News / India withdraws access for Bangladesh transhipments, in 'very harmful' decision

Fresh from being hit by US tariffs of 37%, Bangladesh is now contending with the loss of road-air exports via land borders, after India withdrew access to its transhipment facility.

In an announcement yesterday (8 April), India’s Ministry of Finance confirmed that it had rescinded access to transhipment for “export cargo from Bangladesh destined to third countries through land customs stations (LCSs) to [Indian] ports and airports”.

An explanation was not given in the notice seen by The Loadstar, but a report by Reuters suggests it was down to “delays and higher costs” hitting Indian export opportunities.

One forwarder told The Loadstar: “This is not good news for Bangladesh market because a huge volume used to move via India, which was a cost-effective solution for the customer, while the space was critical by air out of Dhaka.

“Still, the airfreight market is very soft just after the holidays, but if the carriers can’t increase capacity, rates will shoot up exponentially in the coming days.”

The forwarder reiterated that while the situation was presently calm on the rates front, it was a “serious decision taken by the Indian government”, adding that it could prove to be “very harmful” to Bangladesh.

There has been increased strain between the two countries, which share a 2,500 mile border, after former prime minister Sheikh Hasina fled to India following mass protests in August.

Recent months have seen increased efforts by Indian garment makers to muscle in on a market that dominates the Bangladeshi economy, with recent port strikes at Chittagong presenting opportunities for India to offer itself as a more stable supplier.