In a development of geopolitical and economic significance, India has formally revoked the transshipment facility that enabled Bangladesh to send its export cargo to third nations via Indian territory. This decision, taking effect from April 8, 2025, has alarmed Dhaka, caused logistics chaos for international apparel brands, and set off a new round of speculation regarding India-Bangladesh relations.
What was the transshipment facility?
India had permitted Bangladesh to utilise its seaports and airports to export commodities, particularly garments, to other nations for years. Much of these exports, especially garments for international brands such as Zara, were air-freighted via Delhi and other major hubs. This system had been instrumental in Bangladesh’s competitive advantage in the global fast-moving apparel market.
India pulls the plug: Why now?
On Tuesday, India’s government published a customs circular affirming that no new cargo coming from Bangladesh will be permitted to be transhipped to third nations. Existing shipments already within Indian territory prior to the deadline will be permitted to continue, though.
The Ministry of External Affairs (MEA) explained that the transshipment rights were being withdrawn because of operational logjams. “The facility had resulted in high congestion in our airports and ports. Our own exporters were suffering delays and cost overruns due to the backlog created by the extra traffic,” MEA spokesperson Randhir Jaiswal explained. He also added that India’s own trade interests must take precedence. “The action will simplify logistics for Indian exporters, lower freight rates, and decrease delivery time,” he added.

Dhaka’s garment industry hard hit
Bangladesh’s multi-billion-dollar garment sector, a major propeller of its economy, has been dealt a serious blow following India’s cancellation of the transshipment facility. The industry, which relied greatly on Indian airports, particularly Delhi, for quicker delivery of garments to international markets, has to seek alternative routes now. Fast fashion brands such as Zara could be hit with delays and increased costs, affecting their sourcing strategy. Experts say the disruption may undermine Bangladesh’s advantage in the competitive international garments market, in which speed and cost efficiency are imperative. The decision is likely to force a strategic change in Dhaka’s export logistics in the face of increased regional and geopolitical uncertainties.
Not a blanket ban: Nepal and Bhutan exports unaffected
India’s move to withdraw the transshipment facility is valid for Bangladeshi exports going to third countries but has no effect on trade with Nepal and Bhutan. MEA spokesperson Randhir Jaiswal made it clear that merchandise transhipping through India to these neighbouring countries will go on as before. He asserted that the shift is purely logistical to decongest Indian ports and airports and should not be interpreted as a break from India’s unflinching support for regional trade. Maintaining the continuity of this route ensures Bangladesh’s regional trade with Nepal and Bhutan is not disturbed and bilateral and sub-regional economic relations are not destabilised.
Domestic lobbying: Indian exporters welcome the move
Indian industry associations, particularly the Apparel Export Promotion Council (AEPC), were glad to see the government making this decision. “This was a long-standing appeal from our industry. Bangladeshi freight was occupying precious space at our ports. With this action, Indian exporters will enjoy cheaper logistics and quicker turnaround,” AEPC Secretary General Mithileshwar Thakur said.
Diplomatic tensions simmering
The decision follows against the backdrop of tense diplomatic interactions between the two neighbours. There was a recent controversy over Bangladeshi Chief Advisor Muhammad Yunus’s comments in China that India’s northeastern states are “landlocked”, which generated a diplomatic furore. According to reports, Prime Minister Narendra Modi reacted forcefully in a closed-door meeting at the Bangkok summit.
In addition, the MEA reaffirmed its concern regarding reported violence against minorities in Bangladesh. “We cannot brush this aside as media propaganda. It is a serious issue that Prime Minister Modi raised during his meeting with Mr Yunus,” Jaiswal stated. Although Yunus had brushed aside most reports as “fake news”, India is adamant on its demand for credible investigations.
Conclusion
India’s move to cancel the transshipment facility is a clear change in its logistical and diplomatic stance. Although New Delhi invokes operational effectiveness and export competitiveness as the principal motivations, the underlying geopolitical dynamics, especially with China, cannot be overlooked. This policy adjustment is a reminder that regional cooperation is frequently beholden to more profound strategic considerations.
For Bangladesh, the test now is to diversify logistics routes without losing its place in international supply chains. For India, the shift is part of a larger push to assert its sovereignty and economic interests, even as it keeps regional friendships intact.