Bangladesh took several steps that adversely hit land border trade with India even before New Delhi moved to revoke transshipment facilities for Dhaka to export cargo to third countries via Indian land customs stations.
Bangladesh’s interim regime last month decided to close three land ports with India while suspending another citing lack of necessary infrastructure for operations.
The interim regime led by chief adviser Md Yunus also halted yarn imports from India via land ports, which Bangladesh garment exporters have termed as ‘suicidal’. The decision was taken despite vehement opposition by leading business chambers in Bangladesh. Yarn imports via land ports is a win-win activity for Indian exporters and Bangladeshi garment makers, according to Bangladesh affairs experts.
Yarn serves as a critical input in the garment industry-the highest export revenue generator for Dhaka. The regime’s move to suspend yarn trade with India has been seemingly done to enable more imports from Pakistan though not as competitively priced as India’s, people said. The decision also threatens the survival of small and medium scale enterprises in Bangladesh for whom these imports served as critical inputs for garment manufacturing. At a time when both countries are looking to improve logistics by upgrading existing and opening more land ports, such closure of land ports unilaterally is a regressive step, according to experts on the Bangladesh economy.
India on Tuesday revoked a key transshipment facility that permitted Bangladesh to export goods to third countries via Indian land customs stations though trade with Bhutan and Nepal will be exempted.