India’s new trade curbs on Bangladesh to hit $770 million in imports: GTRI

The impact is also being felt in India’s northeastern states.

India’s decision to restrict imports from Bangladesh via land ports is expected to affect goods worth $770 million, nearly 42 percent of total bilateral imports, according to a report by the Global Trade Research Initiative (GTRI), as cited by ANI.

On Saturday, the Union Ministry of Commerce and Industry imposed immediate restrictions on several categories of Bangladeshi goods, limiting them to specific sea ports or barring their entry through land routes altogether. The move follows a directive from the Directorate General of Foreign Trade (DGFT).

Garments, processed foods, and plastic products are among the key goods impacted. Under the new rules, Bangladeshi garments, valued at $618 million annually, can now only enter India through two designated sea ports. Previously, land routes were the main channels for these exports.

According to the GTRI, this decision will severely hit Bangladesh’s most profitable export route to India. Indian textile manufacturers have long raised concerns over what they call an unfair advantage enjoyed by Bangladeshi exporters. These exporters reportedly benefit from duty-free imports of Chinese fabric and significant government subsidies, allowing them to price their goods 10–15 percent lower in the Indian market.

GTRI also noted that India’s move is not isolated, but likely a reaction to Bangladesh’s recent trade and diplomatic actions.

"The restrictions look like India's response to Dhaka restricting imports from India on a large number of items and diplomatic pivot towards China," GTRI said in its report, as quoted by ANI.

Tensions have risen since the fall of Sheikh Hasina’s pro-India government in mid-2024 and the rise of an interim administration under Chief Adviser Muhammad Yunus. His visit to China in March 2025 led to $2.1 billion in new investments and agreements, signaling Dhaka’s growing alignment with Beijing.

India's decision may also be a response to Yunus’s controversial remarks during a speech in China, where he described India’s northeastern states as a “landlocked region with no access to the ocean.” Indian officials viewed the statement as undermining the region’s connectivity and status, further escalating tensions.

Speaking to ANI, an Indian official said, “Bangladesh cannot assume market access without reciprocity. For years, India extended concessions without equal returns. This decision restores balance.”

Officials told The Economic Times that India’s exporters have also suffered due to Bangladesh’s own trade curbs. Since late 2024, Dhaka has imposed a series of restrictions on Indian exports, ranging from a ban on yarn imports through five major land ports to tighter controls on rice and bans on goods like paper, fish, tobacco, and milk powder. Bangladesh also introduced a transit fee of 1.8 taka per tonne per kilometre on Indian goods passing through its territory.

“These cumulative measures, along with operational delays and tighter inspections, have hurt Indian exporters,” an Indian source told Economic Times. “Bangladesh cannot cherry-pick the terms of bilateral engagement solely to benefit itself or take India’s market access for granted. India is willing to discuss these issues, but it is Bangladesh’s responsibility to create an environment that is free of rancour.”

The impact is also being felt in India’s northeastern states. According to Economic Times, a government source said, “Due to Bangladesh’s land port restrictions, the northeastern states suffer from lack of access to the Bangladesh market to sell locally manufactured goods, restricting market access to primary agricultural goods only.”