Land route restrictions threaten Bangladesh’s exports to India

The easiest route for exporting Bangladeshi products to India is by land as it allows for quicker delivery and lower transportation costs. As a result, 76 per cent of Bangladesh’s garment exports to India are transported via land routes. However, last Saturday, India imposed a ban on importing garments from Bangladesh through land ports, effectively closing this crucial trade channel.

While India has kept two maritime routes open for garment imports— Nhava Sheva port in Mumbai (western India) and Kolkata port in West Bengal (eastern India)—there are complications. No direct container vessels run from Chattogram to Nhava Sheva; goods must detour via a Sri Lankan port. Although two small container vessels operate between Chattogram and Kolkata, their service is often irregular.

In addition to garments, India has also imposed restrictions on land-route exports of processed foods, plastics, wooden furniture, yarn and yarn waste, fruits and fruit-flavoured beverages, and soft drinks. These restrictions apply to all land ports used to export goods from Bangladesh to the Indian states of Assam, Meghalaya, Tripura, and Mizoram. Customs stations at Chengrabandha and Fulbari in West Bengal have also been under the purview of the ban. Only the land ports at Benapole, Sonamasjid, and Bhomra remain unaffected, though they primarily serve exports to West Bengal—a market relatively small for Bangladeshi products.

Exporters fear that the time and cost required to reroute goods will make it difficult to maintain competitiveness in the Indian market. This is the second instance in less than a month that India has imposed non-tariff barriers on Bangladeshi exports. Earlier, on 9 April, India withdrew the facility of using Kolkata airport to export Bangladeshi goods to other countries. Meanwhile, on 15 April, Bangladesh’s National Board of Revenue (NBR) banned the import of yarn from India via land routes.

Data from the Export Promotion Bureau (EPB) indicates that in the fiscal year 2023–24, Bangladesh exported goods worth around USD 1.57 billion to India. According to NBR, the figure is slightly higher at USD 1.59 billion. Of this, around USD 500 million worth of goods—about 31 per cent of total exports to India—are now affected by the restrictions.

India accounts for 3.75 per cent of Bangladesh’s total exports, which stand at approximately USD 4.5 billion. India is Bangladesh’s 9th largest export destination. On the other hand, Bangladesh imports around USD 9 billion worth of goods from India—over 14 per cent of its total imports. Bangladesh mainly imports raw materials for industries from India. According to India's Ministry of Commerce, Bangladesh ranks 8th among India’s top 10 export destinations.

According to EPB data for FY 2023–24, among the goods exported to India, ready-made garments account for USD 550 million. In the last fiscal, processed agricultural products earned USD 160 million, plastic products USD 44 million, cotton and cotton yarn waste USD 31.3 million, and furniture USD 6.5 million.

NBR data offer slightly different perspective, as it includes specific port-wise export details. The NBR data shows that Bangladesh exported USD 555.7 million worth of garments to India in the same fiscal year, of which USD 422.9 million (76 per cent) were transported via land routes. Last year, 530 companies exported garments via land ports. Apart from Indian local firms, international brands like Marks & Spencer and Levi’s imported garments from Bangladesh for the Indian market.

One major exporter using land routes is AKH Fashion Limited of the AKH Group, which exported garments worth USD 12.2 million via land ports in the last fiscal year.

Speaking to Prothom Alo, AKH group’s Deputy Managing Director Mohammad Abul Kashem said, “Previously, exports via land would take just one or two days. Now, maritime export will take up to 21 days because goods must first be shipped from Chattogram to Colombo (Sri Lanka), and from there to Nhava Sheva.”

He warned that such delays could damage export.

Beyond garments, exports of processed food, plastic goods, furniture, yarn waste, and fruit drinks through now-restricted land ports amounted to USD 76.6 million last fiscal year, involving 166 exporters. These companies mainly serve five of India’s seven northern states, where Bangladeshi goods had gained market traction. Exporters see the rerouting as a major obstacle to retaining these markets.

