India has withdrawn the transhipment facility to exports from Bangladesh to other countries through its ports and airports, in response to the increasing friction in ties between the two countries.
The Central Board of Indirect Taxes and Customs (CBIC) withdrew the facility through a circular that scrapped the earlier communication of June 2020 that had extended this facility to Bangladesh.
The earlier circular had allowed transhipment of export cargo from Bangladesh to third countries using Indian Land Customs Stations (LCSs) en route to Indian ports and airports.
Bangladesh uses Delhi airport to send out export cargoes by air to third countries. This facility was accorded to the eastern neighbour in 2023. The immediate impact of the move, however, would be the disruption in Bangladesh’s trade with Bhutan, Nepal, and Myanmar, founder of Global Trade Research Initiative (GTRI) Ajay Srivastava said.
The decision to withdraw the transhipment facility seems to have been driven by Bangladesh’s attempt to revive the British era base at Lalmonirhat near India’s strategic Siliguri corridor with Chinese and Pakistani help. Reports suggest that work on the base could begin by October this year.
The development of an old airbase and Yunus’s comments on his visit to China where he invited his hosts to treat Bangladesh as an extension of the Chinese economy and using it as a maritime conduit to India’s Northeast states, Nepal and Bhutan have made another dent in ties between the two countries.
“The seven states of India, the eastern part of India, are called the Seven Sisters. They are a landlocked region of India. They have no way to reach out to the ocean. We (Bangladesh) are the only guardian of the ocean for this region,” he had said. Bangladesh was also exploring using Indian sea ports for its exports. In July last a 13-member delegation from Bangladesh visited India for six days to assess the possibilities of transhipment of Exim cargo of Bangladesh through Indian ports located on the East Coast. The delegation visited ports in Chennai, Krishnapatnam, Visakhapatnam, Kolkata and Haldia. The visit followed India-Bangladesh Shipping Secretaries Level Talks (SSLT) held in Dhaka in December 2023.
Immediately after the visit, street protests led to the resignation of the then Prime Minister Sheikh Hasina and her fleeing to India on August 5, 2024. After Hasina the government in Bangladesh is being run by Yunus.