In response to India’s abrupt withdrawal of the transshipment facility for Bangladeshi export cargo on April 8, Bangladesh has swiftly activated contingency plans, launching new air cargo operations to mitigate the disruption. The move marks a strategic shift in Bangladesh’s trade logistics, particularly for its critical ready-made garment (RMG) sector, which accounts for 81% of the nation’s total exports.
India’s decision ends a 2020 agreement that allowed Bangladeshi goods to transit through Indian land ports, airports, and customs stations en route to third country destinations. The cessation has disrupted the established supply chain routes, especially the ones passing through Delhi’s Indira Gandhi International Airport — a key hub that handled 18% of Bangladesh’s garment air freight, roughly 600 metric tons per week.
New Delhi cited severe congestion at its logistics hubs and growing diplomatic tensions as reasons for the rollback. Comments by Bangladesh’s interim leader, Muhammad Yunus, on India’s Northeast and his overtures toward China are believed to have strained bilateral ties, adding a geopolitical dimension to the economic decision.
To counteract the fallout, Bangladesh’s Civil Aviation Authority (CAAB) has fast-tracked the development of alternative cargo routes. Osmani International Airport in Sylhet is set to begin cargo flights on April 27, with the inaugural shipment of 60 metric tons of garments bound for Spain. A similar cargo facility is in the pipeline for Chattogram, intended to further distribute load away from the overburdened Hazrat Shahjalal International Airport in Dhaka.
Freight costs have surged in the wake of the ban — air cargo rates from Dhaka to Europe have doubled, reaching $6.30 to $6.50 per kilogram. By decentralizing cargo operations, Bangladesh aims to stabilize these costs and ensure smoother lead times for international buyers.
The long-awaited third terminal at Dhaka Airport, expected to be operational by late 2025, is also seen as a major relief valve for the country’s cargo capacity crunch. In the meantime, trade bodies like the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) are urging more airlines to operate out of Sylhet and Chattogram to offset current limitations.
While the ban does not extend to exports destined for Nepal and Bhutan, it raises broader questions about the region’s trade dynamics. Analysts believe India risks losing significant revenue from transshipment fees, while Bangladesh could emerge more resilient, with a strengthened domestic logistics network and a renewed push toward infrastructure self-sufficiency.
In a geopolitical climate increasingly defined by shifting alliances and trade recalibrations, Bangladesh’s swift logistical pivot may set the tone for a more autonomous and agile export ecosystem in the years to come.
