Dbarta24 Business Desk- A widening trade disparity continues to define commercial relations between Bangladesh and India.
Despite recent diplomatic frictions and retaliatory trade restrictions imposed by both nations, Bangladeshi imports of Indian goods experienced significant growth in the 2025-26 fiscal year.
Conversely, Bangladeshi exports to the Indian market remained stagnant, underscoring Dhaka’s structural dependency on Indian raw materials and essential commodities.
According to latest figures from the National Board of Revenue (NBR), Bangladesh imported goods worth $10.96 billion from India in FY 2025-26, up from $9.62 billion in the previous fiscal year—an increase of $1.34 billion.
In contrast, Bangladesh’s export earnings from India edged down slightly to $1.75 billion from $1.76 billion over the same period. The resulting imbalance means Bangladesh currently exports less than one-sixth of what it imports from its neighbor.
Critical Raw Materials Drive Import Growth
The sustained surge in imports highlights the indispensable role Indian primary goods play in fueling Bangladesh’s industrial production.
India serves as a vital supplier of cotton, yarn, fabrics, agricultural items, and industrial inputs.
Geopolitical proximity and competitive logistics costs make India the most efficient supply origin for Bangladesh’s manufacturing sector, particularly its export-oriented ready-made garment (RMG) industry.
International apparel buyers frequently mandate specific raw materials, making a complete halt to Indian imports economically unviable regardless of diplomatic tensions.
Yarn imports illustrate this ongoing demand. Showkat Aziz Russel, President of the Bangladesh Textile Mills Association (BTMA), noted that Indian yarn imports nearly doubled to 30,000 crore BDT in FY 2025-26, compared to approximately 14,000 crore BDT the preceding year.
Even after Bangladesh restricted land-port yarn imports to protect domestic spinners, shipments redirected to maritime ports without dampening overall volume.
The shift away from land borders reduced informal trade channels, bringing actual demand into clear view while highlighting the balancing act policymakers face between supplying garment exporters with low-cost yarn and safeguarding local textile mills.
Structural Barriers Impede Bangladeshi Exports
While Bangladesh remains India’s primary trade partner in South Asia and its second-largest globally after China, Bangladeshi exporters continue to struggle for market share in India.
Economic analysts point to product concentration, rigorous non-tariff measures, and domestic Indian production capabilities as the core obstacles.
“Bangladesh’s export capabilities to India remain constrained due to three major factors,” said Dr. M. Masrur Reaz, Chairman of Policy Exchange Bangladesh. “First, India possesses robust domestic manufacturing capabilities in sectors like ready-made garments, offering strong local alternatives. Second, Indian regulatory bodies enforce stringent quality standards and testing requirements.
Third, the region has yet to establish integrated supply chains.” Dr. Reaz advocated for a Comprehensive Economic Partnership Agreement (CEPA) between the two nations to eliminate tariff and non-tariff barriers while creating a predictable regulatory environment for investors.
Resilience Amid Mutual Trade Restrictions
Commercial dynamics adjusted following domestic political changes in Bangladesh in 2024. In March 2025, Bangladeshi authorities evaluated measures to protect domestic spinners, leading the NBR to restrict Indian yarn imports through land ports by mid-April.
In response, India withdrew transshipment facilities that previously allowed Bangladeshi export cargo to access third-country markets via Indian land, sea, and air routes. By May and June 2025, India introduced land-port import restrictions on Bangladeshi apparel, processed foods, jute products, and furniture.
Despite these regulatory hurdles, bilateral trade volumes continue to expand. The economic interdependency between the two neighboring economies continues to navigate administrative shifts, demonstrating that fundamental industrial demand routinely supersedes trade restrictions.