PRAN-RFL Group is one of the major exporters in this category. It has established a strong market presence in India’s northern states over many years. In the last fiscal year, the group exported USD 50 million worth of goods to India, with 68 per cent—or USD 33.8 million—shipped via newly restricted land routes. On Sunday, following the ban, 17 PRAN truck shipments were halted at the Burimari-Chengrabandha land port.

Asked, PRAN-RFL Group Chairman and CEO Ahsan Khan Chowdhury told Prothom Alo, “We had built a strong market in these Indian states, which will be very difficult to retain now. We don’t want either Indian or Bangladeshi businesses to suffer. A constructive dialogue between the two governments is essential to resolve the issue.”

Furniture manufacturer Hatil, which has showrooms in India, exported USD 650,000 worth of wooden furniture to India via Benapole and Burimari land routes last fiscal year. Of these, 87 per cent were exported through Burimari, which is now under restriction.

Hatil Chairman Selim H Rahman told Prothom Alo that the restrictions would hamper their furniture exports, especially since transporting goods through Benapole will be more expensive. He also mentioned that from August, India’s Ministry of Commerce and Industry will make it mandatory for furniture exports to be certified by the Bureau of Indian Standards (BIS). He warned that continued imposition of such non-tariff barriers will severely challenge future exports.

Land routes are the most convenient for trade with India. As a result, 81 per cent of Bangladesh’s total exports to India in the last fiscal year were conducted via land ports.

Mustafa Abid Khan, a former member of the Bangladesh Trade and Tariff Commission (BTTC) and a trade analyst, told Prothom Alo, “The seven Indian states known as the ‘Seven Sisters’ do not have any seaports. Due to India’s restrictions, Bangladesh’s exports to those states will effectively come to a halt. That’s because it is difficult for Bangladesh to export to those regions via sea and then road.”

Indian northeastern states of Arunachal, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura are known the ‘Seven Sisters’ are landlocked. Transporting goods from India’s mainland to these states requires a complicated and lengthy route. However, because of their geographical proximity to Bangladesh’s northeastern border, sending goods from Bangladesh to those states has historically been simple and cost-effective.

Due to the Indian restrictions, if the exports must now go through the Nhava Sheva Port, goods will first need to be shipped from Chattogram to Colombo Port in Sri Lanka. From there, a second ship must carry them to Nhava Sheva. Exporters say that congestion at Colombo Port is causing more than double the normal shipping time on this route, which could discourage Indian buyers from sourcing products from Bangladesh due to higher costs.

Asked, Azmir Hossain Chowdhury, Head of Operations and Logistics at Swiss-based shipping company Mediterranean Shipping Company, told Prothom Alo, “Normally, it should take one week to transport a container from Chattogram to Nhava Sheva via Colombo. But due to congestion at Colombo, it’s now taking two to three weeks.”

Apart from Nhava Sheva, exports through Kolkata Port are still allowed. However, only two very small container ships operate on the Chattogram–Kolkata route, and one of them runs irregularly. Jahangir Hossain, Managing Director of Alvi Line Limited, the local agent of the vessel MV Shamayel, also confirmed that the ship operates irregularly.

M Masrur Reaz, Chairman of the policy research organisation Policy Exchange, told Prothom Alo, “Tariff and non-tariff barriers in India-Bangladesh trade are harmful to both countries. The import restrictions India has imposed on goods from Bangladesh will hurt not only Bangladesh but also Indian importers and consumers of Bangladeshi products. India is an important market for Bangladesh in terms of export diversification.”

He added, “Both countries should prioritise their national interests and maintain trade while expanding opportunities for bilateral and regional trade. We hope the Indian authorities will reconsider the matter. These two countries are neighbors, and that can’t be changed.”

Reaz also said that India’s sudden decision highlights the ineffectiveness of regional cooperation platforms like SAFTA and others in South Asia. If these platforms were functional, it would be easier to resolve trade-related challenges in such situations.