 "Prime Minister Narendra Modi, Bangladesh's Chief Interim Adviser Muhammad Yunus. Image: X")
India is keen to avoid a trade war with Bangladesh, even as Dhaka’s recent moves—such as blocking yarn imports and resuming direct trade with Pakistan—have raised red flags in New Delhi, according to a report by The Times of India.
India suspends trans-shipment facilities
However, Indian officials said that the recent suspension of the trans-shipment facility, granted to Bangladesh in 2020, was only to reduce congestion at Indian ports and airports.
India also clarified that this step won’t affect Bangladesh’s exports to Nepal and Bhutan that pass through Indian territory. Bangladesh has already blocked imports of yarn from India via land borders.
PM Modi’s meet with Yunus
In a recent meeting in Bangkok, Prime Minister Narendra Modi urged Bangladesh’s Chief Adviser Muhammad Yunus to avoid hostile rhetoric. Indian officials believe Dhaka had already begun taking unfriendly trade steps before the trans-shipment facility was halted, Times of India reported.
These include the shutdown of three land ports and tighter customs checks at Benapole. Bangladesh’s knitwear industry has warned that blocking yarn imports could seriously hurt their apparel exports.
Dhaka inches closer to Islamabad
As Bangladesh looks to curb trade with India, its interim government has resumed direct trade with Pakistan. In February, Dhaka agreed to buy 50,000 tonnes of rice from Pakistan through the Trading Corporation of Pakistan (TCP).
This move has raised concerns in India, especially amid growing reports of radicalisation in Bangladesh. Indian officials are uneasy about Bangladesh strengthening ties with Pakistan, which India considers a major source of global terrorism.
Pakistan, in turn, is seeking to expand its exports to Bangladesh. High-level engagements between the two countries have also picked up, with Pakistan’s Foreign Secretary Amna Baloch scheduled to visit Dhaka on Thursday. This is followed by Foreign Minister Ishaq Dar’s visit to Dhaka, which is set to take place next week.