Citing “severe congestion” at its airports and seaports, India has withdrawn the transshipment facility available to Bangladesh. Using this service, Bangladesh used to export goods to other countries using Indian customs stations.Indian Foreign Ministry spokesperson Randhir Jaiswal said during a media briefing on Wednesday, “The transshipment facility given to Bangladesh has been causing severe congestion at our airports and ports for some time now. Our own exports were being hampered, and a backlog was being created due to delays and high costs in logistics. Therefore, this facility has been withdrawn since April 8. However, we will not allow Bangladesh’s exports to Nepal or Bhutan through Indian territory to be affected.” The facility was introduced in June 2020, and the decision to withdraw it was taken by the Central Board of Indirect Taxes and Customs of the Finance Ministry.A notification issued by the Central Board of Indirect Taxes and Customs (CBIC) on April 8 said, “It has been decided to repeal the revised circular dated June 29, 2020, with immediate effect. Cargo already entered into India may be allowed to exit Indian territory as per the procedure given in that circular.”The facility introduced by India aims to enhance regional connectivity and promote trade between Bangladesh and other countries by using India as a transit corridor. Ajay Srivastava, founder of the Global Trade Research Initiative, said the decision may violate World Trade Organization rules that guarantee freedom of transit to landlocked countries.During his visit to China on March 26-29, Mohammad Yunus, the principal adviser to Bangladesh’s interim government, said, “The seven states of India, the eastern part of India, called the seven sisters, are a landlocked region of India. There is no way to access the sea for that region. We are the sole custodian of the sea for this whole region. So this opens up a huge possibility. It can be an expansion of the Chinese economy.”The statement was widely seen as an attempt by Dhaka to assert its influence over access to northeast India—a matter of concern for Delhi. Yunus’ efforts to project Beijing as a new strategic partner further complicated already fragile India-Bangladesh ties.Yunus’ statement was criticized by several Indian leaders, including Assam Chief Minister Himanta Biswa Sarma. Sarma had objected to Yunus’ description of Northeast India as an extension for Chinese producers, calling it “offensive and quite reprehensible.” He also said that the statement underlined the sensitivity of India’s ‘Chicken Neck’ corridor and it was imperative to build a more robust rail and road network under and around the corridor.Welcoming the decision to suspend the transshipment facility for Bangladesh, Assam Chief Minister Himanta Biswa Sarma posted on Twitter: “India’s decision to suspend the transshipment facility for Bangladesh reflects Prime Minister Narendra Modi’s unwavering commitment to protect national interests and the security of the Northeast region. This decisive action reflects the government’s firm stand to protect India’s strategic and economic priorities.”Talking on this topic, Deepak Mishra, a political analyst, said, “The change comes at a time when the US has imposed a 37 percent reciprocal tariff on Bangladeshi exports and is likely to increase the logistical burden, further putting pressure on Dhaka’s export competitiveness. However, the step has severe implications for India-Bangladesh relations, since they are already under strain since India provided asylum to Sheikh Hasina”.
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