India Tightens Screws on Bangladesh, Withdraws Land Transshipment Facility

A few days after reports of Bangladesh planning a strategic base near Chicken’s Neck area with China’s help, New Delhi has rescinded the transshipment facility provided for the neighbouring country’s exports through Indian land customs stations. 

The facility, which allowed Bangladesh to export to other countries through India, has been withdrawn, the Central Board of Indirect Taxes and Customs said in a circular on Tuesday.

The withdrawal of the facility will disrupt Bangladesh’s export and import logistics, particularly with Bhutan, Nepal, and Myanmar, which depend on Indian infrastructure for third-country trade, 

Bangladesh’s plans for Chicken’s Neck area may have prompted this action, according to Ajay Srivastava, founder of Global Trade Research Initiative. Bangladesh had invited Chinese investment to revitalise air base at Lalmunirhat near India's Siliguri Corridor.

The facility had offered Bangladesh a route through India, cutting transit time and cost. The move will hit the access of Nepal and Bhutan, both landlocked nations, to Bangladesh through land route. 

The move may raise concerns regarding India's commitments under the World Trade Organization provisions, which mandates freedom of transit for goods to and from landlocked countries, Srivastava said. According to World Trade Organization rules, members are required to allow freedom of transit for goods moving to and from landlocked countries. 

The relations between India and Bangladesh have soured following the ouster of former prime minister Sheikh Hasina in August last year. Bangladesh has been demanding the extradition of Hasina, who fled to India following the uprising.

India, on its part, has asked Bangladesh to take steps to ensure security of minorities and action against perpetrators of violence against them.