In a significant development that underscores the growing strain in India-Bangladesh relations, New Delhi on Friday imposed fresh trade restrictions targeting key imports from its eastern neighbour. The latest move, announced by the Directorate General of Foreign Trade (DGFT), restricts the import of jute products and woven fabrics from Bangladesh, banning their entry via land routes and limiting access solely through the Nhava Sheva seaport in Maharashtra.
The announcement comes in the wake of controversial statements made by Muhammad Yunus, the head of Bangladesh’s interim government, during his visit to China — remarks that have drawn sharp criticism from Indian political circles and further widened the diplomatic gap between the two nations.
Land Route Ban: A Major Disruption in Cross-Border Trade
The DGFT’s new directive effectively halts the import of various jute-related items through land ports along the India-Bangladesh border, a critical channel for bilateral trade. These items include jute products, flax tow and waste, bast fibres, jute yarns (both single and multiple folded), and different types of woven jute fabrics, including unbleached varieties.
By rerouting these imports exclusively to the Nhava Sheva seaport — located far from the India-Bangladesh border — the Indian government has essentially disrupted the most commonly used and cost-effective trade routes for these goods.
“This regulation shall take effect immediately,” the DGFT said, adding that the restrictions are aimed at regulating trade flows in view of “recent diplomatic developments.”
However, the port restrictions will not apply to Bangladeshi goods being transported through India to landlocked Nepal and Bhutan, thereby maintaining India’s commitments to regional transit trade obligations.
No Backdoor Entry: Re-exports Through Nepal and Bhutan Also Banned
In an attempt to prevent circumvention of the ban, the Indian government has also disallowed the re-export of these restricted items from Bangladesh to India via third countries like Nepal and Bhutan.
“Re-export or transshipment of these items from Bangladesh through Nepal or Bhutan to India shall not be allowed under any circumstance,” the DGFT notification clarified, closing all possible loopholes that traders might explore.
A Pattern of Escalating Trade Barriers
This is not the first time in recent months that India has imposed trade restrictions on Bangladesh. The current ban follows similar moves in April and May, where India targeted Bangladeshi exports of readymade garments and processed food products.
On April 9, India withdrew the transshipment facility it had earlier granted to Dhaka for exporting goods to the Middle East and Europe via Indian ports — a significant economic blow to Bangladeshi exporters relying on Indian logistical infrastructure.
Then on May 17, port-specific restrictions were introduced for certain Bangladeshi goods, further tightening the noose around cross-border commerce.
Political Underpinnings: Yunus’ Remarks in China Spark Outrage
The latest trade curbs are seen as a direct response to comments made by Muhammad Yunus during his diplomatic trip to China. Although the specifics of his remarks have not been officially released, sources suggest they involved perceived criticism of Indian policy in the region and a tilt towards China’s regional strategy.
Yunus’ comments — which reportedly also hinted at deeper cooperation with Pakistan — were not well-received in New Delhi. Several Indian political leaders, including those from opposition parties, voiced their concern over Bangladesh’s shifting foreign policy stance.
Religious Tensions and Minority Safety: Another Trigger
Beyond diplomatic rhetoric, human rights concerns have also entered the equation. Indian officials have raised red flags over increasing attacks on minority communities, particularly Hindus, in Bangladesh under Yunus’ interim leadership. New Delhi has expressed its disappointment over the lack of effective measures to protect minority rights — a sensitive issue that has historically influenced Indo-Bangla relations.
Economic Implications: Trade Volume and Textile Competition
The growing friction could significantly impact bilateral trade, which stood at $12.9 billion in the fiscal year 2023-24. India exported $11.46 billion worth of goods to Bangladesh, while imports were recorded at around $2 billion.
The textile sector, in particular, could feel the heat. Bangladesh is one of India’s biggest regional competitors in this space. The new restrictions may be aimed at protecting India’s domestic jute and textile industries from growing Bangladeshi competition — though the official justification cites national security and diplomatic concerns.
Parliament Takes Note: Strategic Concerns Raised
Friday’s trade restrictions were reportedly discussed in detail during a high-level parliamentary committee meeting, where lawmakers expressed concern over Bangladesh’s increasing proximity to China and Pakistan — two nations currently in strained ties with India.
“The implications of this realignment are far-reaching, not just for trade but for regional security,” said one committee member, under condition of anonymity.
Looking Ahead: Will Tensions Ease or Escalate?
While both nations have enjoyed traditionally strong cultural and economic ties, recent developments mark a turning point. With trade barriers mounting and diplomatic rhetoric hardening, the path ahead looks uncertain.
For now, the DGFT’s latest notification serves as both a trade policy update and a geopolitical signal — India is not willing to tolerate diplomatic slights or perceived regional realignments without consequence.
Whether this prompts a course correction in Dhaka or further retaliatory measures remains to be seen. But one thing is clear — South Asia’s trade and diplomatic landscape is rapidly shifting, and the India-Bangladesh relationship is being tested like never before.
