India scraps transshipment facility for Bangladesh's export cargo

New Delhi(The Uttam Hindu): India has withdrawn the transshipment facility that allowed Bangladesh to send its export cargoes to third countries via Indian territory. A circular issued by the Central Board of Indirect Taxes and Customs (CBIC) on April 8 announced that the facility granted under a circular dated June 29, 2020, has been rescinded, effective immediately. However, the circular specified that cargo already in India may still be allowed to exit the country as per the previous guidelines.

The 2020 circular had permitted Bangladesh to transship export cargo through Indian Land Customs Stations en route to ports and airports, facilitating trade with countries like Bhutan, Nepal, and Myanmar. Indian apparel exporters had previously urged the government to revoke this facility, citing concerns over Bangladesh's growing textile sector, which benefits from cheap labor. There were also allegations that Bangladesh was misusing the facility to undermine Indian exports. Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), said Indian exporters had complained about reduced space for their shipments at airports due to the transshipment of Bangladeshi cargo.

This move comes at a time when the United States has increased tariffs on many countries, a policy shift that is expected to negatively impact Bangladesh’s economy. The decision also follows controversial remarks by Professor Muhammad Yunus, the Chief Adviser of Bangladesh’s interim government, during his recent visit to China. Yunus had stated that Bangladesh was the "only guardian of the ocean" for Northeast India, a comment that drew a strong reaction from India. This statement was perceived as an attempt by Bangladesh to assert influence over access to India’s Northeast, and it further strained relations between New Delhi and Dhaka. Additionally, the issue of minority persecution in Bangladesh has been a point of contention between the two nations, with India expressing dissatisfaction over Dhaka’s stance on the matter.