India limits 42% of imports from Bangladesh, targeting $770 million in goods: GTRI

India has imposed new restrictions on imports from Bangladesh through land ports, affecting goods worth around USD 770 million. This amounts to nearly 42 per cent of total bilateral imports, according to the Global Trade Research Initiative (GTRI), a trade research group. The Union Ministry of Commerce and Industry issued the restrictions on Saturday following directions from the Directorate General of Foreign Trade (DGFT).The move limits several key Bangladeshi products, including readymade garments, processed foods, and plastic items, to specific sea ports or bans them entirely from entering India via land routes. For example, Bangladeshi garments, valued at USD 618 million annually, can now only be imported through the Kolkata and Nhava Sheva seaports. This cuts off access through previously vital land routes and is expected to hit Bangladesh's garment exports to India hard.Trade retaliation amid diplomatic frictionThe GTRI report says India’s restrictions are not isolated measures. They appear to be a direct response to Bangladesh’s increasing trade barriers against Indian exports and a shift in Dhaka’s diplomatic focus towards China. "The restrictions look like India's response to Dhaka restricting imports from India on a large number of items and diplomatic pivot towards China," the report states.The friction intensified after Bangladesh’s interim chief adviser, Muhammad Yunus, made controversial remarks during a visit to China. Yunus described India’s northeastern states as a "landlocked region with no access to the ocean," a comment viewed by Indian officials as undermining the region’s connectivity, according to ANI reports.Yunus's visit to China in March 2025 resulted in USD 2.1 billion in investments and cooperation agreements, signalling Dhaka’s closer ties with Beijing. The fall of Sheikh Hasina’s pro-India government in mid-2024 and the rise of Yunus’s interim administration have altered Bangladesh’s regional stance, which India perceives as a growing challenge.Bangladesh’s trade restrictions on Indian goodsAs reported by ANI, since late 2024, Bangladesh has introduced a series of restrictions on Indian exports. These include a ban on Indian yarn imports through major land ports since April 2025, stricter curbs on rice shipments, and bans on paper, tobacco, fish, and powdered milk imports. Dhaka also imposed a transit fee of 1.8 taka per tonne per kilometre on Indian goods passing through Bangladesh.According to Indian sources, these cumulative measures, along with operational delays and tighter inspections, have hurt Indian exporters. "Bangladesh cannot cherry-pick the terms of bilateral engagement solely to benefit itself or take India’s market access for granted. India is willing to discuss these issues but it is Bangladesh’s responsibility to create an environment that is free of rancour," an official said.Impact on India’s northeast and local manufacturingThe trade restrictions also have implications for India’s northeastern states. Bangladesh’s transit fees and trade barriers have constrained industrial growth in the region, which relies heavily on access to both Indian and Bangladeshi markets. A government source explained, "Due to Bangladesh’s landport restrictions, the northeastern states suffer from lack of access to the Bangladesh market to sell locally manufactured goods, restricting market access to primary agricultural goods only."The new Indian restrictions aim to protect local manufacturing in the northeast and support the Atmanirbhar Bharat initiative. By limiting Bangladeshi goods that compete with local products, India hopes to level the playing field. The DGFT’s notification bans certain Bangladeshi goods from entering through land customs stations and integrated check posts in Assam, Meghalaya, Tripura, Mizoram, and northern West Bengal.Readymade garments: a key flashpointBangladesh’s garment exports to India total more than USD 700 million annually and are a cornerstone of bilateral trade. The new rules allow these garments to enter only through Kolkata and Nhava Sheva seaports, blocking the more convenient land routes.This is partly in retaliation for Bangladesh’s ban on Indian yarn imports through land ports, essential for its textile industry. Indian yarn exporters have been hit by this move, which reportedly favours Bangladeshi mills’ demands despite land routes offering the fastest and cheapest transit.Officials noted, "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."While India is firm on protecting its domestic industries and the northeast’s economic interests, officials say dialogue remains open. They urge Bangladesh to foster a constructive trade environment.(With inputs from ANI)