India restricts Bangladesh jute imports via land borders amid frayed ties

India has tightened restrictions on imports of Bangladeshi jute products and woven fabrics through all land borders, in a move that underscores deepening diplomatic tensions between the neighbours. According to a notification issued by India’s Directorate General of Foreign Trade (DGFT) on Friday, these products will now be permitted entry only via the Nhava Sheva seaport in Maharashtra. “Import from Bangladesh shall not be allowed from any land port on the India-Bangladesh border. However, it is allowed only through the Nhava Sheva Seaport,” the DGFT order said.

The restriction, which took effect immediately, applies to a wide range of jute products including flax tow and waste, bast fibres, single flax and jute yarn, multiple folded woven fabrics, and unbleached jute fabrics. Notably, the DGFT clarified that the ban does not affect Bangladesh’s exports to Nepal or Bhutan transiting through India. However, re-export of these goods from Nepal or Bhutan into India is explicitly barred. This is the latest in a series of trade barriers India has imposed on Bangladesh in recent months, signalling a chilling of what has often been described as a model bilateral relationship in South Asia.

Earlier curbs deepen friction

Friday’s decision follows two recent moves targeting Bangladeshi trade. On April 9, India withdrew a transhipment facility it had granted to Bangladesh for shipping goods to the Middle East, Europe, and other destinations, except for Nepal and Bhutan, as reported by The Hindu BusinessLine.

Again, on May 17, India reportedly imposed port restrictions on the import of Bangladeshi goods such as readymade garments and processed food items. These measures are widely seen as retaliation against controversial remarks made by Muhammad Yunus, head of Bangladesh’s interim government, during a recent speech in China. Yunus reportedly described India’s northeastern states as a “landlocked region with no access to the ocean,” a comment viewed in New Delhi as an attempt to undermine the region’s connectivity initiatives, including access to Bangladesh’s Chittagong Port.

India–Bangladesh trade dependency

Despite the tensions, trade between India and Bangladesh has been expanding. According to India’s Ministry of Commerce data, bilateral trade stood at approximately $14 billion in 2022–23. India exported goods worth over $11.2 billion to Bangladesh while importing around $2.8 billion, making Bangladesh India’s largest trade partner in South Asia but with a significant trade imbalance.

Major Indian exports to Bangladesh reportedly include cotton, vehicles, fuel, cereals, and machinery. Bangladesh’s top exports to India include ready-made garments, jute products, and processed foods. As per Bangladesh Bank figures cited by The Daily Star, Bangladesh relies heavily on India for essential commodities, especially during periods of global supply shocks.

Jute trade and employment stakes

Jute is a critical sector for Bangladesh, employing millions of farmers and factory workers. According to Bangladesh Jute Mills Corporation (BJMC) estimates, over 3 million people in Bangladesh depend directly or indirectly on the jute industry. India has historically been the largest market for Bangladeshi jute goods, though it has frequently resorted to anti-dumping duties and quotas to protect domestic producers.

Friday’s restrictions on land routes will raise costs for Bangladeshi exporters, who now face the longer and more expensive seaborne route to Nhava Sheva port, potentially squeezing profit margins and affecting employment.

The Ganga Waters Treaty in focus

Adding another layer of tension is India is reportedly considering reviewing the 1996 Ganga Waters Treaty as its expiry approaches in 2026.

The treaty, signed by then-Prime Ministers H.D. Deve Gowda and Sheikh Hasina, allocates the dry-season flow of the Ganga at Farakka Barrage between the two countries. It guarantees Bangladesh a share of 35,000 cubic feet per second (cusecs) on average during the critical lean season (January to May), though the actual allocation depends on flow levels.

According to the treaty text (Government of India, Ministry of Jal Shakti), water sharing is divided in 10-day periods, with provisions for arbitration and joint monitoring. For Bangladesh, the Ganga’s lean-season flow is vital for irrigation, drinking water, and navigation in the southwest, where salinity intrusion from the Bay of Bengal is a severe threat.

As quoted by Reuters, Bangladesh has repeatedly expressed concerns that upstream diversions in India have reduced the promised flows, hurting agriculture and drinking water supplies. India, on the other hand, argues that rising demand in West Bengal and Bihar, as well as variable rainfall, complicate full compliance in dry years. Negotiations on renewing the treaty were already expected to be delicate. Recent diplomatic spats risk making them even harder.

Strategic stakes and geopolitical undercurrents

India and Bangladesh have often hailed their ties as a model for South Asia. The two countries share a 4,096-kilometre border, the longest for either nation and have deep security, trade, and cultural links. In recent years, India has invested heavily in cross-border rail and road connectivity, inland waterway transit, and energy trade.

Bangladesh, meanwhile, is also reportedly deepening ties with China, which has become its largest source of foreign credit for infrastructure projects. Beijing’s support for projects like the Padma Bridge Rail Link and various ports has heightened India’s strategic anxieties.

As per Reuters, India sees Bangladesh as vital to its “Neighbourhood First” and “Act East” strategies, serving as a bridge to Southeast Asia and as a counterweight to China’s regional ambitions.

But with growing distrust over trade barriers, provocative diplomatic language, and the looming challenge of renegotiating the Ganga Waters Treaty, relations are entering a tense and unpredictable phase.

(With inputs from the agencies)