In a significant move, India has terminated the transshipment facility that allowed Bangladesh to export cargo through Indian ports to third countries. This decision, announced by the Central Board of Indirect Taxes and Customs (CBIC) on April 8, 2025, follows concerns raised by Bangladesh’s Chief Adviser, Muhammad Yunus, regarding the extension of Chinese economic influence in the strategically crucial Northeast India region. This step may disrupt Bangladesh’s trade with Bhutan, Nepal, and Myanmar, who relied on Indian infrastructure for their exports.
The CBIC rescinded an earlier circular from June 29, 2020, which had permitted the transshipment of Bangladesh’s export cargo via Indian Land Customs Stations. The move had facilitated smoother trade between Bangladesh and its neighboring countries, reducing time and costs. However, following Yunus’ comments during a visit to China in late March, in which he described Bangladesh as the “guardian of the ocean” for the landlocked Northeast India, India appears to have re-evaluated the arrangement. Yunus also suggested that Bangladesh could play a crucial role in connecting China’s economy to the region.
Yunus’ remarks, made during his four-day visit to China, were seen as an attempt by Bangladesh to assert its leverage over Northeast India, a region of vital interest to India. His comment that the region could be an extension of China’s economy raised concerns in New Delhi about China’s growing influence near the Chicken’s Neck, the narrow land corridor connecting Northeast India to the rest of the country.
The termination of the transshipment facility is expected to have significant repercussions for trade logistics between Bangladesh and its neighboring landlocked countries. Nepal and Bhutan, who rely on Indian infrastructure for trade with Bangladesh, may face increased delays and costs. The circular specifies that while existing cargo will be allowed to exit India under the old system, new shipments will no longer benefit from the transshipment route.
Ajay Srivastava, former trade officer and head of the Global Trade Research Initiative, noted that India has long supported Bangladesh’s economic interests, including providing tariff-free access to the Indian market. However, he suggested that Bangladesh’s growing ties with China may have led to this decision, especially with China’s involvement in revamping the airbase at Lalmonirhat near India’s Siliguri Corridor.
