India Ends Bangladesh Transshipment Facility Amid Trade Tensions

India has ended the transshipment facility that allowed Bangladeshi export cargo to use Indian land routes, affecting trade with countries like Bhutan, Nepal, and Myanmar. The move, expected to benefit Indian exporters, could disrupt Bangladesh's logistics and raises concerns over WTO transit rules compliance.

In a significant shift in regional trade dynamics, India has terminated the transshipment facility that permitted Bangladeshi export cargo to traverse Indian land routes en route to third countries. This facility, operational since June 2020, facilitated easier trade access for Bangladesh to nations such as Bhutan, Nepal, and Myanmar.

The decision comes amid growing pressure from Indian exporters, particularly in the apparel sector, who argued that the facility strained air cargo capacity and increased costs at Indian airports. Trade experts suggest this move will bolster Indian exports by alleviating space constraints and reducing air freight costs.

However, the termination has raised concerns about the potential disruption to Bangladesh's logistics. Analysts warn of increased costs and delays for Bangladeshi exporters and anticipate complaints from landlocked nations like Nepal and Bhutan, citing implications on transit access and adherence to World Trade Organization rules on free transit.