The Bangladeshi Government is dedicated to ensuring seamless export activities in the ready-made garment (RMG) sector despite recent developments concerning India’s transshipment facility. Commerce Adviser SK Bashir Uddin made this assertion on 9th April, after a two-hour meeting with various stakeholders, including officials from the Ministry of Commerce, the Civil Aviation Authority, Bangladesh Biman Airlines, exporters, and representatives from the Bangladesh Freight Forwarders Association (BFFA) and brands.
“We have analysed our capacity and are committed to maintaining stability in our export supply chain,” Uddin stated. The Government is focusing on optimising the capabilities of Dhaka and Sylhet airports to enhance export competitiveness by bolstering domestic capacity.
Previously, Bangladesh utilised Indian airports to export certain goods under the transshipment facility. However, on 8th April, India’s Central Board of Indirect Taxes and Customs announced the cancellation of this facility, stating that the earlier directive allowing Bangladeshi cargo to transit through Indian Land Customs Stations was rescinded with immediate effect. The new regulations permit only cargo already within India to exit the country under previous procedures. Exports to Nepal and Bhutan transiting through India will remain unaffected.
Economists and business leaders in Bangladesh have downplayed the potential impact of India’s decision, suggesting it could economically affect both nations. They noted that India might lose revenue from services related to Bangladeshi exports. Observers pointed out that the decision may relate to Bangladesh’s recent moves to strengthen economic ties with China, particularly in the strategically important Northeast India region.
The Indian Ministry of External Affairs clarified that the transshipment facility had led to significant congestion at Indian airports and ports, causing logistical delays and increased costs for Indian exports.
Industry insiders in Bangladesh highlighted that during crises in sea routes or surges in cargo at Hazrat Shahjalal International Airport, some goods are airfreighted to meet deadlines. Abdullah Hil Rakib, former senior vice president of the BGMEA, emphasised that while India might face revenue losses from cancelled transshipment, Bangladesh could effectively manage the shift by coordinating with local airlines and freight forwarders.
Kabir Ahmed, president of the BFFA, noted that while the initial transition might present challenges, utilising airports in the UAE, Sri Lanka, and the Maldives could mitigate pressures and maintain revenue flow. The anticipated opening of Dhaka airport’s third terminal by the end of this year is expected to significantly enhance cargo handling capacity, with a Japanese company set to manage operations.
Professor Mustafizur Rahman from the Centre for Policy Dialogue remarked that the use of transshipment facilities has been minimal and that any pressures at Dhaka airport could be alleviated by expediting services through the new terminal, thereby minimizing disruptions in exports.
