(Sanghnomics is a weekly column that tracks down and demystifies the economic world view of Rashtriya Swayamsevak Sangh (RSS) and organisations inspired by its ideology.)
Around 10 days after Bangladesh’s Chief Adviser Mohammad Yunus’ visit to China from 26 to 29 March — a visit marked provocative anti-India statements by him, India announced to cancel the transshipment facility for Bangladesh. This would have a serious impact for Bangladesh’s economy which is already on the verge of collapse because of the Yunus regime’s policies.
Officially, the spokesperson of India’s Ministry of External said on April 9 in a press briefing, this facility has been withdrawn because, “We are facing congestion on our side, and we have to create more space for our own exports.”
According to the trade experts this move will benefit Indian sectors such as apparel, footwear, and gems and jewellery. These are the industries where Bangladesh has been a strong competitor.
It may be recalled that several public intellectuals and organisations like Rashtriya Swayamsevak Sangh (RSS) in India have been repeatedly expressing concerns over the current state of affairs in Bangladesh ever since Yunus took over the reins of the interim government after ouster of Sheikh Hasina government in August last year.
The RSS, that has been consistently monitoring the developments in Bangladesh after communal violence was unleashed and patronised by Yunus regime, had passed a detailed resolution in March this year where it expressed “its serious concern on the unabated and planned violence, injustice and oppression faced by the Hindu and other minority communities at the hands of radical Islamist elements in Bangladesh.”
The resolution further said, “The governmental and institutional support for the violence and hatred witnessed (in Bangladesh) during last year is a serious cause of concern. Along with this, the persistent anti Bharat rhetoric in Bangladesh can severely damage the relationship between the two countries.”
And this is what has happened. The stubbornness of Mohammad Yunus to promote radical Islamists and join hands with Pakistan and China while targeting India has led to an unprecedented deterioration in India-Bangladesh ties including the economic relations.
According to a research paper by Observer Research foundation(ORF) the latest developments have not only serious implications for Bangladesh’s economy but also for regional trade.
“The termination of this (transhipment) facility will have wide-ranging ramifications for Bangladesh in the long-term scenario. Bangladesh’s Readymade garment manufacturing industry is already reeling under the shocks of the Red Sea supply chain crisis and the Ukraine war, (due to which shipments to Europe and North America have to be rerouted through the Cape of Good Hope instead of the shorter Suez canal route) alongside the disruptions faced due to the regime change in Bangladesh and the US reciprocal tariffs (currently stalled),” says the ORF analysis.
The extent of damage to Bangladesh can be gauged from the fact that in FY 2023-24, around 4000 trucks carrying export cargo entered India from Bangladesh through the Petrapole land port. FY 2024025 saw a sharp increase of around 40 per cent in this traffic carrying consignments worth Rs 3500 crore. These were primarily readymade garments manufactured in Bangladesh and meant to be exported to Europe through Indian ports and airports. The withdrawal of transshipment facilities has brought these daily consignments to a halt.
Regional impact
According to the ORF research paper, “Reduced connectivity between India and Bangladesh also derails the progress of the Bangladesh-Bhutan-India-Nepal (BBIN) Corridor, which had been gathering steam since 2021. The fraught relationship between India and Bangladesh does not bode well for South Asia. South Asia remains the least economically integrated region globally, with intra-regional trade accounting for just 5 percent of total trade—far behind ASEAN (25 percent), North America (40–50 percent), and the EU (60–65 percent). The situation underscores the region’s vulnerability and the urgent need for resilient, mutually beneficial trade frameworks capable of withstanding political and economic disruptions.
Additionally, limited connectivity paradigms between India and Bangladesh can also potentially derail the ambitious economic, energy and transport connectivity plans of the Bay of Bengal Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), under the BIMSTEC Master Plan for Connectivity announced during the 6th Summit Meeting in Bangkok. Under this plan, the BIMSTEC countries plan to invest US$ 124 billion for over 250 projects in the Southern Asia region.”
Way Forward: India’s shared legacy
The RSS resolution needs to be recalled in this context as India is traversing through a complex matrix of choices in dealing with Bangladesh given India’s economic and strategic interests. And what Yunus is doing seems to be a deliberate attempt to hurt India’s shared legacy in this region.
The RSS resolution rightly pointed out, “There is a concerted effort on the part of some international forces to foment instability in the entire region surrounding Bharat by creating an atmosphere of distrust and confrontation pitting one country against another.”
The RSS has called upon thought leaders and scholars in international relations to keep vigil on such anti Bharat atmosphere. It also emphasised the entire region has a shared culture, history and social bonds because of which any upheaval at one place raises concern throughout the region. The RSS has urged all vigilant to make efforts towards strengthening this shared legacy of Bharat and neighbouring countries.
Earlier Sanghnomics columns can be read here.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
