Land Port Shutdown: A New Chapter in India-Bangladesh Trade Relations

Context

India has recently shut down all land ports for the import of readymade garments from Bangladesh, a decision that significantly impacts cross-border trade. This move comes in the backdrop of emerging geopolitical tensions, strategic recalibrations, and efforts to assert trade reciprocity. The restriction, while allowing seaborne imports, blocks several crucial land-based trade routes primarily used by northeastern states.

What Is the Decision?

• India has prohibited the import of readymade garments from Bangladesh through all land ports.

• However, the import is still permitted via two seaports:

  • Nhava Sheva (Jawaharlal Nehru Port, Maharashtra)

  • Kolkata Port (West Bengal)

• Affected land ports include those in:

  • Assam

  • Tripura

  • Meghalaya

  • Mizoram

  • West Bengal’s Changrabandha and Fulbari ports

Reasons Behind the Move

1. Reciprocity in Trade

   • Bangladesh had earlier restricted Indian cotton yarn imports.

   • It also delayed transit permissions for Indian rice through its land territory.

   • India’s move is seen as a retaliatory measure ensuring reciprocal market access.

2. Strategic and Security Concerns

   • India is wary of Bangladesh’s increasing strategic alignment with China, including infrastructural and defence ties.

   • New Delhi perceives these ties as potentially undermining India’s influence in the Northeast.

3. Correcting Trade Asymmetry

   • The ban seeks to address the imbalance in bilateral trade and strengthen India’s regional bargaining power.

Key Features of the Ban

• Items affected:

  • Readymade garments

  • Processed food

  • Plastic products

  • Wooden furniture

  • Cotton waste

• Exemptions:

  • Fish

  • Liquefied Petroleum Gas (LPG)

  • Edible oils

  • Crushed stone

These essential and high-demand items continue to be traded via land routes.

Implications

On Bangladesh

• Major setback to textile exports

  • Bangladesh exports nearly $700 million worth of apparel to India annually.

  • Land-based exporters, particularly SMEs near the border, are most affected.

• Disruption in regional trade chains

  • Orders to Nepal and Bhutan may face delays or diversion, affecting the subcontinental supply chain.

• Impact on foreign investment

  • Rising diplomatic friction could affect investor confidence, particularly in Bangladesh’s Export Processing Zones (EPZs).

On India

• Encouraging local entrepreneurship in Northeast

  • The ban can promote indigenous manufacturing and reduce reliance on Bangladeshi goods, aligning with Atmanirbhar Bharat.

• Diplomatic strain with a key neighbour

  • This action may lead to loss of trust and push Bangladesh closer to China, counterproductive to India’s strategic interests.

• Increased logistics cost for importers

  • Rerouting imports via seaports may lead to higher transit times and freight charges, especially for small traders.

Way Forward

1. Restore Bilateral Dialogue

   • Re-engagement through structured platforms like the Joint Consultative Commission (JCC) is vital for de-escalation.

2. Balanced Trade Policies

   • Both countries should review trade policies objectively, addressing imbalances without harming regional growth.

3. Regional Cooperation Mechanisms

   • BIMSTEC and BBIN should be leveraged for harmonising transit, trade, and infrastructure development.

Conclusion

The restriction on land port imports from Bangladesh is a reminder of how geopolitics directly affects economic relations. While India’s decision reflects strategic assertiveness and economic safeguarding, it also carries risks of diplomatic fallout and regional disruption. The long-term solution lies in cooperative dialogue, regional connectivity, and mutual economic integration to sustain peace and prosperity in South Asia.