In reciprocal move, India places curbs on Bangladesh exports to North-East and abroad

The curbs come a month-and-a-half after Bangladesh interim government chief adviser Muhammad Yunus said in Beijing that North-East India is “landlocked” and Dhaka is the “only guardian of the ocean for all this region” — he made the remark while seeking “extension of the Chinese economy”.

India decided to impose port restrictions on specified Bangladesh exports to India across all land customs stations (LCSs) or integrated check posts (ICPs) in Assam, Meghalaya, Tripura and Mizoram and through Changrabandha and Fulbari in north Bengal.

The products include readymade garments, wooden furniture, plastic and PVC finished goods, fruit-flavoured and carbonated drinks, baked goods, snacks, chips and confectionery items, and cotton yarn among others.

Separately, in the case of readymade garments, port restrictions are expected to apply to Bangladesh exports to India across all land ports, permitting imports only through Kolkata and Nhava Sheva seaports.

This is one of the strongest pushbacks from Delhi against Dhaka since the ouster of the Sheikh Hasina government in August last year.

The rationale for the restrictions in the North-East is that India had earlier permitted export of Bangladesh goods via all LCS and ICP and through seaports without undue curbs.

But Bangladesh continues to impose port restrictions on Indian exports, particularly at LCSs and ICPs bordering North-East states despite the issue being raised at all relevant meetings for a long time now.

Delhi’s assessment is that industrial growth in the North-East suffers a triple jeopardy due to imposition of unreasonably high and economically unviable transit charges by Bangladesh, denying in practice North-East’s access to the rest of India for its manufactured goods and sourcing inputs notwithstanding the bilateral transit agreements.

Due to landport restrictions by Bangladesh, North-East states suffer from lack of access to the Bangladeshi market to sell locally manufactured goods, restricting market access to primary agricultural goods only. Bangladesh, on the other hand, has free access to the entire North-East market, creating an unhealthy dependency and stymying growth of the manufacturing sector in the North-East, according to Delhi’s view.

To support local manufacturing in the North-East, India decided to impose port restrictions across all LCSs/ICPs in Assam, Meghalaya, Tripura and Mizoram on specified Bangladesh exports to India, targeting those commodities that can be locally manufactured.

Port restrictions will also apply to LCS Changrabanda and LCS Fulbari (both are in north Bengal) to avoid re-routing whereby Bangladesh exports can similarly traverse the Siliguri Corridor to reach the North-East, giving Indian states a “level playing field” and an “impetus to competitively manufacture”.

The targeted list of items – from garments to juice, furniture to cotton yarn – will be reviewed periodically to ensure that fair and equitable growth is facilitated in the North-East states in line with the government’s schemes aimed at the purpose.

On the readymade garments port restrictions that are expected to apply to Bangladesh exports to India, Delhi’s rationale is that Bangladesh has recently imposed port restrictions on export of Indian yarn via land ports allowing Indian yarn exports only via seaports. This, Delhi feels, has ostensibly been done in response to demand by Bangladesh textile mills even though the land route offers the quickest and cheapest access of yarn to the readymade garment industry in Bangladesh.

Bangladesh exports over USD 700 million worth of readymade garments annually to India.

According to Delhi, Dhaka cannot cherry-pick terms of bilateral engagement solely to benefit itself or take India’s market access for granted.

Sources said India is willing to engage in discussions but it is Bangladesh’s responsibility to create an environment free of rancour.