India has decided to terminate the transshipment facility for Bangladesh which allowed Dhaka smooth trade flows for its exports to countries like Bhutan, Nepal, and Myanmar.
In what can be seen as a response to Bangladesh’s Muhammad Yunus’ advocacy for the extension of Chinese influence in India’s northeast region, which is strategically important to the country’s security, New Delhi has terminated transshipment facilities for export cargo from Bangladesh. The facility allowed Bangladesh smooth trade flows for its exports to countries like Bhutan, Nepal, and Myanmar.
In a circular, the Central Board of Indirect Taxes and Customs announced that the access had been revoked with immediate effect, reports claim.
Here’s what the CBIC circular reads
“It has been decided to rescind the circular dated June 29, 2020, as amended, with immediate effect. Cargo already entered into India may be allowed to exit the Indian territory as per the procedure given in that circular,” the Central Board of Indirect Taxes and Customs’ circular, dated April 8, said.
According to trade experts, the latest decision can potentially help several Indian exporting sectors like apparel, footwear, and gems and jewellery.
Earlier, the apparel exporters’ body AEPC urged the government to suspend the order which allowed the transhipment of Bangladesh export cargo to third countries through the Delhi Air Cargo complex.
How will the decision impact Bangladesh?
Notably, India’s announcement has come amidst the US imposing tariffs against several countries, including India and Bangladesh.
Think tank Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said that the withdrawal of this facility is expected to disrupt Bangladesh’s export and import logistics, which depend on Indian infrastructure for third-country trade.
Yunus sparked controversy with his remarks on northeast
Bangladesh Chief Adviser Muhammad Yunus has urged Beijing to extend its economic influence to Bangladesh, controversially mentioning that India’s northeastern states being landlocked could prove to be an opportunity.
The remark, apparently made during Yunus’ recent four-day visit to China, surfaced on social media on Monday.
Yunus, who met President Xi Jinping and signed nine agreements with Beijing during the trip, said, “The seven states of India, the eastern part of India, are called the seven sisters. They are a landlocked region of India. They have no way to reach out to the ocean.”
Calling Bangladesh the “only guardian of the ocean” in the region, he said this could be a huge opportunity and could be an extension of the Chinese economy.
(With inputs from agencies)
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