India Halts Transshipment Facility for Bangladeshi Cargo, Sparking Regional Concerns

India has officially terminated the transshipment facility that allowed Bangladesh to export cargo to third countries via Indian land customs stations en route to ports and airports. This decision, effective immediately, follows a circular issued by the Central Board of Indirect Taxes and Customs (CBIC), rescinding the earlier arrangement established in 2020.  

Key Highlights:  
- The facility had enabled smoother trade flows for Bangladesh’s exports to countries like Bhutan, Nepal, and Myanmar, reducing transit time and costs.  
- Indian exporters, particularly in the apparel sector, had long advocated for the withdrawal of this facility, citing competitive concerns and logistical challenges.  
- The move is expected to lower transportation costs for Indian exporters and decongest airports, but it may disrupt Bangladesh’s trade logistics and impact landlocked neighbors like Nepal and Bhutan.  
- Experts suggest that Bangladesh’s growing ties with China, including plans to establish a strategic base near India’s Siliguri Corridor, may have influenced India’s decision.  
- The withdrawal raises questions about compliance with WTO rules, which mandate unrestricted transit for goods moving to and from landlocked countries.  

This development underscores the complexities of regional trade dynamics and the balancing act between economic interests and geopolitical considerations.  

Sources: The Hindu BusinessLine, Indian Express, CNBC-TV18