India imposes port restrictions on import of key goods from Bangladesh; check details here

India has imposed port restrictions on the import of key goods from Bangladesh, significantly curtailing overland trade in items such as readymade garments, processed foods, plastic products, and wooden furniture. In a recent notification by the Directorate General of Foreign Trade (DGFT), that came on Saturday evening, the restrictions will come into immediate effect and follows recent trade friction between the two countries.

The commerce ministry has barred the import of all types of readymade garments from Bangladesh through land ports. These imports will now be permitted only through two designated sea routes—Nhava Sheva and Kolkata.

Additionally, goods including fruit-flavoured drinks, carbonated beverages, baked items, snacks, confectionery, cotton and cotton yarn waste, plastic and PVC finished goods (excluding industrial inputs like granules, dyes, and plasticisers), and wooden furniture will not be allowed entry through Land Customs Stations (LCSs) or Integrated Check Posts (ICPs) in the northeastern states of Assam, Meghalaya, Tripura, Mizoram, and specific border points in West Bengal—Changrabandha and Fulbari.

However, essential commodities such as fish, LPG, edible oil, and crushed stone are exempt from the restriction. Goods from Bangladesh destined for Nepal or Bhutan via Indian territory will also remain unaffected.

The DGFT’s move echoes a broader tightening of cross-border trade: earlier this month, the commerce ministry also issued a directive banning all imports and transit of goods originating from Pakistan, citing national security concerns.

These restrictions mark a significant recalibration of India’s trade policy with its eastern neighbour, amid mounting logistical and diplomatic challenges.

Trade tensions between India and Bangladesh escalated sharply in April, driven by a series of diplomatic and economic flashpoints. The strain began after controversial remarks by Muhammad Yunus, head of Bangladesh’s interim government, during a visit to China. Yunus described India’s northeastern states as landlocked and dependent on Bangladesh for sea access and called Bangladesh the “only guardian” of the Indian Ocean in the region.

In the weeks that followed, India revoked its 2020 transshipment order that had allowed Bangladeshi goods to use Indian ports and airports for third-country exports, citing port congestion. In response, Bangladesh imposed restrictions on the import of Indian yarn via land ports, a vital route for Indian textile exporters.

Economic rivalry added to the tensions. Bangladesh, a global garment export leader, shipped $38 billion worth of apparel in 2023, including $700 million to India, 93% of which entered through land ports. Indian apparel manufacturers have long demanded curbs on such imports, arguing that they hurt domestic industry.

The recent trade tensions are set to disrupt supply chains for a number of major global and Indian companies. Global names like Decathlon, Zara, H&M, and Gucci have long used the Dhaka-Delhi corridor to source garments from Bangladesh for international markets. Japanese retailer UNIQLO and Indian giants like Reliance and the Aditya Birla Group also rely on this route for importing cotton apparel. The total turnover of the bilateral trade between the two countries reached $12.9 billion in FY24, according to IBEF.