India has officially withdrawn the trans-shipment facility that allowed Bangladeshi export cargo to pass through Indian land customs stations (LCSs) en route to Indian ports and airports for third-country trade. The Central Board of Indirect Taxes and Customs (CBIC), through a circular dated April 8, announced the rescission of its earlier directive from June 29, 2020. While cargo already in transit will be allowed to exit under existing procedures, no new shipments will be permitted under this facility.

The move follows repeated requests from Indian exporters, especially in the apparel sector, who complained of increased air freight rates, congestion at cargo terminals, and reduced air cargo space due to Bangladesh’s use of Indian infrastructure. The Apparel Export Promotion Council (AEPC) had flagged issues at Delhi’s air cargo complex, citing delays, inefficiencies, and inflated freight costs as major concerns.

Trade experts believe this decision will benefit Indian exporters in sectors like textiles, footwear, and gems and jewellery, by improving cargo flow and reducing transit time and costs. "This will decongest airports and improve competitiveness of Indian exports," said AEPC Secretary General Mithileshwar Thakur.

However, the move is expected to disrupt Bangladesh’s third-country trade, as its exporters heavily rely on Indian routes. It may also affect landlocked countries like Nepal and Bhutan that use India as a transit corridor to trade with Bangladesh.

Ajay Srivastava of the Global Trade Research Initiative noted that strategic and geopolitical factors may also be at play, particularly Bangladesh’s growing engagement with China near the sensitive Siliguri Corridor.

India-Bangladesh trade reached $12.9 billion in 2023–24. Relations between the two countries have recently been strained, with India voicing concern over rising attacks on minorities under Bangladesh’s interim government.

India has officially withdrawn the trans-shipment facility that allowed Bangladeshi export cargo to pass through Indian land customs stations (LCSs) en route to Indian ports and airports for third-country trade. The Central Board of Indirect Taxes and Customs (CBIC), through a circular dated April 8, announced the rescission of its earlier directive from June 29, 2020. While cargo already in transit will be allowed to exit under existing procedures, no new shipments will be permitted under this facility.

The move follows repeated requests from Indian exporters, especially in the apparel sector, who complained of increased air freight rates, congestion at cargo terminals, and reduced air cargo space due to Bangladesh’s use of Indian infrastructure. The Apparel Export Promotion Council (AEPC) had flagged issues at Delhi’s air cargo complex, citing delays, inefficiencies, and inflated freight costs as major concerns.

Trade experts believe this decision will benefit Indian exporters in sectors like textiles, footwear, and gems and jewellery, by improving cargo flow and reducing transit time and costs. "This will decongest airports and improve competitiveness of Indian exports," said AEPC Secretary General Mithileshwar Thakur.

However, the move is expected to disrupt Bangladesh’s third-country trade, as its exporters heavily rely on Indian routes. It may also affect landlocked countries like Nepal and Bhutan that use India as a transit corridor to trade with Bangladesh.

Ajay Srivastava of the Global Trade Research Initiative noted that strategic and geopolitical factors may also be at play, particularly Bangladesh’s growing engagement with China near the sensitive Siliguri Corridor.

India-Bangladesh trade reached $12.9 billion in 2023–24. Relations between the two countries have recently been strained, with India voicing concern over rising attacks on minorities under Bangladesh’s interim government.