third countries via Indian ports and airports.

“It has been decided to rescind... the circular dated June 29, 2020, as amended, with immediate effect. Cargo already entered into India may be allowed to exit Indian territory as per the procedure,” the CBIC circular stated.

The now-revoked arrangement had facilitated smoother transit for Bangladeshi exports to countries such as Bhutan, Nepal, and Myanmar. However, Indian exporters—particularly in the apparel sector—had consistently raised concerns over increased logistical congestion and elevated freight costs caused by the influx of Bangladeshi cargo trucks.

Sudhir Sekhri, Chairman of the Apparel Export Promotion Council (AEPC), had earlier flagged the daily arrival of 20–30 Bangladeshi trucks in Delhi as a bottleneck. Echoing this sentiment, Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), noted, “Now we will have more air capacity for our cargo. In the past, exporters complained about reduced space due to the transshipment facility provided to Bangladesh.”

Trade analysts warn that the withdrawal is likely to disrupt Bangladesh’s export supply chains. “The previous mechanism offered a streamlined and cost-effective route through India,” said Ajay Srivastava, founder of the Global Trade Research Initiative. “Its termination may now result in higher logistical costs, increased delays, and greater uncertainty for Bangladeshi exporters.”

The move also unfolds amid rising global trade frictions. The United States recently imposed new tariffs on both India and Bangladesh, intensifying the stakes for both economies.

Diplomatic sensitivities surrounding the issue were amplified by Yunus’ recent speech in Beijing, where he portrayed Bangladesh as “the only guardian of the ocean” for India’s Northeast and invited China to enhance its economic footprint in the region. “The eastern part of India, the Seven Sisters, are a landlocked region. They have no way to reach out to the ocean. This could be an extension of the Chinese economy,” Yunus remarked.

India’s External Affairs Minister S. Jaishankar swiftly rebutted the assertion, underscoring the nation’s robust maritime capabilities. “We have the longest coastline in the Bay of Bengal,” he said, highlighting the North-Eastern region’s emergence as a key connectivity hub within the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).

While the diplomatic ripples continue, trade experts have flagged a potential challenge at the World Trade Organization (WTO). Srivastava noted that the move could raise questions under WTO transit obligations, especially regarding the rights of other landlocked nations such as Nepal and Bhutan that also rely on Indian routes for cross-border trade.

As India recalibrates its logistics diplomacy, the decision underscores a broader reassertion of its strategic autonomy in the face of growing regional competition and shifting alliances.