India Revokes Transit Trade Facility for Bangladesh

On April 9, 2025, Ajay Srivastava, head of the Gujarat Trade and Research Institute (GTRI), announced that India has withdrawn the facility allowing Bangladesh to transit goods through Indian territory to third countries. This facility, in place for the past two decades, permitted Bangladeshi exporters to route their products, primarily garments, via Indian land customs stations to reach markets in Nepal, Bhutan, and Myanmar. The exemption applied to all goods except alcohol and cigarettes.

The decision follows appeals from Indian garment exporters who faced competition from Bangladeshi products benefiting from this transit route. In response, the Central Board of Indirect Taxes and Customs (CBIC) issued a circular on April 9, 2025, revoking the previous order that had permitted such transit. The withdrawal of this facility is expected to significantly affect Bangladesh's export logistics, particularly in the garment sector, as exporters now need to seek alternative, potentially more costly, routes.

This policy change underscores the dynamic nature of trade agreements and their impact on regional commerce. Stakeholders in both countries are advised to stay informed about further developments and adjust their operations accordingly.