India restricts Bangladesh garment imports to Kolkata, Mumbai seaports, curbs Northeast land ports

New Delhi: India has issued a new trade directive sharply limiting the entry of Bangladeshi ready-made garments (RMG), a critical export for Bangladesh, to only two Indian seaports: Kolkata and Nhava Sheva in Mumbai. The move closes all land ports previously used for these imports, which are worth over $700 million annually, signalling a significant shift in trade policy.

The shift comes, most likely in response to Bangladeshi actions, as the Yunus government had imposed port restrictions on the export of Indian yarn via land ports, allowing Indian yarn exports only via seaports (from 13th April). Indian exports have been subjected to rigorous inspections on entry, and Indian rice exports are not allowed through Hili and Benapole Integrated Check Posts (ICPs) since 15th April.

The Indian decision will bolster the country’s domestic garment industry but could stifle Bangladesh’s RMG sector, a cornerstone of its economy that accounts for a major part of its total exports. Bangladeshi exporters will now face increased costs and logistical challenges, routing shipments through Chittagong port to India’s designated seaports.

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India-Bangladesh ties have nosedived since the interim Yunus government took charge last year. The Yunus government has largely taken an anti-India stance, reaching out to Islamabad and Beijing. The regime in Dhaka that came after the collapse of the stable Sheikh Hasina government has also been making a number of anti-India remarks as well.

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Further tightening trade, in response to Bangladeshi restrictions, India has imposed restrictions on Bangladeshi exports like plastics, furniture, bakery goods, and juices at land customs stations (LCS) and ICPs in its northeastern states—Assam, Meghalaya, Tripura, and Mizoram. Restrictions also apply to LCS Changrabanda and Fulbari to prevent rerouting by Bangladesh.

An Indian official, speaking anonymously, emphasised reciprocity and said that “Indian market access can’t be taken for granted. Bangladesh cannot dictate terms to solely benefit itself.” The official noted that while Bangladesh enjoyed unrestricted access to India’s Northeast, it imposed high transit fees—1.8 taka per tonne per kilometre—on Indian goods and restricted non-essential northeastern exports.

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These actions will help local Indian manufacturers in northeastern states in developing their own capabilities, but this also means Bangladeshi goods can enter India’s northeastern states only via the Siliguri Corridor, or the Chicken’s Neck.

Before these announcements, India had allowed Bangladesh goods to come to India via all land customs stations and integrated check posts and through seaports without any undue restrictions. The official pointed out, “India is willing to engage in discussions, but it is Bangladesh’s responsibility to create an environment free of rancour.”

This also put an end to Bangladesh’s free access to the entire northeast states, and they saw them as captive markets. The free access also impacted the industrial growth in Northeast states, with businesses impacted by high transit charges by Bangladesh.