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Exports

Bangladesh's Exports to India Face Setback as Land Port Restrictions Take Effect

Strategic Insights

— 1 min read

Bangladesh's exports to India are facing a significant blow due to the land port restrictions imposed by the Directorate General of Foreign Trade (DGFT) of India. The restrictions, which affect several key export items including apparel, processed food, and plastics, have dealt a severe blow to Bangladesh's export performance in the Indian market. Bangladesh's reliance on land ports as a competitive advantage in conducting exports to its neighbouring country has been severely impacted, with the total two-way trade between the two nations standing at US$ 10.57 billion.

Key Takeaways:

  • Bangladesh's exports to India, worth US$ 1.57 billion in FY 2023-24, were conducted through land ports, with a significant 86% of the trade happening through these routes.
  • The DGFT of India has imposed restrictions on several products, including apparel, processed food, and plastics, affecting Bangladesh's key export sectors.
  • Bangladesh's export performance in the Indian market has been uneven, with exports rising from $421.86 million in FY 2020-21 to $715.42 million in FY 2021-22 before slipping to $548.82 million in FY 2023-24.
  • The newly imposed port restrictions threaten to deal a severe blow to Bangladesh's key export sectors, including apparel, processed food, and plastics.
  • Bangladesh's dependence on land ports for its competitive edge is at risk, as exporters may face increased transportation costs if shipments are rerouted through seaports, eroding price competitiveness.
  • The Northeast region of India, with a population base of approximately 52 million, may lose access to Bangladeshi exports, affecting the market share of FMCG products, readymade garments, plastic, and other consumer goods.

Statistics:

  • Total two-way trade between Bangladesh and India: US$ 10.57 billion.
  • Bangladesh's exports to India in FY 2023-24: US$ 1.57 billion.
  • Land ports' share in Bangladesh's exports to India: 86%.
  • Air and sea exports to India: 0.57% and 13.44% respectively.
  • Bangladeshi exports to Northeast India: $84.3 million in FY22 and $91.7 million in FY23.
  • Bangladesh's exports to India by value: $548.83 million in FY 2023-24, with 99% of the trade conducted through land ports.

Sources:

  • Ministry of Commerce, Government of India
  • Directorate General of Foreign Trade (DGFT)
  • Economic Times
  • Daily Star
  • Business Standard

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