In a recent development, India has rescinded the transshipment facility that previously allowed Bangladesh to export goods to third countries through Indian land borders. This facility, established in 2020, enabled Bangladeshi exports to transit via India's land customs stations to seaports and airports. The Indian customs department cited delays and increased costs affecting its own exports as the primary reasons for this withdrawal.

The cessation of this facility is anticipated to disrupt Bangladesh's trade, particularly in the readymade garments sector, and elevate logistical expenses. Exporters express concerns that this move will impede Bangladesh's trade routes to neighboring countries such as Nepal and Bhutan. This decision coincides with the United States imposing a 37% tariff on Bangladeshi exports, further challenging the nation's export competitiveness.

Analysts warn that this measure could strain future bilateral relations and regional economic cooperation. Additionally, there are apprehensions that the withdrawal might contravene World Trade Organization regulations concerning transit freedoms for landlocked countries. The backdrop to this development includes a cooling of relations between India and Bangladesh since Prime Minister Sheikh Hasina sought refuge in India during political unrest in August 2024.