Bilateral trade between India and Bangladesh has taken a sharp hit, with non-tariff barriers imposed by both sides raising transaction costs by nearly 20 per cent, according to Bangladesh’s Ministry of Commerce.
With cargo movement through land ports declining steeply, traders are increasingly forced to reroute industrial imports and exports via Chittagong Port, a shift that has made trade slower and more expensive.
Commerce Secretary Mahbubur Rahman said Dhaka has sought dialogue on several occasions—sending three formal letters at the secretary level and a direct appeal from the Commerce Adviser to India’s Commerce Minister—but New Delhi has yet to respond.
“India isn’t even explaining why it’s avoiding dialogue,” Rahman noted.
The rift began in April when India halted transshipment facilities for Bangladeshi goods destined for third countries. Dhaka retaliated by suspending yarn imports through 11 land ports, prompting New Delhi in May to curb Bangladeshi exports of ready-made garments, processed food, and furniture.
As a result, truck traffic at key land ports has dropped from 400 daily crossings to just 150, while imports through some routes have fallen by more than 50 per cent.
Despite the tensions, India remains Bangladesh’s second-largest trading partner, with bilateral trade exceeding $15 billion annually. Officials and industry leaders warn that the dispute underscores the urgent need for de-escalation to safeguard supply chains and protect regional economic ties.