India withdrew the key transit facility that allowed Bangladesh to move the export cost through Indian territories to third countries, in the middle of increased global business friction after the announcement of US President Donald Trump on 2 April.
The decision issued through the circle no.
This movement will be canceled by circular No. 29/2020-Customs, which enabled the translation of Bangladeshi goods through Indian customs stations (LCSS) into Indian ports and airports.
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For Bangladesh, this decision prevents a system that has helped move its exports to neighboring countries quickly and at low costs for years.
While Cargo will already be terminated in transit on the basis of existing procedures, the facility itself was terminated with immediate effect, the government announcement said.
Ajay Srivastava, co -founder of the Global Trade Research Initiative (Gtri) initiative, said that development was geopolitically significant. “While India has long supported Bangladesh’s business by offering duty -free access to its market, this step sends a message that economic facilitation cannot be divided by concerns about national security,” Srivastava Mint said. “The Bangladeshi decision to invite Chinese assistance in revitalizing the air base near the Indian Siliguri corridor could exceed the red line.”
The base is in Lalmonirhat, near the narrow section of Siliguri also known as the neck of the chicken – the critical gate in the Indian northeastern states. Reports suggest that Bangladesh is exploring strategic cooperation with China in the region, which selects concerns in a new Delhi on a growing Chinese track near a military sensitive zone.
Fallout for Bangladesh
The fall from the canceled device is likely to be felt outside Bangladesh. Bhutan and Nepal, both inland and strongly dependent on Indian territory for access to trade, will now see their logistics chains with Bangladesh.
While India remains a vital transit partner for these countries, the sudden blocking of the corridor that connects them to Bangladeshs could cause diplomatic friction and logistics uncertainty. Myanmar, another key goal for the export of Bangladeshs through India, can also face a delay of the supply chain.
“This could lead to higher costs and delay for Bangladeshi exporters and importers, as well as to brake regional business ambitions,” Srivastava said. “He may even have a discussion as to whether India still meets its WTO obligations for transit for countries.”
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Pursuant to an article in the General Agreement on Tarifts and Trade (GATT) 1994, WTO members are obliged to allow freedom of transit through their territories for goods that go to countries and inland countries, without unnecessary delay and obligations. The WTO (TFA) contract, which India ratified, strengthens these principles and supports smoother customs processes and regional coordination.
Although these rules are generally applied, they are not absolute. In some cases, concerns about national security can be cited, so the country has some freedom. “India will have to clearly communicate its reasons, especially Bhutan and Nepal, and may have to go through the gentle boundary between strategic interests and facilitating trade,” Srivastava said.
New reality?
The timing of this development adds another layer of complexity. Last week, the reciprocal tariff of President Trump pulled out a global business order, with India now facing 26% of the tariff to all exports to the United States. Unlike this background, the Indian decision may be to return its role as a facilitator in South Asian business corridors as part of a greater recalibration of its external business attitude – those that prefer strategic autonomy and geopolitical caution over multilateral business principles, Dattesh Parulekar, assistant of the international relationship.
India has long been promoting connectivity in South Asia, supporting initiatives such as BBIN (Bangladesh-Bhutan-India-Nepal) Transport Agreement and offers one-way duty-free access to almost all Bangladeshi products except alcohol and cigarettes.
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(Tagstotranslate) India Bangladesh trade (T) Bangladeshi transit facilities removed
