International Trade Desk – Restrictions imposed by the Indian government on the export of certain Bangladeshi goods via land ports have begun taking a severe toll on bilateral trade.
While the initial fallout was minimal, recent data reveals a steady decline in shipments to the neighboring country. During the first 10 months (July–April) of the current FY2025–26, Bangladesh’s exports to India dropped by approximately 3.5%.
According to exporters, the trade barriers have significantly driven up transportation and operational costs, eroding the competitive edge of Bangladeshi products in the Indian market.
Industry insiders believe the situation can improve if the government initiates high-level diplomatic dialogues with New Delhi to ease these restrictions.
Key Export Sectors Facing a Downturn
Data from the Export Promotion Bureau (EPB) shows that Bangladesh exported goods worth $1.46 billion to India between July and April of the current fiscal year. This is a 3.42% decrease compared to the $1.52 billion recorded during the same period in FY2024–25.
Major sectors such as ready-made garments (RMG), agricultural processed food, raw jute, jute goods, non-leather footwear, and leather products all witnessed a slump. On a positive note, plastic exports saw a marginal increase.
| Export Product | FY2025-26 (July-April) | Previous Year (Same Period) | Growth / Decline |
| Ready-Made Garments (RMG) | $500 Million | $560 Million | 📉 Decreased by ~11% |
| Agricultural Processed Food | $180.8 Million | — | 📉 Decreased by 0.66% |
| Raw Jute & Jute Goods | $110 Million | $150 Million | 📉 Decreased by 24% |
The Origin of the Trade Dispute
The trade friction trace back to April last year when the Bangladesh government banned the import of Indian yarn through land ports. In retaliation, India imposed three successive rounds of restrictions on Bangladeshi exports.
On May 17 and June 27 last year, New Delhi restricted clothing, food products, jute goods, cotton-yarn waste, plastic products, and wooden furniture.
Later, on August 11, additional jute products were added to the restriction list, alongside an anti-dumping duty investigation on Bangladeshi jute imports.
Under the current directives, Bangladeshi jute and garment products are completely barred from entering India through land ports and must be routed exclusively through the Nhava Sheva Port in Mumbai.
Conversely, food items, beverages, wooden furniture, yarn waste, and plastics can only be exported through the Burimari and Banglabandha land ports, completely bypassing standard West Bengal borders.
“The ongoing trade complications between India and Bangladesh are largely political. India introduced these restrictions shortly after Bangladesh stopped yarn imports via land ports. Therefore, there is a clear window to resolve this crisis through mutual discussions, and the issue does not seem overly complex.”
— Mostafa Abid Khan, Former Member, Bangladesh Trade and Tariff Commission
Urgent Calls for Bilateral Talks
Fazlee Shamim Ehsan, Executive President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), emphasized that India is a massive market that Bangladesh cannot afford to lose.
He urged the government to take effective steps, noting that while the previous interim government banned land-port yarn imports, Indian yarn is currently entering Bangladesh via sea routes.
Tapas Pramanik, Chairman of the Bangladesh Jute Spinners Association, mirrored these thoughts, stating that India remains a primary market for jute and that roadblocks must be cleared through state-level interventions.
Dr. Khondaker Golam Moazzem, Research Director of the Centre for Policy Dialogue (CPD), highlighted India’s growing dominance in global trade, pointing out its finalized Free Trade Agreement (FTA) with the European Union and ongoing FTA talks with the United States.
He noted that to capitalize on India’s expanding market in the future, Bangladesh needs proactive diplomacy, suggesting that direct talks at the Prime Minister, Foreign Minister, and Commerce Minister levels could bring a swift resolution.