Transhipment facility cancelled due to congestion on Indian ports

By Admin

21 Apr, 2025

In a significant move that could reshape regional trade logistics, India has officially cancelled the transhipment facility for exporting Bangladeshi goods to third countries via Indian land ports. The decision, which came into effect on April 8, was announced through a circular issued by the Central Board of Indirect Taxes and Customs (CBIC), effectively rescinding the transhipment provision established on June 29, 2020.

Why the Cancellation?

India’s Ministry of External Affairs spokesperson Randhir Jaiswal confirmed the decision during a press briefing, citing port and airport congestion as the primary reason behind the cancellation. “We have taken that measure because of the congestion that we see on our ports and our airports,” Jaiswal stated.

Interestingly, he alluded to developments on the Bangladeshi side prior to India's decision, suggesting that those may have contributed to the move. However, he did not clarify what those developments were, despite repeated inquiries from journalists.

What About Regional Trade?

While this cancellation directly affects Bangladesh’s ability to route cargo to third countries using Indian land borders, Jaiswal emphasized that the move will not impact Bangladesh’s exports to Nepal and Bhutan. He reassured that India continues to support regional trade integration, saying, “We do have that in mind that regional trade needs to be promoted.”

India-Bangladesh Relations: The Broader Picture

Despite the abrupt change, India has reiterated its commitment to maintaining strong diplomatic ties with Bangladesh. “We look forward to having a positive and constructive relationship with Bangladesh. We stand for a democratic, inclusive, and prosperous Bangladesh,” said Jaiswal. This sentiment, he mentioned, was also echoed during the recent BIMSTEC summit, where Indian Prime Minister met Bangladesh’s Chief Adviser.

Legal Challenges Ahead?

Following the announcement, Supreme Court lawyer Mohammad Azizul Haque served a notice—indicating potential legal scrutiny or a challenge to the sudden policy shift. The broader legal and trade implications are yet to unfold, but this signals growing concern over the cancellation’s impact on Bangladeshi exporters and third-country trade arrangements.

Conclusion

India’s decision to terminate the transhipment facility marks a pivotal moment in regional trade policy. While the official reason remains port congestion, the unexplained “developments” on the Bangladeshi side have sparked curiosity and concern. As trade experts and diplomats closely monitor the situation, it remains to be seen how this will influence long-term trade cooperation and logistical strategies in South Asia.