India has withdrawn a key trade transit facility for Bangladesh, days after a senior Bangladeshi official suggested that China could play a larger economic role in India’s Northeast.
Transit facility suspended
In a circular dated April 8, India’s Central Board of Indirect Taxes and Customs (CBIC) announced it was cancelling a 2020 order that allowed Bangladesh to use Indian land customs stations to move export cargo to third countries via Indian ports and airports.
The move takes immediate effect, though shipments already in transit will be allowed to continue under existing procedures.
What is a transshipment facility?
A transshipment facility enables a country to move export cargo through a third country’s territory to reach its destination. For Bangladesh, the Indian route was a key link for trade with Nepal, Bhutan and Myanmar.
Yunus remarks spark concern
The decision follows recent comments by Professor Muhammad Yunus, chief adviser to Bangladesh’s interim government, during a visit to China from March 26–29.
Yunus had said, “The seven states of eastern India, known as the seven sisters, are a landlocked region. They have no direct access to the ocean. We are the only guardians of the ocean for this entire region. This opens up a huge opportunity. It could become an extension of the Chinese economy — build things, produce things, market things, bring goods to China and export them to the rest of the world,” he added.
Assam CM takes offence
Assam Chief Minister Himanta Biswa Sarma called Yunus’ comments “offensive” and said they highlighted India’s vulnerability in the narrow Siliguri Corridor — also known as the “Chicken Neck” — which connects mainland India to its Northeast.
He urged the development of alternative routes and improved infrastructure to secure the region’s connectivity.
Yunus called Bangladesh the “only guardian of the ocean” for India’s landlocked Northeast and suggested the region could become an “extension of the Chinese economy.”
The remarks were viewed in India as an effort to position China as a strategic partner in a sensitive region.
Impact on Regional Trade
Trade experts warn the suspension could disrupt Bangladesh’s cargo movement to Bhutan, Nepal and Myanmar. These landlocked countries rely on Indian infrastructure for access to Bangladeshi markets.
Experts noted that India has supported Bangladesh’s exports for decades, offering duty-free access to most goods. He said Bangladesh’s recent invitation to China to invest in the Lalmonirhat airbase near India’s Siliguri Corridor may have triggered the change.
WTO transit rules in question
The move could raise concerns under World Trade Organization (WTO) rules, which guarantee transit rights for landlocked countries. Under Article V of the GATT and Article 11 of the Trade Facilitation Agreement, WTO members must allow freedom of transit and minimise trade restrictions.
PNN & Agencies
